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TMI Blog1991 (10) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... to as "the Act"), the applicant sought for leave from this court for it to continue its suit against the fourth respondent-company and the latter's guarantor, on the file of Sub-Court, Tanjore. We are told that the said suit has since been numbered as O. S. No. 57 of 1987. It was filed on April 20, 1986, and it is for recovery of a sum of Rs. 5,84,895.23. A winding up order has been passed against the said respondent-company by this court on August 20, 1986, in the abovesaid C. P. No. 58 of 1985 after the institution of the above suit. Therefore, the abovesaid application has been filed. The learned trial judge has granted leave subject to the following, terms: ( a )The applicant shall, in the event of obtaining a decree in its favour, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid clause ( b ) condition, stating that, if there is a deficiency by sale of the securities, the applicant will be excluded from all share in any dividend that may be declared by the official liquidator in the liquidation except to the extent provided under section 529A of the Act is not correct. Section 529A of the Act says: "Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company ( a )workmen's dues, and ( b )debts due to secured creditors to the extent such debts rank under clause ( c ) of the proviso to sub-section (1) of section 529 pari passu with such dues ; shall be paid in priority to all other dues. (2) The debts payable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny to its secured creditors is Rs. 3,00,000. The aggregate of the amount of workmen's dues and of the amounts of debts due to secured creditor is Rs. 4,00,000. The workmen's portion of the security is, therefore, one-fourth of the value of the security, that is, Rs. 25,000". So, if, in the above said suit, the appellant is declared as a secured creditor and the decree is granted accordingly, the decree amount in that suit can be realised only subject to the abovesaid section 529A read with section 529(1), proviso ( c ), of the Act. In other words, the workmen will be secured creditors ranking pari passu with the charge of other secured creditors. That is, the assets of the company in liquidation would remain charged for payment of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e third option is to value a security and come into liquidation and prove for any dues that, according to him, remain outstanding in respect of his debts, on the value of his security. In the present case, the applicant has exercised the first of the abovesaid three options. So, there is no prohibition for it to prove for the balance due to it, after deducting any amount realised no doubt subject to the provisions of the Act. To illustrate, as regards interest, in the case of an insolvent company, the creditors whose debts carry interest, are entitled to add the same for purposes of dividend only up to the date of the presentation of the winding up petition. Only in the event of surplus, they can claim subsequent interest. This rule will ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dator). Then, the official liquidator can take necessary steps for bringing to the notice of the court the abovesaid relevant provisions of the Act. In such a situation, the court, after it comes to a conclusion that the debt claimed in the suit is payable by the defendant-company, has to pass decree taking into account the above-said provisions of the Act. Thus, opportunity is there, for the official liquidator to make proper representations to the said court. Therefore, strictly, there is no necessity to impose the above-said conditions which only purport to ingraft the statutory provisions, while leave is granted. It may also be stated that in M.K. Ranganathan v. Government of Madras [1955] 25 Comp Cas 344 (SC), it has also been held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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