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TMI Blog1999 (10) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... plication was allowed and APSFC was granted permission to stay outside liquidation on the following terms and conditions : "( 1 )that the petitioner shall inform the Liquidator about the stage of the proceedings, ( 2 )that the petitioner should not dispose of the assets of the company or realise the amounts in pursuance of any decree which might be passed, without prior permission of the Court, and ( 3 )that the petitioner should undertake to discharge the liability under section 529A of the Companies Act, 1956." 3. The Official Liquidator has filed an application in C.A. No. 127 of 1999 on 16-3-1999 for directing the APSFC to pay Rs. 4,800 being the salary and other incidental charges payable to the existing watchman for the period from 6-11-1998 to 31-3-1999 and for further direction that the secured creditor-APSFC should also deposit with the Official Liquidator a sum of Rs. 2,300 per month with effect from 1-4-1999 to meet the salaries of two watchmen and other incidental expenses. On 15-6-1999, APSFC has filed an application in C.A. No. 295 of 1999 for directing the Official Liquidator to deliver the assets of the company in liquidation which assets have been mortgag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, APSFC is bound to pay the requisite amounts to the Official Liquidator for payment of salaries of watch and ward which have been appointed to preserve the properties of the company in liquidation. 6. In the case of A.P.S. Financial Corpn. v. Electrothermic (P.) Ltd. 1996 (2) ALD 213 (DB), a Division Bench of this Court, relying on the cases of M.K. Ranganathan ( supra ), Central Bank of India v. Elmot Engg. Co. [1994] 81 Comp. Cas. 13 (SC) and A.P. State Financial Corpn. v. Official Liquidator 1995 (2) ALT 406 (DB) has held that : ". . . under section 29 of the SFC Act, a statutory right to sell the property has to be exercised with the rights of pari passu charge holder in whose favour the statutory charge is created by the proviso to section 529(1) of the Companies Act, 1956. Section 529A of the Companies Act, has put workmen s dues as well as 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, on the same priority and in the case of an insolvent company, when assets are going to be subjected to the claim of the creditors, it is indeed nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [1998] 91 Comp. Cas. 434 (AP), it has been held that the secured creditors standing outside the winding up proceedings are liable to pay his share of expenses incurred by the Official Liquidator for the preservation of the security before its realisation by the secured creditor. It has also been held that by virtue of section 32E(2) of the SFC Act, the provisions of the Companies Act, are made applicable to the management of any industrial concern when it is taken over by the Financial Corporation. From this, it follows that the power of the Corporation to realise its debts under sections 29 and 30 of the SFC Act would be subject to the provisions of the Companies Act. This conclusion is irresistible, because section 46 of the SFC Act specifically provides that save as provided in this Act. The provisions of this Act shall be in addition to and not in derogation of any other law for the time being applicable to the industrial concerns. There is no provision in the SFC Act similar to section 529A of the Companies Act, therefore, section 529A of the Companies Act would be applicable in addition to whatever that is provided in the SFC Act. Thus, section 32E of the SFC Act would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the three Division Benches of this Court, which have followed the law laid down by the Apex Court, which is binding on this Court, as also of the opinion of the learned Single Judge, with which I am in complete agreement, it is not at all possible to accept the contention of the learned counsel appearing for the APSFC that section 46B of the SFC Act has got overriding effect on the provisions of the Companies Act, and the contrary view taken by the Division Bench of the Gujarat High Court in the case of Gujarat State Financial Corpn. ( supra ) is of no help to the APSFC, particularly when, relying on the case of Maharashtra Tubes Ltd. v. State Industrial Investment Corpn. of Maharashtra [1993] 2 SCC 144, it has been held in the case of Sitani Textiles Fabrics (P.) Ltd. ( supra ) that, when both the Acts are special Acts, each having different objectives, the provisions of the latter Act would ordinarily prevail and govern over the former Act. 12. As noted above, permission to stay outside liquidation has been granted to the APSFC on conditions set out in para 2 above. The claim of the workmen to be quantified has been secured. It has also been ordered that, befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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