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Issues:
1. Whether Dr. Tug has a charge over the flour mill due to an agreement with the Annapurna Company. 2. Whether Dr. Tug is entitled to preferential treatment as a creditor. 3. Whether Dr. Tug can claim a preference over the sum of Rs. 6,500 utilized by the Company. Analysis: 1. The liquidators sought the court's direction to sell a flour mill owned by the Company in liquidation. Dr. Tug objected, claiming that an agreement with the Annapurna Company gave him a charge over the mill. However, the court noted that the agreement did not specify that the money deposited by Dr. Tug was to be kept aside in trust, and thus, he did not have a charge over the property as claimed. 2. Dr. Tug argued for preferential treatment as a creditor based on the agreement. The court held that Dr. Tug was not entitled to preferential treatment under Section 230 of the Indian Companies Act. Therefore, he was considered on equal footing with other creditors, and his claim for preferential status was dismissed. 3. Regarding the Rs. 6,500 utilized by the Company, Dr. Tug contended that he should have a preference over this amount. The court ruled against this claim, stating that Dr. Tug could not be considered to have stepped into the position of the Union Bank, to whom the amount was paid, especially since the collateral (grain) for the mortgage had already been disposed of. Consequently, the court dismissed Dr. Tug's application, directing him to establish his claim as an ordinary creditor before the Official Liquidator if he wished to pursue it further.
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