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TMI Blog2009 (1) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking before this Court that the SICOM will subject itself to such directions that may be given by this Court including to bring back the proportionate amount which is required to be disbursed to the workers or any other claim which is covered by sections 529 and 529A of the Companies Act, to be treated as pari passu charge equally with the rights of the SICOM being secured creditors. The Official Liquidator is, therefore, directed to invite claims from the workers and creditors and on adjudicating the claims so received if he finds that any amount is payable to any other person covered by sections 529 and 529A to receive the payment on pari passu basis equally with the rights of the SICOM being the secured creditor, may record that finding and call upon the SICOM to bring back such amount to facilitate the disbursement thereof, in favour of eligible persons. To enable the Official Liquidator to invite the claims, the SICOM for the time being, shall deposit sum of ₹ 50,000 with the Official Liquidator within four weeks from today. This direction is necessitated as no funds are available with the Official Liquidator in respect of the Company in liquidation. The SICOM shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und interest as mentioned therein. By and under the said mortgage the Company, inter alia, agreed that in the event of the Company committing default in payment of any instalment of the said term loan of Rs. 72 lakhs or any part thereof or of the interest thereon on their respective due dates as mentioned in the said mortgage, the vendor has power to take over the possession of the mortgaged premises and to sell, transfer, assign, deal with and dispose of the same and to appropriate the sale proceeds towards the outstanding amount of the said loan. The company defaulted in payment of instalment of the principal amount of the said term loan as well as interest and failed and neglected to pay the same to the vendor in spite of repeated requests made by the vendor to the company. 4. The SICOM is established by the Government of Maharashtra for financing of Industrial concerns and is a deemed Financial Corporation within the meaning of section 46 of the State Financial Corporation Act, 1951 by virtue of Notification dated 11-12-1986 issued by the Government of India. Accordingly, under section 29 of the State Financial Corporation Act, the SICOM is empowered to take over the poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that there is a settled law that the secured creditor exercising powers under the State Financial Corporation Act can stay outside the winding up proceeding and initiate the proceeding to recover its dues by taking recourse available to it under the said Act. The SICOM was, thus, clearly entitled to winding up proceeding and was entitled to its remedy of foreclosure of the mortgage and to recover its dues. 7. On notice being served Mr. Nitin Mehta, learned advocate appears on behalf of the Official Liquidator and a report is filed on 8-10-2008 wherein it is submitted that vide BIFR opinion dated 25-4-1990 in BIFR Case No. 83 of 1988 M/s. Kay Packaging (P.) Ltd., was ordered to be wound up. The Company has filed Appeal against said opinion of BIFR which was registered before the Appellate Authority being Appeal No. 33 of 1990. The said Appeal after proper hearing was dismissed by the Appellate Authority vide order dated 28-7-1993 and communication in accordance with BIFR opinion dated 25-4-1990 was forwarded to Registrar of High Court of Bombay vide letter dated 12-8-1993. On the basis of BIFR opinion, Company Petition No. 401 of 1990 was registered by the Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n SICOM. On notice being served, Mr. Sanjay Mehta, learned advocate appeared on behalf of SICOM and an affidavit is filed by one Mr. Vinod C. Deo, Manager (Legal) of SICOM. Mr. Mehta has submitted that in exercise of its powers conferred upon it under the provisions of State Financial Corporation Act, 1951, SICOM issued a takeover notice dated 2-3-1990 calling upon the defaulting company M/s. Kay Packaging (P.) Ltd. to pay the amounts found due and payable by the company to SICOM, failing which SICOM expressed its intention to proceed in accordance with the provisions of law and take-over possession of mortgaged assets. Since the Company failed to act as per the requisites of the said notice, SICOM took over the possession of the assets of Company on 9-3-1990. He has further submitted that by an order dated 22-2-1990 passed in Case No. 83/1988, BIFR permitted SICOM to enforce its statutory rights by invoking section 29 of State Financial Corporation Act for recovery of its dues and pursuant to the same SICOM auctioned the properties of the said Company. The said auction had taken place pursuant to the permission granted by BIFR and the possession of land and building sold was hande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such transaction. In support of this submission he relied on the decision of Inter Modal Transport Technology Systems (Karnataka) Ltd. (In Liquidation) v. Board for Industrial Financial Reconstruction [2002] 1 Comp. LJ 121 (Kar.) wherein it is held that having regard to the provision for relating back contained in section 441(2) of the Companies Act, 1956, the words commencement of the winding up occurring in section 537(1) of that Act refers to the time of presentation of the petition for winding up and not the date of order of winding up, where the winding up order is passed under section 433 of the Companies Act. The intention of relating back the winding up of a company to the date of presentation of the petition for winding up - is to avoid dispositions of the property, made after presentation of the petition for winding up. Therefore, when an order of winding up is made, even though the actual process of winding up starts from the date of the order, the winding up of the company is deemed to commence from the date of filing of the petition for winding up. But such relation back to the commencement of winding up of the company to the date of filing of the petition f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of International Coach Builders Ltd. v. Karnataka State Financial Corporation [2003] 10 SCC 482 to contend that it is always open to the secured creditors such as the SICOM to opt to proceed in exercise of power under the provisions of the State Financial Corporation Act to secure its dues. The contention of Mr. Parikh that as and when winding up order is passed by the Company Judge, the liability of the secured creditor, who has invoked such remedy, will have to be considered only with reference to provisions of sections 529 and 529A of the Companies Act. In other words, the SICOM will not be entitled to resist the claim of the workers as well as tax dues and such other dues recognized by sections 529 and 529A of the Companies Act are to be considered as pari passu charge. 14. Considering the above submissions of the parties and the relevant statutory provisions as well as decided case law on the subject this Court is of the view that the properties in question were transferred by the SICOM long back. No winding up order was passed at that point of time. It is true that the winding up proceedings were already commenced. Whether they were before Bombay High Court or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sale of the properties is subject to the provisions contained in sections 529 and 529A of the Companies Act. It is the say of the applicant that there is no claim of the workers. However, the claims of the workers have not been invited. The submission of Mr. Parikh that sections 529 and 529A applies only after the winding up order is passed by the Court. However, once the winding up order is passed it relates back to the date of commencement of the proceeding and if any amount is realized by the secured creditor on sale of the assets of the Company in liquidation, after presentation of the winding up petition, it is always subject to the claim of the workers under section 529A of the Companies Act. The SICOM in the present case is, therefore, certainly liable to part with the amount if required for satisfaction of the claims of the workers under section 529A of the Companies Act, 1956. 17. Accordingly, the SICOM is hereby directed to file an undertaking before this Court that the SICOM will subject itself to such directions that may be given by this Court including to bring back the proportionate amount which is required to be disbursed to the workers or any other claim which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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