9911796707
TMI Blog2006 (7) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... the judges' summons to the applicant since the property is vested in the Central Government with effect from October 30, 1999, by virtue of section 126 of the Customs Act, 1962. It is inter alia , prayed that pending hearing and final disposal of this application, a direction be issued to the respondent not to sell, transfer, assign or, in any manner, dispose of the above properties and further prayer to award appropriate damages to the applicant for having taken possession of the above property, unauthorisedly. An affidavit filed in support of judges' summons dated April 15, 2005, reveals that an order dated February 11, 2004, was passed in Company Petition No. 152 of 1995 by which M/s. GIL Hospitals Ltd. (now known as Mayo Hospital) came to be wound up and the official liquidator was directed to take charge of all the properties and assets of the said company. It is averred that by virtue of the aforesaid order, the official liquidator has taken over all the assets of the company (in liquidation) including 13 medical equipments, which came to be vested in the Central Government with effect from October 30, 1999, by virtue of the order passed by the Commissioner of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed his report on January 6, 2006 and it is submitted that Company Petition No. 152 of 1995 filed against GIL Hospitals came to be admitted and advertised as per the order dated November 17, 1998, passed by this court and by an order dated February 16, 1999, this court had appointed the official liquidator as provisional liquidator of the company with directions to prepare inventory of all the assets and properties of the company and to take charge thereof. Since the company was managing the hospital and it was in a working condition, this court thought it fit to direct the official liquidator to hand over possession of the hospital to the managing director of the company, as an agent of the official liquidator, with a liberty to the managing director to work out a viable and proper scheme and submit a proposal, to revive the company, to the court. In view of the above order, after taking over possession of the assets and properties of the company and after preparing inventory thereof, the official liquidator handed over possession of the hospital to the managing director of the company as an agent of the official liquidator. Thus, by virtue of appointment as a provisional liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of winding up orders and it bars continuation of the same even without the permission of the court after the winding up order is passed. Therefore, according to the applicant, section 446(1) does not prohibit continuation of pending proceedings for which any permission of the company court is required. It is further contended that it was the duty of the provisional liquidator and his agent to appear in the adjudicatory proceedings pending before the customs authority, in view of the show-cause notice dated January 27, 1998, issued upon the company. Another contention raised in the said rejoinder is with regard to provisions of section 457 and it is submitted that the official liquidator can only sell those properties which belong to the company and by virtue of section 126 of the Customs Act, 13 medical equipments came to be vested in the Central Government. By virtue of order dated October 30, 1999, the Central Government has become owner and, therefore, the case of the applicant deserves consideration and the same may be allowed. I have heard learned advocates appearing for the respective parties. Learned advocate Shri Mrugesh Jani appearing for the official liquidato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal proceedings were pending since the order of confiscation was already passed on October 30, 1999. He has further submitted that the official liquidator can take possession of such properties only which are in existence on the date on which the order for winding up of the company is passed. In support of his argument he has relied on the decision of the Kerala High Court in the case of A.M. Padmakshi v. Sudarsan Chits ( India ) Ltd. [1987] 62 Comp Cas 637 , where it is held that when no winding up order is passed and the provisional liquidator is appointed, no permission under sub-section (1) of section 446 is necessary. Shri Amin, learned advocate appearing for the applicant has submitted that since the applicant had no knowledge about the appointment of provisional liquidator on earlier occasion, no application was filed before this court and even in the adjudicatory proceedings issued by the customs authority neither the provisional liquidator nor his agent has apprised the fact of pendency of winding up proceedings before the company court. He has further submitted that even the appeal preferred before the CEGAT against the order dated October 30, 1999, by the mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it can be decided, after lodging a claim under section 530 of the Companies Act. It appears from the record that the customs authority the applicant herein has already preferred a claim on January 22, 2002, under section 530 of the Companies Act, 1956 and the official liquidator was requested to take cognizance of the claim of the Department in terms of the above section for recovery of duty demand of Rs. 4 crores. The above fact is reflected in paragraph 5 of the letter dated January 22, 2002, produced at annexure "D" to the application. Thus, it is clear that the Department has already forwarded its claim under section 530 of the Companies Act and the prayers made in the present application are an afterthought. A perusal of the record and particularly, the order dated February 11, 2004, by which the company was ordered to be wound up produced at annexure "E" to the petition, reveal that the order of admission of company petition was made on November 17, 1998 and advertisement came to be published immediately. The show-cause notice issued by the applicant-authority is dated January 27, 1998 and, thus, it was made known to all concerned about admission of the winding up petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 446 is concerned, no plea is raised and, therefore, the same is not required to be dealt with. It is otherwise also clear that as per sub-section (3) of section 450 of the Companies Act, 1956, wherever the provisional liquidator is appointed by the court, and if the powers are not limited or restricted by the concerned court, such provisional liquidator shall have same powers as a liquidator and powers of the liquidator enumerated in section 457 are very wide and even section 456 also dearly states that where a provisional liquidator has been appointed, the custody of the property and assets and other actionable claims to which the company is entitled, can be taken up by the pro- \ visional liquidator. Sub-section (2) of section 456 is about all the property and assets of the company which shall be deemed to be in the custody of the court from the date of the order for the winding up of the company. Thus, the custody taken over by the official liquidator in the capacity of the provisional liquidator right from February 16, 1999, has continued to remain with him till the date of order of winding up, i.e. , February 11, 2004 and thereafter, continued to remain in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk v. Bhikhabhai Prabhudas Parekh Co. [2000] 120 STC 610, 636 ; [2000] 5 SCC 694, 703; [2001] 107 Comp Cas 157,163; [2001] 247 ITR 165, 171 where the apex court, in paragraph 10, has observed as under : "However, the Crown's preferential right to recovery of debts over other creditors is confined to ordinary or unsecured creditors. The common law of England or the principles of equity and good conscience (as applicable to India) do not accord the Crown a preferential right for recovery of its debts over a mortgagee or pledgee of goods or a secured creditor. It is only in cases where the Crown's right and that of the subject meet at one and the same time that the Crown is in general preferred. Where the right of the subject is complete and perfect before that of the King commences, the rule does not apply, for there is no point of time at which the two rights are at conflict nor can there be a question which of the two ought to prevail in a case where one, that of the subject has prevailed already. In Giles v. Graver [1832] 131 ER 563, it has been held that the Crown has no precedence over a pledgee of goods. In Bank of Bihar v. State of Bihar [1971] 41 Comp Cas 591 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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