9911796707
TMI Blog1991 (1) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter referred to as "the SFC Act"). The company is being wound up by this court. The official liquidator attached to this court is the liquidator of the company. The liquidator has filed a counter-statement. The KFC, State Bank of Travancore and Small Industries Development and Employment Corporation are the secured creditors of the company. The State Bank of Travancore has got charge over stock-in-trade, raw materials, etc., of the company. The KFC has got charge over land and building, plant and machinery. The Small Industries Development and Employment Corporation has got second charge over the machinery of the company. The State Bank of Travancore, after obtaining leave of this court, sold the movable assets. The KFC can exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions (India) Ltd., which is the holding company of the company in liquidation. The company had taken a loan of Rs. 12.12 odd lakhs from the KFC. The loan is secured by a first charge on the fixed assets of the company in liquidation and also by a guarantee given by the second respondent-company. No reasons are stated as to why the KFC is taking recourse to their power under section 29 of the State Financial Corporations Act. According to them, KFC has not chosen to exercise this power in many other cases where the outstanding dues are higher than that of the company in liquidation. According to them, this application is an instance of the misuse of the power under section 29 with a view to cause difficulties to the additional second respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sell the property. Under section 529A of the Companies Act, workmen's dues are made an overriding preferential payment pari passu with the debts due to secured creditors. There is a non-obstante clause in section 529A. The said section, therefore, has to prevail over section 29 of the State Financial Corporations Act in case of a conflict. Thus, the workmen's dues which rank pari passu with the dues of the secured creditors will have to be paid from the proceeds of the assets of the company including the security given to the secured creditors. In case of any dispute about the apportionment of the dues to the workers, such a dispute cannot be left to be decided by the KFC. So also, if there is a dispute regarding the amount due ..... X X X X Extracts X X X X X X X X Extracts X X X X
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