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TMI Blog2005 (9) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Liquidator issued a public notice for sale of the immovable property of the company. The auction took place on 23-7-2003 and the offer by the Petitioner No. 1 was accepted for a total consideration of Rs. 4.10 crores. On 6-8-2003 the entire consideration of Rs. 4.10 crores was paid in the office of the Official Liquidator. On 12-8-2003 the physical possession of the immovable property as described earlier was given to the petitioners. The Official Liquidator on 17-10-2003 executed the Deed of Assignment in favour of the petitioner No. 1. 2. After the property had vested in the petitioner No. 1 pursuant to the auction sale and Deed of Assignment, the respondent No. 2 issued a warrant of attachment which was pasted at the site on 22- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suant to the order of the Company Court the property was sold in public auction and purchased by the petitioner No. 1 and insofar as the claim of respondent Nos. 1 and 2 is concerned, the same could be lodged in Form No. 66. The copy of the Company Courts order was enclosed with the said letter. It is the case of the petitioners that warrant of attachment has created serious hurdles and the petitioners are not in a position to carry on business and use the premises as basic amenities like water is not provided. 3. At the hearing of this petition on behalf of the petitioners learned Counsel principally contends that once the property being the property of a company which was ordered to be wound up and the petitioner No. 1 is purchaser pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the nature of the charge which the respondent Nos. 1 and 2 claimed. We are really not concerned here with a case where the property is transferred from one owner to another in the normal course. We are concerned with the effect of winding up of a company and sale of its assets and the effect of section 212 of the Act. The issue of priority of claim of State debts had come up for consideration before the Apex Court in Builder Supply Corporation v. Union of India AIR 1965 SC 1061. In that case the issue was whether the Income-tax claims of the Government of India were entitled to preference over debts of unsecured creditors. The matter again came up for consideration in Superintendent and Remembrance of Legal Affairs, Bengal v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State s priority to claim can only be if the tax has come due and payable within the period of 12 months next before the relevant date so as to sustain State s priority claim. Section 530 as we have noted earlier is in respect of unsecured creditors. 7. The next question is who is liable to pay the debts of a company before winding up, after winding up and subsequent to purchase by a party in proceedings for sale of a company in liquidation. By virtue of section 457 amongst other powers conferred on the Liquidator, is the power to sell immovable and movable properties by public auction or private contract, with power to transfer the whole thereof to any person or body corporate, or to sell the same in parcels. It would, therefore, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor took possession the business of the company was continued and even if continued the liability to pay would not be that of the petitioners, but as expenses of the Liquidator as liquidation expenses. It would, therefore, be clear that insofar as the petitioners are concerned their liability would arise only on purchase. There is no dispute overhear that the petitioners from the date of purchase have paid the bills which were served upon them. The warrant of attachment is for a period previous to the purchase of the property by the petitioner No. 1 herein. The judgment in Municipal Corporation of Delhi v. Trigon Investment and Trading (P.) Ltd. [1996] 3 SCC 630 does not deal with the issue of sale of a property in winding up and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insolvency with respect to the estates of persons adjudged insolvent would be applicable. Various other provisions give certain priority to secured creditors and other unsecured creditors, preferential payment in section 530. Therefore, the respondent No. 1 as one the creditors of the company in winding up and as a creditor it has to file a claim with the Liquidator. Once the Liquidator sells the properties from the realisation of the assets of the company to be paid to the creditors in order of preference. The respondent No. 1 is not a secured creditor, who can stand outside the winding up. The respondent No. 1 will have to file its claim before the Liquidator. It is, therefore, only the amounts realised and available with the Official Li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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