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Issues:
Recovery of loan with interest and costs, distribution of sale proceeds among creditors, interpretation of section 451 of the Companies Act, entitlement of the Central Government to fees, application of rule 291(4) of the Companies (Court) Rules, 1959. Analysis: The judgment pertains to a case where the applicant had advanced a loan to respondent No. 1, with other respondents acting as guarantors and mortgaging their properties. The loan was not repaid, leading to a suit for recovery. A preliminary decree was passed in favor of the applicant for the recovery of a specific amount with costs and interest. Subsequently, the Haryana Financial Corporation also sought recovery from respondent No. 1, resulting in the auction of the mortgaged property. The sale proceeds were to be distributed between the creditors, with the Haryana Financial Corporation and the applicant-bank being the main beneficiaries. The official liquidator opposed the applicant's request for its share of the sale proceeds, citing section 451 of the Companies Act and rule 291(4) of the Companies (Court) Rules, 1959. Upon examination, the court found no merit in the official liquidator's opposition. Section 451 of the Companies Act mandates that the Central Government receives a prescribed fee when the official liquidator acts as a liquidator, with rule 291 detailing the applicable fees. However, in this case, the official liquidator did not actively participate in the realization of the property for the secured creditors. As the auction and related expenses were managed by the court and the District Judge, the official liquidator did not contribute to the process. Consequently, the court ruled that the official liquidator could not benefit from the provisions of section 451 and rule 291. In conclusion, the court accepted the applicant's application and directed that the amount of the sale proceeds held by the court be paid to the applicant. The judgment clarifies the application of relevant provisions of the Companies Act and associated rules in the context of property realization and distribution of sale proceeds among creditors.
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