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TMI Blog2006 (5) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... ets and affairs of the company forthwith. The company in liquidation had placed an order for importing 10564 pagers from Hong Kong and South Korea. The aforesaid goods were received by the custom's authority at New Delhi on July 10, 1998. The goods were not released on account of non-payment of "customs duty". The goods have been lying with the Central Warehousing Corporation (hereinafter referred to as "the CWC") at Mohali since July 1998. A communication dated December 22, 2000, was received by the liquidator of the company in liquidation, indicating that goods worth Rs. 4,46,70,935 have been lying in the warehouse since July 1998. A sum of Rs. 3,60,784 was shown as outstanding on account of damage/rentals against the company in liquidation and it had been requested that the payment thereof be made accordingly. The liquidator addressed a communication dated January 22, 2001, to the Customs Superintendent, Central Excise Range-III, Mohali-respondent No. 2, requesting that the assets of the company, as per the provisions of law-since the company had been ordered to be wound up, had vested in the winding up court and that he having been appointed as the liquidator, is obligated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed can only be dealt with in the manner provided and prescribed under the Companies Act. Thus, the goods can be released only on payment of customs duty along with warehouse charges. The dues so recoverable can be recovered by way of selling wholly or part of the warehoused goods. The owner, i.e. , the liquidator, in the present case, has only a right to inspect and preserve the detained goods as per section 64 of the Customs Act. It is also the stand that as per section 71 of the Customs Act, the warehoused goods cannot be removed from the warehouse except on clearance as provided under the Customs Act. It is also the plea that section 530 of the Companies Act, 1956 (hereinafter referred to as "the Act") is the preference order of Government dues which are due from the company in liquidation. Reliance has been placed upon the judgment of the apex court rendered in Allahabad Bank v. Canara Bank [2000] 101 Comp. Cas. 64 ; [2000] 4 SCC 406, in support of the contention that in case of conflict between the two special laws, the later one has to prevail in terms of the principle generalia specialibus non derogant. It is the contention that this aspect has not been taken into consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m one warehouse to be housed in another warehouse. Emphasis has also been made upon section 71 of the Act which reads as under : "71. Goods not to be taken out of a warehouse except as provided by this Act. -No warehoused goods shall be taken out of a warehouse except on clearance for home consumption or re-exportation, or for removal to another warehouse, or as otherwise provided by this Act." Thus, it is amply clear that the goods would remain under the control of the Customs Department till the customs duty has been recovered. The power to recover the dues has been provided under section 142 of the Act, which reads as under: "142. Recovery of sums due to Government. -(1) Where any duty (demanded from any person or any amount of drawback to be recovered from any person) or any penalty payable by any person under this Act is not paid; ( a ) the proper officer may deduct or may require any other officer of customs to deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such officer of customs; or ( b ) the Assistant Collector of Customs may recover or may require any other officer of customs to recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the dues being Government dues, shall be determinable by the official liquidator on submission of their claim pursuance to the provisions of the Companies Act. It has also been contended that the CWC also did not initiate any proceedings for the purpose of recovery of their dues as none have been pointed out nor have been relied upon. It has been further contended that the Customs Department did not initiate any proceedings for passing any order of attachment of the goods with a purpose to sell the same for the recovery of the customs duty. The fact of the matter is that the assets of the company remained described as the ownership of the company in liquidation. It is nowhere the case of the Customs Department or the CWC that the sale price of the goods in question had not been paid and, therefore, the ownership never stood transmitted to the company in liquidation. It has been contended that de hors this once the agreement had ensued between the importer (company in liquidation) and the exporter, the rights between the parties would be determinable pursuant to the terms of the agreement. Once the goods have been received at the port and the same are in the custody of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is absolutely clear that the liquidator holds the custody of the property of the company in liquidation for and on behalf of the winding up court and, therefore, equally responsible for the protection thereof. This property/assets of the company in liquidation have to be dealt with in accordance with law till the company is finally dissolved. It maybe noticed that so far as the commencement of the winding up of the company is concerned, it shall be deemed to have commenced at the time of presentation of the petition as has been envisaged under section 441(2) of the Act. So far as the custody of the company's property is concerned, it has been specifically provided that as and when the provisional liquidator is appointed, he shall take into his custody under his control all the property, effects and actionable claims to which the company appears or is entitled to. So far as the custody of the property is concerned it has been specifically provided under section 456(2) of the Act that all the property and effects of the company shall be deemed to be in the custody of the court (Tribunal), as has been sought to be substituted by way of the Companies (Second Amendment) Act, 2002, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time or piece work and salary earned wholly or in part by way of commission) of any employee, in respect of services rendered to the company and due for a period not exceeding four months within the twelve months next before the relevant date, subject to the limit specified in sub-section (2) ; ( c )all accrued holiday remuneration becoming payable to any employee, or in the case of his death to any other person in his right, on the termination of his employment before, or by the effect of, the winding up order or resolution; ( d )unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, all amounts due, in respect of contributions payable during the twelve months next before the relevant date, by the company as the employer of any persons, under the Employees' State Insurance Act, 1948 (34 of 1948), or any other law for the time being in force; ( e )unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has, at the commencement of the winding up, under such a contract with insurers as is mentioned in sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them, and in the case of debts to which priority as given clause ( d ) of sub section (1), formal proof thereof shall not be required except in so far as may be otherwise prescribed. (7)In the event of a landlord or any other person distraining or having distrained on any goods or effects of the company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be a first charge on the goods or effect so distrained on, or the proceeds of the sale thereof: Provided that, in respect of any money paid under any such charge, the landlord or other person shall have the same rights of priority as the person to whom the payment is made ..." The perusal of the aforesaid would show that the workmen's dues and debts due to the secured creditors to the extent such debts rank, under clause ( c ) of the proviso to sub-section (1) of section 529, pari passu that such dues shall be paid in priority to all other debts. It has been directed that the aforesaid dues shall be paid in full, unless ..... X X X X Extracts X X X X X X X X Extracts X X X X
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