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TMI Blog2008 (2) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... EDDY AND NOOTY RAMAMOHANA RAO, JJ. J.V. Rao for the Appellant. M. Anil Kumar and D. Bhaskara Mohan for the Respondent. JUDGMENT [ORAL JUDGMENT] Nooty Ramamohana Rao, J. This is an appeal preferred by the Andhra Pradesh State Financial Corporation, a statutory corporation, which advanced certain loans to the first respondent-company in liquidation. The appellant is aggrieved by the order passed by the learned single judge in Company Application No. 1609 of 2006, dated July 3, 2007, which is essentially to the following effect : "Since claims are required to be invited by the official liquidator and it is only thereafter can such claims, including that of the appellant, be adjudicated it is appropriated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preliminary expenses towards advertisement for giving effect to the winding up order and for adjudicating various claims. The first respondent-company has been ordered to be wound up at the instance of the Board for Industrial and Financial Reconstruction (BIFR) in terms of section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985. The question as to whether a secured creditor can be construed to be a petitioner in a winding up proceeding has fallen for consideration before a Division Bench of this court Andhra Pradesh State Financial Corporation v. Southern Transformers and Electricals Ltd. [2000] 100 Comp. Cas. 794; [2000] 5 Comp LJ 144, 148 and it has been answered as under (page 798) : "9. The appellant here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the proviso to section 529(2) or by rule 292. We are, therefore, of the considered view that the decision in Board for Industrial and Financial Reconstruction v. Adivasi Paper Mills Ltd. [1999] 98 Comp Cas 283 ; [2000] 1 Comp LJ 209 ; [1999] 3 ALD 655 (AP), and also the impugned order of the learned single judge in so far as directing the payment of ad hoc sum towards preliminary expenses by a secured creditor consequent on the winding up order passed at the instance of the Board for Industrial and Financial Reconstruction, are not correctly decided and we hereby overrule the said decisions. At the same time, we make it clear that the appellant is bound to reimburse the official liquidator for the expenses incurred by him in connecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be relevant for our enquiry, rule 292 reads as under : "292. Where the company has no available assets. Where a company against which a winding up order has been made has no available assets, the official liquidator may, with the leave of the court, incur any necessary expenses in connection with the winding up out of any permanent advance or other fund provided by the Central Government, and the expenses so incurred shall be recouped out of the assets of the company in priority to the debts of the company." The very purpose of making a provision enabling the official liquidator to draw upon the permanent advance or any other fund provided by the Central Government for incurring the necessary expenses in connection with the winding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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