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TMI Blog1998 (4) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting to the prayer. The official liquidator in his reports has also taken a similar stand. The matter was heard at length. Mr. Pawan Kumar, learned counsel for the BISCICO appearing in support of the application, submitted that the BISCICO had taken charge of the assets of the company in exercise of its statutory powers under section 29 of the State Financial Corporations Act, 1951 ("SFC Act", for short), after long contest on October 15, 1996, that is, much prior to the winding up order. Although in terms of section 456 of the Companies Act, where a winding up order has been made or where a provisional liquidator has been appointed, the liquidator is empowered to take into his custody or under his control, all the property, effects and actionable claims of the company, the said provisions as well as other relevant provisions of the said Act have to be read in derogation to the provisions of the State Financial Corporations Act, in view of the non obstante clause contained in section 46B of that Act. In other words, notwithstanding the winding up order, the BISCICO, as a financial institution established under section 3 of the State Financial Corporations Act, 1951, is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. Counsel further submitted that unless the full charge of the assets and records are handed over to the official liquidator, he cannot file any statement of affairs under section 454 of the Companies Act, nor can he get the accounts audited nor discharge his obligations under various statutes, such as, the Income-tax Act. He pointed out in this connection that neither income-tax returns have been filed for the intervening periods nor the municipal taxes have been paid to the Patna Municipal Corporation endangering the interests of all creditors, shareholders, etc. He suggested that this court may consider appointing a committee to look after the management of the company associating the official liquidator, secured creditors, etc., for properly looking after the interests of all concerned. Mr. R.A. Singh, learned counsel for the company-petitioner, adopted the submissions of Mr. U.P. Singh. In the course of submissions, he referred to the order dated September 22, 1995, passed in Company Petition No. 2 of 1991, in the case of Bihar Woollen Fabrics Limited ( In Liquidation ), In re (since reported in [1998] 93 Comp Cas 334 (Patna)), whereby a similar plea of the BISCICO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to an industrial concern." The effect of a non obstante clause occurring in a statute is well known. It sets at naught and obliterates such other provisions as may be inconsistent or repugnant to the provisions of that statute. In the book entitled The State Financial Corporations Act, 1951, 3rd Edition, published by the Law Book Company (P) Ltd., the learned authors have referred to a decision of the Rajasthan High Court (at page 321 of the book) in the case of Boolani Engineering Corporation v. Asup Synthetics and Chemicals Ltd. [1990] 1 RLR 10 ; [1994] 81 Comp Cas 872 (Raj) in which the Rajasthan High Court held that the provisions of the SFC Act being special Act, shall prevail over the Companies Act, which is a general Act. In that case, as would appear from the facts stated in the book, the Rajasthan State Industrial Development and Investment Corporation Ltd. (a similar institution like BISCICO in the State of Bihar) had granted a loan to the respondent-company. Later, it took possession of the company to liquidate the loan under section 29 of the SFC Act. Winding up proceedings was already pending in the High Court. The Rajasthan High Court held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Investment Corporation of Maharashtra Limited [1993] 78 Comp Cas 803 ; [1993] 2 SCC 144, the Supreme Court held that where two Acts contain non obstante clauses, the provisions of the latter Act shall prevail. Section 529A of the Companies Act, it appears, was inserted by the Companies (Amendment) Act, 1985, i.e. , in the year 1985, while section 46B of the SFC Act, had been inserted earlier by the State Financial Corporations (Amendment) Act, 1956. It is, therefore, obvious that the workmen's dues have to be treated at par, pari passu, with the claim/debts due to the BISCICO and/or other secured creditors (said to be only the Central Bank of India). The BISCICO, therefore, cannot be given a free hand in the matter of sale of the assets. This is really not what the BISCICO seeks in the present application. I may observe that it has been a sad experience of this court that in similar other matters, the court has not been able to find suitable buyers. There has been absolutely no response to the advertisement of sale. And in those matters suggestion has been made to allow the banks and financial institutions, the concerned secured creditors, to take steps for sale of the assets ..... 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