9911796707
TMI Blog1980 (3) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... money lying in the hands of the respondent. From the facts of this case which are not in dispute it appears that prior to the said company, India Electric Works Ltd., being wound up by an order of this court, an agreement was entered into with the State Bank of India, Calcutta, for the advance of money and/or overdraft facilities for running the business of the company by way of cash credit account on various terms and conditions which are set out in the letter dated the 16th of January, 1963, a copy of which is annexed to the affidavit in support of this application by and under which it transpires that pursuant to the correspondence between the company and the Stale Bank of India, a cash credit accommodation was sanctioned to the company on the terms and conditions set out in the said letter dated the 16th of January, 1963, from the State Bank of India to the company, the limit being Rs. 85,00,000 and the security being hypothecation of the company's whole assets, stock-in-trade, raw materials, book debts, stores and all other assets together with a guarantee of the President of India. There were two accounts, one being account No. 1, the Cash Credit Account and the other being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the purpose of appreciating the correct position it will be convenient to set out some relevant correspondence, the first being a letter dated the 6th of January, 1963, written by the State Bank of India, Strand Road, Calcutta, to the India Electric Works Ltd. sanctioning the cash credit accommodation in the two accounts being accounts Nos. 1 and 2. Copy of letter No. ADV |C. 365 dated the 16th January, 1963, from the State Bank of India, 3, Strand Road, Calcutta, to the India Electric Works Ltd., Diamond Harbour Road, Calcutta 34. Private and Confidential Dear Sirs, Cash Credit Accounts. A/c. No. 1-limit Rs. 85 lakhs. A/c. No. 2-limit Rs. 55 lakhs. With reference to the correspondence resting with your letter No. ADV/C. 8265 dated the 20th December, 1962, we have pleasure in advising, that the bank has sanctioned cash credit accommodation to the company on the following terms and conditions : Account No. 1 : (a)Limit-Rs. 85 lakhs. (b)Security-Hypothecation of the whole of the company's stock- in-trade of whatever kind and description, whether raw or in process of manufacture, and all articles manufactured therefrom, stores, book debts and other assets plus the guara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn to us the duplicate of this letter duly signed by yourselves and the Secretary to- the Government of India, Ministry of Commerce & Industry, in token of acceptance of the terms and conditions of the advance, as indicated above. Yours faithfully, Sd/- Superintendent. Duplicate duly signed by Sri Ranganathan, Secretary, Ministry of Commerce and Industry and Shri P. C. Basu, Authorised Controller. India Electric Works Ltd., sent to Bank. Pursuant to the said agreement, the State Bank of India lent and advanced diverse sums of money and the said agreement was duly guaranteed by the Union of India, in terms of the said agreement, up to the total amount together with interest aggregating to Rs. 2,02,71,371. Before the said arrangement for the overdraft on cash credit account and the guarantee by the Union of India, the State Bank, pursuant to its cash credit arrangement prior to the liquidation of the company, presented a winding-up petition being C.P. No. 361 of 1967 against the company, and, by an order dated the 27th of August, 1968, the company was wound up and the official liquidator was appointed the liquidator. Before the winding-up order, on the 8th of November, 1968, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, Advances Department, State Bank of India (Head Office), Calcutta. He, however, informed me that they had not yet received your letter. Yours faithfully, Sd/- J. P. Mukherjee, Official Liquidator, High Court, Calcutta". It appears that on the 28th of March, 1977, the Union of India made an application for a condonation of the delay in preferring its claim and filing its proof of debt in respect of the said amount before the official liquidator.. By an order dated 30th March, 1977, the Union of India was given leave to file the proof of debt before the official liquidator before 13th May, 1977. Pursuant to the said order dated 30th March, 1977, the Union of India filed its proof of debt before the official liquidator on or about 13th May, 1977. The petitioner is also claiming a sum of Rs. 43,17,00,000 as an ordinary creditor in addition to the said claim as a-secured creditor for the amount of Rs. 2,02,71,371. It is alleged that between 3rd of August, 1967, and the 30th of November, 1968, the petitioner had advanced 19 short-term loans to the company totalling to Rs. 43,17,00,000 for the purpose, inter alia, of payment of the mounting labour costs, etc., of the company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator in the course of administration of the company in winding-up. Therefore, Mr. Chatterjee submitted that the present application should be dismissed with costs and the Union of India is not entitled to any right as a secured creditor or an ordinary creditor in respect of the sum claimed by the Union of India out of the assets lying in the hands of the official liquidator. Mr. S. B. Mukherjee, appearing for the official liquidator, submitted that the Union of India having paid the State Bank of India as the guarantor for the said loan granted by the State Bank of India to the company has now stepped into the shoes of the State Bank of India and is entitled as a secured creditor in respect of the assets and properties of the company, which were charged and mortgaged in favour of the State Bank of India by the said company against the said cash credit accounts hereinbefore stated. Mr. Mukherjee submitted that there is no dispute whatsoever that the State Bank of India has been paid by the Union of India and on such payment the title deeds were released to the company and the claim of the State Bank of India against the company has been satisfied by the Union of India. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, in favour of the State Bank of India and it also appears that on or about 4th January, 1963, the company deposited with the State Bank of India at Calcutta the title deeds of the immovable properties with intent to create a security by way of equitable mortgage for the money lent and advanced by the State Bank of India to The company during the period it was working under the Industries (Development & Regulation) Act, 1951, through the authorised controller appointed by the Central Govt. The State Bank of India did not file any suit for the recovery of its dues and the enforcement of its securities but applied for a winding-up of the company and the said company was wound up as hereinbefore stated by the order dated the 27th of August, 1968. It appears that after negotiation between the State Bank of India and the President of India, who was the guarantor, a sum of Rs. 2,02,71,371, being the total amount advanced together with interest by the State Bank of India in respect of the said Cash Credit & Loan Account, was paid by the Union of India to the State Bank of India. The Union of India submitted proof of its claim before the official liquidator in which it was alleged that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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