9911796707
TMI Blog2000 (8) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... o for the Appellant. A.D.N. Rao and A. Subba Rao for the Respondent. JUDGMENT Phukan, J. - The appellant is a Corporation established under The State Financial Corporations Act, 1951 ( Act of 1951 ). Two companies viz. Nagarjuna Paper Mills and Chandra Pharmaceuticals Ltd. were in liquidation and the liquidation proceedings were pending before the learned company Judge of the High Court. The above two companies obtained loans from the appellant and for realisation of dues, the appellant invoked the provisions of section 29 of Act of 1951. As both the companies were under liquidation, the appellant filed two separate applications under section 446(1) of the Companies Act, read with sections 29 and 46 of the Act of 1951 bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management or possession or both of the industrial concerns, as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation." "529. Application of insolvency rules in winding up of insolvent companies. (1) In the winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 debts." 6. The only contention of Mr. Y. Prabhakara Rao, the learned counsel for the appellant was that the Act of 1951 being a special Act, power of the appellant-corporation to invoke provisions of section 29 is absolute and cannot be restricted. 7. By inserting the proviso of section 529 by the amending Act of 1985 The Legislature has provided that the security of every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen s portion therein and, where a secured creditor; instead of relinquishing the security a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 529A have competing non obstante provisions but the proviso to sub-section (1) of 529 and section 529A being a subsequent enactment, the non obstante clause in section 529A prevails over the non obstante clause found in section 29 in view of the settled position of law. We are, therefore, of the opinion that the above proviso to sub-section (1) of section 529 and section 529A will control section 29. In other words, the statutory right to sell the property under section 29 of the Act of 1951 has to be exercised with the rights of pari passu charge to the workmen created by the proviso to section 529. Under the proviso to sub-section (1) of section 529, the liquidator shall be entitled to represent the workmen and force the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
