9911796707
TMI Blog2006 (1) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate. It is now a statutory corporation constituted by and under the Oil and Natural Gas Commission Act (Central Act 43 of 1959, hereinafter referred to as the Act ). The Act provides for the establishment of a Commission for the development of petroleum and petroleum products produced by it and for matters connected therewith. Section 2( f ) of the Act defines petroleum as having the same remaining as in the Petroleum Act, 1934 (Act 30 of 1934) and as including natural gas. The Commission established under the Act took over the previously existing organization with effect from 18-9-1959. 2.2 In the course of its drilling and exploration of oil, ONGC discovered oil-bearing fields in Cambay and Ankleshwar region in 1959 and 1961 respectively. In most of the oil fields situated in Gujarat, gas comes out along with crude oil and is commonly known as associated gas. In Cambay area, gas is unaccompanied by crude oil and is known as free gas. This is easily combustible and can be used as domestic as well as industrial fuel. We are concerned here with both these commodities which are generally known as natural gas and we shall refer to them compendiously as gas. 2.3 At that ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of the respective contracts. As the said price was heavy, industries were not satisfied. 2.5 In view of the rise in price, an association of gas consumers was formed and ultimately a society registered under the Co-operative Societies Act. They filed petition before this Court being Special Civil Application No. 833 of 1979 and others praying to issue appropriate writ directing the respondent to supply the break-up and data on the basis of which price structure was arrived at by O.N.G.C., for supply of the gas etc. These matters were finally decided by a Division Bench of this Court. The judgment in the case of Association of Natural Gas Consuming Industries of Gujarat v. O.N.G.C. 24(2) GLR 1437. In para 36 of the judgment on page 1460 the Division Bench has given certain directions and in para 37 of the judgment the Division Bench set aside the price demanded by O.N.G.C. leaving it open to deal with the question of price fixation in any one of the modes suggested in para 36. The petition was, therefore, partly allowed and rule was made absolute accordingly in the petitions with costs. 2.6 Being aggrieved and dissatisfied with the said judgment, O.N.G.C., pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-4-1987 except with the leave of this Hon ble Court. The respondent No. 10 company further undertakes to make available all its immovable assets in the event of discharging the liabilities which may arise on account of the difference between the price at which all the Gas being supplied in the company during the pendency of the proceedings in this connection and the price which may be determined by the Hon ble Court while disposing of the present appeals finally. 2.8 Thereafter, the matter was heard by the Hon ble Supreme Court finally. The Hon ble Supreme Court delivered the final judgment on 4-5-1990 (since reported in Oil Natural Gas Commission v. Association of Natural Gas Consuming Industries of Gujarat AIR 1990 SC 1851). The Hon ble Apex Court, as regards the price fixation, had set aside direction given in para 36 of the judgment of the High Court. The Hon ble Supreme Court did not approve the same and ultimately in para 40 sub-para ( iii ) on page 440 of the judgment the Hon ble Supreme Court has given certain directions by observing as under (at p. 1878 of AIR). 2.8a(viii) On behalf of the ONGC, it has been pointed out that a sum of Rs. 14.35 crores is out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed while interest calculated by ONGC is subject to verification (page 151 of paper book). It may be noted that at that time the company was before BIFR. 2.10 It may be noted from the record that the Hon ble Supreme Court by its order dated 29-4-1993 (page 154 of the paper book) granted the prayer of ONGC that ONGC would also be entitled to take steps regarding disconnecting the supply of gas. 2.11 From the record it appears that the matter was again heard by the Hon ble Supreme Court on 10-8-1993, by that time as far as the present respondents are concerned, BIFR order was already obtained on 28-5-1993 and after obtaining order from the BIFR the learned counsel for the present respondents made a statement that the liberty be granted for sale not only of Vatva land but also Unit No. 1, at Kankaria referred to in the order of BIFR to enable the company to first pay entire dues of the ONGC and thereafter utilize remaining surplus for other purposes as mentioned in the order of BIFR and the Hon ble Supreme Court has accepted the submission of the learned counsel for the respondent in this behalf and accordingly the Hon ble Supreme Court has granted the liberty to the company to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Liquidator [2004] 120 Comp. Cas. 505 1 (SC), a three Judge Bench of the Hon ble Supreme Court (Coram : S. Rajendra Babu, Dr. AR. Lakshmanan and G.P. Mathur, JJ.) considered its various earlier judgments and also section 529 and section 529A of the Companies Act and ultimately observed as under: (pages 56-57 of the paper book) Textile Labour Association s case ( supra ) the judgment was delivered on 12-4-2004 (relevant page No. 509/510) : 2.14A The effect of sections 529 and 529A is that the workmen of the company become secured creditors by operation of law to the extent of the workmen s dues provided there exists secured creditor by contract. If there is no secured creditor then the workmen of the company become unsecured preferential creditors under section 529A to the extent of the workmen dues. The purpose of section 529A is to ensure that the workmen should not be deprived of their legitimate claims in the event of the liquidation of the company and the assets of the company would remain charged for the payment of the workers dues and such charge will be pari passu with the charge of the secured creditors. There is no other statutory provision overriding the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable from the sale of assets/properties of M/s. Ambica Mills Company Ltd. (in liquidation). 2.16 The matter was heard at length and the learned Single Judge by his Judgment and order dated 1-10-2004 in paragraphs 39 and 40 observed as under : (Paras 41-42 of the paper book). 2.16A ONGC therefore cannot claim any preferential right on the basis of the order of 17-10-1997 in priority to the secured creditors and the workmen taking into consideration the provisions of sections 529 and 529A of the Act. Such preferential claim, if falling under section 530 of the Act would follow the claims of Secured Creditors and the Workmen under sections 529 and 529A of the Act. In case the claim of ONGC is not proved to be preferential under section 530 of the Act they would therefore fall for consideration along with all other claims of other creditors as ONGC, on its own saying, is a decree-holder. 2.16B In view of what is stated hereinbefore this application cannot be granted at this stage, i.e., before claims of Secured Creditors and workmen are proposed under sections 529 and 529A of the Act. Despite categorical statement at the Bar, under instructions, that ONGC did not want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking has been given. 3.3 The learned counsel further submitted that in this case the price is to be recovered right from 1975 and the petition was filed in 1979 and ultimately a decision was given by this Court in 1983. Thereafter, though the respondent succeeded in High Court but in appeal of ONGC before the Hon ble Supreme Court, the Hon ble Supreme Court has passed categorical order and pursuant to that undertaking was also given by the respondents in the appeal before the Hon ble Supreme Court. The judgment of the Hon ble Supreme Court was delivered on 4-5-1990. On that day onwards, the respondents were liable to pay the amount of gas which they have consumed. That amount was crystallized and ONGC was in place of decree-holder and the respondents were bound to pay the said amount. 3.4 It was further submitted that in view of the order of the Hon ble Supreme Court and in view of the sale of gas made by ONGC during the period in question, ONGC has to receive from and be paid by the said company, i.e., the company now in liquidation, an amount of Rs. 1799.367 lakhs as on 28-2-1998 which has on 30-9-2004 reached to the tune of about Rs. 37,22,52,211.20 with interest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a march or have a priority merely because the company went into liquidation and provisions of section 529 or 529A stood attracted. It was therefore contended that such a thing would lead to an extremely inequitable situation, and, therefore, the doctrine of actus curiae neminem gravabit would be attracted, and the ONGC would be entitled to its dues. 3.8 The learned counsel submitted that in view of the aforesaid development of the matter ONGC would be a secured creditor of the Company in liquidation as security in favour of the appellant was created by various orders of the Hon ble Supreme Court particularly the order dated 15-4-1987. The orders per se create security in favour of the appellant. The need for creation of such security was the fact that the appellant was directed to supply gas under directive orders of the Hon ble Supreme Court at a price lower than what was fixed by the appellant and what was actually due to it. 3.9 Before the learned counsel for the appellant argued the matter, he made further legal submission. He had invited our attention to certain statutory provisions of the Companies Act as well as the provisions of the Insolvency Act. 3.10 One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when the debt would have become payable, according to the terms on which it was contracted." 3.13 The learned counsel has also relied on section 47 of the Insolvency Act which provides Secured Creditors. Section 47(1) reads as under : "Where a secured creditor realises his security he may prove for the balance due to him; after deducting the net amount realised." 3.14 After relying on these statutory provisions, the learned counsel made submission as to why ONGC to be treated as secured creditor. 3.14A The appellant who was under no obligation to supply gas at a rate lower than that fixed by it was virtually compelled to supply gas at a price lower than fixed by it. The Hon ble Supreme Court was therefore aware that the appellant was being placed into a disadvantageous position and therefore found it necessary to protect the appellant s interest in the case of its ultimate success vis-a-vis its entitlement to price of gas. It is in such circumstances that the order of 15-4-1987 came to be passed and the said order has to be deemed as a creation of a procedural security/Court ordered security in favour of the appellant. The same, therefore, is adequate for the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a plaintiff against the assets of the company and even though such a charge may not have been registered under the provisions of section 109 of the Indian Companies Act, 1913 (section 125 of the Companies Act, 1956). The said charge would be a security in favour of the plaintiff and the plaintiff cannot be treated as a holder of simple money decree entitled to claim only after distribution to the secured creditors. Thus, in the said case, it was held that a charge would stand created in favour of the plaintiff irrespective of absence of a contractual charge or its registration. 3.14H The learned counsel has also relied on the judgment in the case of U.P. Union Bank Ltd. v. Dina Nath Raja Ram AIR 1953 All. 637. 3.15 The learned counsel therefore submitted that in any view of the matter ONGC is a Secured Creditor and when the Official Liquidator disburses the amount out of realisation, the ONGC is in pari passu with the amount of workers as per section 529A of the Companies Act and ONGC cannot become unsecured creditor and is entitled to recover the money in line with unsecured creditor. 3.16 In support of the aforesaid submissions the learned counsel first invited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company being the holder of a statutory lien is thus in the position of a secured creditor. Though the lien to retain possession of the goods as a bailer does not confer a right of sale on the applicant-company, the applicant-company, as an unpaid vendor of the spare parts supplied, has a right for re-sale. Having regard to these circumstances, I am of the view that in the interest of justice and for the purpose of closing the administration of the insolvent-company, it is necessary that the machineries, which are in the possession of the applicant company, are ordered to be sold in public auction by the applicant company after due publicity so as to enable the applicant company to adjust its dues including the cost of sale out of the sale proceeds. If there is any balance left, it shall be paid over to the official liquidator. The application is ordered in these terms. No order as to costs." 3.17A The learned counsel has further relied on the judgment of the Calcutta High Court in the case of Praga Tools Ltd. v. Official Liquidator of Bengal Engineering Co. (P.) Ltd. [1984] 56 Comp. Cas. 214 in which the Court has held as follows : "In my view both the arguments of Mr. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge becomes void against the liquidator and the creditor, yet he will be entitled to recover the debt due by the company on a par with other unsecured creditors. It is also evident that section 125 applies to every charge created by the company on or after 1-4-1914. But where the charge is by operation of law or is created by an order or decree of the Court, section 125 has no application." (p. 2114) 4.2 In the Hon ble Supreme Court has further held as follows AIR 1998 SC 2111 : "In Praga Tools Ltd. v. Official Liquidator of Bengal Engineering Co. (P.) Ltd. [1984] 56 Comp. Cas. 214 (Cal.) a consequent decree for repayment of money was passed against the Bengal Engineering Company on the suit filed by Praga Tools Company. The decree provided, inter alia, that in the event of non-payment of the decreed amount, the Praga Tools Company would be entitled to execute the decree and in the event of execution of the decree, the security furnished by the Bengal Engineering Company with the Registrar under an earlier order of the Court to the extent of Rs. 53,000 would continue as security for the decree. That decree was not registered. Thereafter, Bengal Engineering Company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the nature of the property charged, to enforce his charge in order to obtain the actual proceeds of his charge to satisfy his judgment, in whole or in part. Subject to the other provisions of law, a charge imposed by a charging order will have effect and will be enforceable in the same Court and in the same manner as an equitable mortgage created by the debtor by writing under his hand. A short passage in Mulla s Code of Civil Procedure (14th Edn.), Vol. II at Page 1510 is instructive and it reads thus : There is no provision in the Code for charging orders, but on the Original Side of the High Courts, which has inherited the older jurisdiction of the Court of Chancery, it is the practice in cases where it is considered undesirable to grant immediate execution to make a charging order in the form made in the case of Kewney v. Attrill [1886] 34 Ch. D 345 : 55 LT 805 : 35 WR 191. When the assets require nursing, the advantage of a charging order is that it enables the Court on the one hand to gain time and on the other hand to protect the decree-holder. It also avoids the confusion that might ensue if the Court were to allow a direct attachment while it is admin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to frustrate execution of a decree by disposing of his properties. The provision stipulates on entitlement for attaching such a property to prohibit the defendant from disposing of the property and rendering the plaintiff unable to get the decree executed thus virtually creating a security. 7.3 Similarly, Order 41 Rule 3 also stipulates that an appellant seeking stay of a money decree passed against him is required to be subjected to either deposit of amount in Court or furnishing a bank guarantee for the decretal dues. The afore referred also obviously is an act meant to protect and secure interest of the decree holder in case if upon hearing of the appeal the Court holds against the appellant. Submission to assail the judgment/finding of the learned Single Judge : 8. Further relying upon the aforesaid authorities, the learned counsel for the appellant made the following submissions and tried to demonstrate that the reasoning of the learned Single Judge of this Court in the impugned order and judgment is not correct and this Court may allow the appeal of the appellant. 8.1 It was submitted that the learned Judge failed to appreciate that there was no question of ONGC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that ONGC s right was on account of its having supplied gas under the directives (aegis) of the Hon ble Supreme Court s order wherein it had been directed to supply gas at a price lower than what it was entitled to, and a specific understanding and if ultimately the Court upheld the price fixation of the ONGC, it would be entitled to recover the difference in price. 8.5 It is submitted that in view of the order of the Hon ble Supreme Court right from 15-4-1987 ONGC has been treated as a secured creditor and that therefore ONGC should be given preferential treatment as a secured creditor and even amongst secured creditors in the matter of recovery of its outstanding dues over all other creditors who claim to be secured creditors and workmen and financial institutions. It was further submitted that the learned Judge ought to have appreciated that ONGC supplied the gas pursuant to the order of the Hon ble Supreme Court and hence ONGC is required to be treated as preferred secured creditor and at least secured creditor in terms of section 529/529A of the Companies Act by virtue of the conditional orders passed by this Court as well as Hon ble Supreme Court. 8.6 The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch an order as is necessary for doing complete justice between the parties in any cause or matter pending before it. 8.10 The learned counsel submitted that the learned Single Judge has not properly considered the provisions of the Provincial Insolvency Act, 1920 along with other authorities cited above read with the relevant provisions of the Companies Act. 8.11 The learned counsel further submitted that the learned Single Judge ought to have appreciated that in the peculiar facts and circumstances of the present case, such a view could not have been taken since ONGC had not supplied gas of its own free volition but under the orders of the Hon ble Supreme Court ( i.e. under compulsion). Such a supply could, by no stretch of imagination, be equated with the act of a businessman, unsecured creditor or a secured creditor, who of free volition and with the sole intent of earning profit, had entered into the business transaction with the company in liquidation. 8.12 The learned counsel further submitted that security in favour of ONGC had been created by this Court s order as well as order of the Hon ble Supreme Court and after creation of such a security, charge, or lien, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions. 8.16 The learned counsel therefore submitted that the position of the appellant would not be that of a mere decree holder but would be that of a decree holder coupled with the security created in its favour by the Court s order as well as the virtual assurance which was available to it (in the form of undertaking given by respondents) because of the Hon ble Supreme Court s order and thus, the appellant was required to be held as a secured creditor entitled to pari passu charge along with other secured creditors and the workmen. 8.17 U.P. Union Bank Ltd. v. Dina Nath Raja Ram AIR 1953 All. 637 provides that by reason of this section rules which are in force under the law of insolvency have been made applicable to winding up proceedings. The word rules has been used in this section as meaning the principles which regulate the affairs of insolvency proceedings. 8.18 Section 109 of Indian Companies Act, 1913 (corresponding to section 125 of the Companies Act, 1956) applies to a mortgage or charge created by the Company by contract and not to a charge arising by operation of law. What is position of the Secured Creditor : 8.19 The learned counsel has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pears on behalf of respondent No. 8, Mr. Vasavada, learned Advocate appears on behalf of Textile Labour Association. All the respondents have tried to support the judgment of the learned Single Judge. 9.1 Amongst all these advocates, we must state that on behalf of respondent No. 8 Mr. Mihir Joshi, learned Sr. counsel with Singhi and Company appears. He has addressed the Court at length and therefore we will take his submission first. 9.1(a) On behalf of one of the secured creditors Mr. Mihir Joshi, learned Sr. Counsel appears. He has invited our attention that in this case this Court has given judgment on 30-7-1983 and thereafter in January, 1984. He stated that Sadashiv Pimplaskar, Chief Manager, ICICI has filed affidavit in reply dated 18-7-2005 which is on page 181 of the paper book for which affidavit of IFCI Ltd., 5-9-2005 has been filed. Further affidavit of ICICI dated 26-9-2005 has been filed. He has invited our attention to the affidavit on page 181 of the paper book. 9.2 The learned counsel further submitted that the contention on behalf of ONGC that it has superior right even by virtue of the order of the Hon ble Supreme Court including order dated 17-10-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated 17-10-1997 is misconceived and has been rightly negatived by the learned Company Judge. In support of this, the learned counsel has made the following submissions : ( a ) Supreme Court Bar Association v. Union of India [1998] 4 SCC 409, where the Hon ble Supreme Court has considered the power and scope of Article 142 of the Constitution of India vis-a-vis power under Article 129 of the Constitution. 9.7 He has submitted that the contention of the ONGC that it is a secured creditor by virtue of the purported charge created by the order of the Hon ble Supreme Court dated 15-4-1987 is similarly misconceived and contrary to facts and applicable law. In support of the aforesaid, the learned counsel has made the following submissions : 9.8 The order dated 15-4-1987 of the Hon ble Supreme Court of India does not create a charge on the properties of the Company in favour of ONGC since the order by itself does not make the immovable properties of the Company a security for the payment of money to ONGC particularly since it does not crystallize the liability of the Company whereby the ONGC became entitled to realise a determined sum from the company and neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of execution of the decree. In such an event therefore the beneficiary of the undertaking does not become a secured creditor since it is well-settled that an attaching creditor is not secured creditor and attachment creates no charge in favour of the attaching creditor. In support of the aforesaid contention the learned counsel has relied on the judgment of the Division Bench of the Bombay High Court in the case of Goverdhandas Vallabhdas v. Official Liquidator Electro-Metal Refining Co. Ltd. AIR 1930 Bom. 16 where the Division Bench (Coram : Marten, CJ. and Murphy, J.) wherein on page 18 of the said judgment it has held that attaching creditor is not a secured creditor, an attachment creates on charge in favour of the attaching creditor but it merely prevents and avoids alienation and confers no right on the attaching creditor and further on the judgment it is observed as under : "...Under those circumstances his present application to be treated as a secured creditor in respect of this engine and to be paid out of proceeds of the engine in priority to the other creditors, is misconceived and must be dismissed...." (p. 21) 9.12 In the alternative, if the undertaking fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and its right would be subject to previously created rights. 9.17 The Contributory Mortgage Deed in favour of ICICI and others is dated 20-1-1984, the order of the Supreme Court of India relied upon by ONGC is dated 15-4-1987 and the undertaking has been furnished by the company on 27-5-1987. The creation of the purported charge in favour of ONGC is therefore subsequent to the mortgage deed in favour of ICICI and others. It is an admitted position that the assets of the company are insufficient to satisfy the dues of the secured creditors. Therefore, under section 48 of the Transfer of Property Act, where the rights created by the company cannot be exercised to the full extent together, each later created right would be subject to the rights previously created. 9.18 There is no special contract or reservation binding the earlier transferees and in fact there is an express stipulation in the undertaking furnished by the company that it will not further encumber or alienate its properties which therefore acknowledges previous transfer by way of mortgage in favour of ICICI and others and therefore the ONGC would only be a subservient charge holder. 10. As regard TLA, Mr. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the Hon ble Supreme Court in the case of Textile Labour Association v. Official Liquidator [2004] 9 SCC 741 the contentions of ONGC that the previous order of the Hon ble Supreme Court has not been considered the said arguments cannot be considered. In view of the above, the contention of the ONGC that it has a superior secured charge cannot remain same. In view of the same, we have to note that the previous orders of the Hon ble Supreme Court are available to the Hon ble Supreme Court and the Hon ble Supreme Court has interpreted those orders in the final judgment and effect of the earlier orders when the Hon ble Supreme Court has passed recent and detailed judgment. 10.2 We have also considered the submissions of Mr. J. T. Trivedi, learned advocate on behalf of respondent No. 2 Bank of India. He has relied on affidavit dated 20-9-2004 filed by Shri K.K. Nair, Assistant General Manager, Ahmedabad Recovery Branch. From the record it is submitted that Bank of India, one of the Secured Creditors, had filed a Review Petition in the Hon ble Supreme Court and there were number of Review Petitions filed by different Secured Creditors. This submission was made in contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as the second loan). In respect of the said sum, IFCI is entitled to receive from the Official Liquidator High Court of Gujarat at Ahmedabad a share on out of the sale proceeds lying with Liquidator after the sale of the assets of the Company for the satisfaction of its claim against the Company to the extent of its loan liability and interest thereon at the contractual rates. As regards first and second loan, the terms and conditions governing the rate of interest, period of repayment, nature of security etc., in respect of first loan and second loan were entered into by Ambica Mills as contained in the Common Loan Agreements dated 24-3-1982 and 8-6-1988. It was further stated by the Company that under the Loan Agreements in respect of the loans together with interest, liquidated damages, premia on prepayment, costs, expenses and all other monies, the Company executed in favour of IFCI Ltd., and others. Deed of Hypothecation dated 24-3-1982 in respect of first loan thereby creating a first charge on all its movable properties, pertaining to the Textile Division and also executed in favour of IFCI Ltd., and others Deed of Hypothecation dated 8-6-1988 in respect of second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the light of the failure ONGC should not be treated as a Secured Creditor. All other contentions and submissions made by ONGC will not help the ONGC in view of specific provisions of section 125 of the Act and the statutory requirement under the said section. We are of the view that the learned counsel for the appellant is right in contending that prior to order dated 12-4-2004 ONGC had no occasion to make a claim as Secured Creditor in light of the fact that by virtue of various orders commencing from 15-4-1987 till final judgment made by the Hon ble Supreme Court ONGC was under a belief that it had a preferential right at the time of disbursement of the funds of the Company in liquidation considering the decisions rendered by the Apex Court in favour of ONGC. 11.3 In view of the aforesaid facts and circumstances of the case, the ONGC was permitted to raise the contention especially in the light of the fact that ONGC specifically based its claim on various orders made by the Hon ble Supreme Court and did not want to lodge any claim before the Official Liquidator, as categorically stated at the Bar by the learned Additional Advocate General under instructions. We are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.8 We are therefore of the view that the learned Single Judge was right in holding that the amount taken away by the Liquidator from the realisation of the security outside winding up by the Secured Creditor is permitted to be recovered or reimbursed out of the monies that may be realised at the instance of other creditors and for such reimbursement the Secured Creditor gets priority overall other creditors. Therefore, what the Secured Creditor loses towards workmen s portion out of his security can be claimed by Secured Creditor as a secured amount with priority over other creditors out of other realizations made by other creditors when the Company Court directs disbursement of the funds. But at the same time, position of the Secured Creditor does not improve from what it was originally and the priority of the Secured Creditor would not extend to its entire unrealized sums which might be in excess of the value or the price realised from his security. 11.9 In view of the aforesaid facts and circumstances of the case, we are of the view that the learned Single Judge was right in observing that even on this count ONGC cannot be permitted to seek priority over the Secured Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is nothing on record to show that ONGC has opted to stay outside winding up proceedings and realise its security. On the contrary, ONGC has approached the Court claiming entire outstanding dues without stating as to whether ONGC intends to relinquish its security and prove its debts as required under section 529(1) of the Act. Thus a peculiar situation arises wherein the ONGC is neither ready and willing to relinquish its security nor is ready to opt to realize its security and on exercise of such an option permit the Official Liquidator to enforce pari passu charge in favour of the workmen to the extent of workmen s portion. In other words, ONGC would like the Company Court as well as Division Bench of this Court in appeal to permit ONGC to act beyond the provisions of the Act. If such exercise is not permissible for the Apex Court while exercising powers under Article 142 of the Constitution by no stretch of imagination can it be stated that the Company Court would have any such jurisdiction. Because the Apex Court exercises jurisdiction under Article 142 of the Constitution to do complete justice between the parties, and while doing so ordinarily cannot disregard a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court cannot be accepted. We are of the view that various orders of the Hon ble Supreme Court only show that the consumers will not charge and encumber or alternate any of the immovable assets except with the leave of the Hon ble Supreme Court and that they will make their immovable assets available for discharging the respective liabilities on account of difference in the price of the gas supplied during pendency of the appeal as determined by order made by the Court while disposing of the appeals. 11.15 The next contention we have to consider is whether the undertaking given by respondent would amount to mortgage, charge or lien in the property considering definition of secured creditor under section 2( e ) of the Provincial Insolvency Act, 1920. It is admittedly not a mortgage. In fact, no specific submission as to whether such undertaking is a mortgage or a charge or a lien was advanced on behalf of ONGC. The question is if it is to be treated as a charge the same has to be specifically registered under section 125 of the Act in absence of which the same would be void against Liquidator and any Creditor of the Company. 11.16 Though much reliance has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egory of general lien-holder described under section 171 of the Contract Act. 11.17 Laws of Lien (section 49 of the Sale of Goods Act provides termination of lien) Chapter 5 of the Sale of Goods Act section 45 defines unpaid seller. Section 46 provides unpaid seller s rights which provides that unpaid seller of goods has a lien on the goods for the price while he is in possession of them, and in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them; and a right of re-sale as limited by this Act. Section 47 provides seller s lien. Section 49 provides termination of lien which reads as under: " Termination of lien. (1) The unpaid seller of goods loses his lien thereon ( a )when he delivers the goods to a career or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods; ( b )when the buyer or his agent lawfully obtains possession of the goods; ( c )by waiver thereof. 2. The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods." (Re : Pollock and Mulla o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are in force for the time being under the law of bankruptcy with respect to the estates of persons adjudged bankrupt (Companies Act, 1948, section 317, re-enacting provisions originally contained in the Supreme Court of Judicature Act, 1875, section 10). 11.22 Halsbury s Laws of England, 4th Edition, para 1299 regarding Position of Secured Creditors, page 741 has been given thus : 11.23 A secured creditor need not prove at all, but may rely on his security. He may pursue the remedies which he possessed before the winding up. If a secured creditor of an insolvent company proves for his debt, the rules in bankruptcy applicable to proofs by secured creditors apply. 11.23A Secured Creditors - A creditor who has a mortgage, charge or lien on the property of the company as security for his debt may either : ( a )sell the property subject to his security and prove in the winding up for the balance of his debt after deducting the amount realised, or ( b )surrender his security to the liquidtor and prove for the whole of his debt as an unsecured creditor, or ( c )estimate the value of the property subject to his security, and prove for the balance of his debt after ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company and thereafter a winding up order is made without any further step being taken by such judgment-creditor, he would unquestionably be an unsecured creditor, like any other unsecured creditor, who had neither filed a suit nor obtained a decree nor attached the property. [Re : Ananta Mills Ltd. v. City Deputy Collector [1972] 42 Comp. Cas. 476 (Guj.) in which this Court (Coram : D.A. Desai, J.) has observed on pages 483-484]. 11.25 Actus Curle Neminem Gravabit - An act of the Court shall perjudice no man. This maxim is founded upon justice and good sense; and affords a safe and certain guide for the administration of law. In virtue of it, where a case stands over for argument on account of the multiplicity of business in the Court, or for judgment from the intricacy of the question, the party ought not to be prejudiced by that delay, but should be allowed to enter up his judgment retrospectively to meet the justice of the case; and, therefore, if one party to an action dies during a curia advisari vult, judgment may be entered nunc pro tunc, for the delay is the act of the Court, for which neither party should suffer. (Re : Broom s Legal Maxims, 10th Edi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd unambiguous language contained in section 529A(1)( a ). We have, therefore, no hesitation in holding that finding of this Court in Allahabad Bank to the aforementioned extent does not lay down the correct law." 11.28 In view of the same, ONGC having failed to establish any lien it cannot be treated as a Secured Creditor even on this count. The dictionary meaning on which reliance is placed is either in context of the Bankruptcy Act or the Provincial Insolvency Act and hence again in context of the three terms : mortgage, charge, lien, which have already been examined hereinbefore. 11.29 In view of this once ONGC is held to be not a Secured Creditor it will have to make its claim in accordance with the provisions of the Act as applicable to other Creditors and cannot seek any preferential treatment. To sum up ONGC is not entitled to seek a position superior to that of Secured Creditors nor is ONGC a Secured Creditor in light of the facts and circumstances available on record. For that we rely on the judgment of the Hon ble Supreme Court in the case of Textile Labour Association ( supra ). 11.30 The judgment of the Apex Court which we have extracted earlier states th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on along with all other claims of other Creditors as ONGC, on its own saying, is a decree holder. 11.33 In view of the aforesaid facts and circumstances the Company Application No. 445 of 2000 in Company Petition No. 121 of 1995 filed before this Court praying that this Court may direct the respondent to make payment to the applicant ONGC towards outstanding dues of Rs. 1799.367 lakhs dated 28-2-1998 with further interest thereupon till the date of payment/till the date of realisation for natural gas supplied to M/s. Ambica Mills Company Limited (in liquidation) cannot be granted at this stage i.e. before the claims of Secured Creditors and workmen are processed under sections 529 and 529A of the Act. From the record it appears that ONGC did not want to lodge any claim before the Official Liquidator, it will be open to ONGC to lodge its claim in accordance with law and seek its satisfaction when claims of other creditors of the company in liquidation are taken up for consideration for distribution of the funds which may be available at that time. 11.34 In view of the submissions which we have noted we have to consider what is definition of secured creditors and whether ON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promissory note, it does not make the creditor a secured creditor. The instant case is similar to such a case. The question to be answered is whether there is any security as contemplated by sections 529 and 529A of the Companies Act. The simple answer is there is no such security. The very language of section 529 contemplates the security of the kind mentioned in the Black s Law Dictionary as quoted hereinabove. There is nothing given by Ambica Mills or even the Hon ble Supreme Court to assure the payment or performance of the debt of Ambica Mills on which ONGC can fall back in the event of its failure to perform the principal obligation. 11.38 In the above dictionary, at page 1354, it is stated that secured creditors and a creditor who holds some special pecuniary assurance of payment of his debt, such as a mortgage, collateral or lien. ONGC does not hold any such assurance from Ambica Mills. 12. In view of the same, we are of the opinion that the finding, conclusion arrived at and reasoning given by the learned Single Judge do not require interference by this Court, and the appeal is dismissed accordingly with no order as to costs. After the pronouncement of this jud ..... 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