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TMI Blog1998 (2) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... to the said company under liquidation. There are three applicants in C.A. No. 241 of 1994. They are Industrial Development Bank of India, Industrial Finance Corporation of India Ltd. and Industrial Credit and Investment Corporation of India Ltd. A loan of Rs. 242 lakhs was sanctioned to the company by the three applicants herein in the proportion of Rs. 121 lakhs, Rs. 60 lakhs and Rs. 61 lakhs during the year 1984-85. A further loan of Rs. 23 lakhs was advanced by the first applicant (IDBI) in August, 1986. According to the applicants, the company created a first charge on movable properties by way of hypothecation on October 13, 1984, and a mortgage of its immovable properties by deposit of title deeds on February 21, 1986. For securing the second loan, the respondent-company executed a deed of hypothecation creating a first charge on certain movable properties and created a general mortgage by way of extension in favour of the first applicant by giving consent to the first applicant to continue to hold the title deeds deposited earlier as security for the second loan as well. On failure to discharge the loans, the three applicants in C.A. No. 241 of 1994 filed Suit No. 205 of 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company and it is alleged that the suit has been instituted in Hyderabad solely with a view to enforce the personal guarantees of the second respondent. At this juncture, suffice it to observe that the objection taken by the second respondent does not deserve serious consideration as it has no relevancy as far as the present application is concerned. After hearing counsel, I passed an order on April 25, 1997, directing the official liquidator to take steps calling for claims if any from the workmen/employees of the company by taking out an advertisement and by local publication. The official liquidator was also directed to verify whether any dues to the workers and secured creditors (other than the applicants) are disclosed from the account books. By a further order dated October 1, 1997, the applicants were directed to advance a sum of Rs. 3,000 to the official liquidator to meet the expenses for advertisement and publication. The official liquidator has filed a report on February 19, 1998, stating that he gave a paper advertisement in the Telugu daily " Eenadu " and got the local publication done by beat of "tom tom" in the village in which the factory is situated, but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld duly take note of this fact and should like to grant leave required by sub-section (1) of section 446 ; and by the same token refuse to transfer the proceeding to his court. This is not to say that in all the cases where the proceedings have been initiated by the main secured creditor, the company court would grant leave. Much would depend on the circumstances of each case. But, if the position be that the secured creditor who had approached the civil court is one amongst many similar creditors, it may be that the company court feels that to take care of the interest of other secured creditors, either the relief of leave does not deserve to be granted or that the proceeding is required to be transferred to it for disposal...The need to protect the company from unnecessary litigation and costs have, however, to be borne in mind by the company court". Their Lordships concluded the discussion as follows (page 264) : "We are, therefore, of the view that the approach to be adopted in this regard by the company court does not deserve to be put in a strait-jacket formula. The discretion to be exercised in this regard has to depend on the facts and circumstances of each case. While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir best interests. I do not think that by granting leave to the applicants to proceed with their suits and to enforce their securities and realise their dues by standing outside the winding up, there will be detriment to anybody concerned with the company. It would be sufficient if necessary conditions are imposed for the purpose of ensuring payment of workmens' dues if any found to be due ultimately and to take care of the event of the surplus remaining for the purpose of distribution to the unsecured creditors and shareholders though unlikely it is. Accordingly, I grant leave under section 446(1) as prayed for in the applications, subject to the following conditions : (1)The official liquidator at Hyderabad shall be apprised of the stages of the suit/O.P. pending in the High Court of Mumbai and Debt Recovery Tribunal, Bangalore, from time to time in six monthly intervals. In particular, the applicants should inform the official liquidator about the commencement of the trial and the date on which the case is posted for arguments. (2)The official liquidator shall have custody of account books, registers and records of the company. If any copies therefrom are required by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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