Milap Chandra Jain, J. - (1.) Madhu Chemicals Centre, Bikaner, has filed this company petition under section 433(e) read with section 439, Companies Act, 1956 (hereinafter to be called the Act) for the winding up of the Standard Woollens Ltd., Jodhpur (hereinafter called the respondent company). After observing necessary formalities, the petition for winding up was allowed and the respondent company was ordered to be wound-up. On 28 October, 1985, it was further ordered that the official liquidator shall proceed to take action in respect of the properties whose possession has not been taken over by the Rajasthan Financial Corporation (in short RFC) under section 29, State Financial Corporation Act, 1951 (hereinafter to be called the Act of 1951). On 20 December, 1987, the secured creditors, namely, Rajasthan State Industrial Development and Investments Corporation, Industrial Finance Corporation of India and State Bank of Bikaner and Jaipur also intimated for remaining outside liquidation vide their application dated 29 August, 1985.
(2.) On 25 February, 1986, the official liquidator moved application, paper No. A8/1-7, for restraining the RFC from disposing of the properties of the respondent company and to allow him to do so as secured creditors cannot remain outside liquidation. On 7 April, 1986, RFC was directed not to auction the properties. RFC filed its reply, paper No. A9/1-10, on 14 May, 1986. By order dated 22 May, 1986, the RFC was permitted to auction the properties of the respondent company. It was ordered on 9 January, 1987, that RFC may auction the properties after wide publicity, but the bid will not be accepted without the approval of the court. On 16 January, 1987, the official liquidator moved application, paper No. A23/1-5, for deciding the following questions : "(a) whether the secured creditors of the company in liquidation, ordered to be wound up by the court, can be allowed to remain outside liquidation proceedings. (b) whether the secured creditor of the company in liquidation is also bound to prove its rank and extent of claim before the official liquidator in accordance with sections 528 to 537, Chapter V Part VII of the Companies Act, 1956. (c) whether the provisions of State Financial Corporation Act, 1951, particularly, section 29 read with section 46B of the said Act which empower the Financial Corporation to take over the possession of the securities or assets in its charge and to dispose them of in order to satisfy its claim against the company are in conflict with the various provisions of the Companies Act, 1956, regarding the winding up by the Court. (d) whether the provisions of the State Financial Corporation Act, 1951, if the answer of question (c) above is in affirmative, can override the provisions of the Companies Act, 1956, regarding winding up of a company. (e) whether it will be otherwise prejudicial to the interest of the workmen and other creditors of the company in liquidation, if the secured creditors are allowed to remain outside liquidation and dispose of securities or properties of the company held by them and satisfy their claims and dues."
(3.) Arguments of the learned counsel for the parties have been heard on these questions. Question No. (a);