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TMI Blog2007 (11) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered charge and the attempt to have an unregistered charge freshly registered. Section 141 and the discretion found therein cannot be carried so far as to allow a creditor to undo the effect of section 125 by which the charge created or agreed to be created in his favour by the company can be avoided by the Official Liquidator and the other creditors of the company. It would also appear from the decisions of the English courts under the provisions of both the 1948 Act and the 1985 Act in England which are in pari materia with sections 125 and 141 of the Act of 1956 applicable in this country, that the condition ordinarily imposed for allowing subsequent registration is that it would be open to the other creditors who had entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter, the second question need not be answered if the first question is answered against the appellant. 2. The appeal has been pending for some time. There is an interim order subsisting, restraining the Official Liquidator from making disbursements pending the disposal of this appeal. Some of the workmen of the company in liquidation have brought the subsisting order in these proceedings to the notice of the Court whereupon the appeal has been taken up. Such workmen laboured under the mistaken apprehension that upon the appeal being set down for immediate hearing at their instance, they would be heard, but the workmen were not allowed to address. A.C.O. No. 166 of 2007 is dismissed without any order to costs. 3. The facts, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd offered to make payment pro rata on such count but held the appellant to be an unsecured creditor in respect of the balance claim. As is usually the case in companies that go into liquidation in this country, the proceeds from the sale of the assets of companies in liquida-tion are hardly enough to meet the claims of the secured and the preferred creditors in terms of sections 529A and 530 of the Act, so was the case here. The Official Liquidator has not disregarded the appellant s claim founded on the certificate that it obtained from the Debts Recovery Tribunal, but merely conveyed to the appellant that in the first rung of creditors entitled to receive payment on a priority basis, only such part of the appellant s claim as was cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges under section 141 of the Act?" 8. The Company Law Board answered the first issue against the appellant whereupon it was not necessary to address the second issue. 9. The one question which appears to be of utmost importance in the facts of the case is whether an application of the kind permitted under section 141 of the Act can be received after an order of winding up of the concerned company is made. Section 125 of the Act does not, in the absence of registration, make the charge or the security created or agreed to be created, void. Section 125 lists several types of charges (and by section 124 of the Act a mortgage for the purpose of the provisions is deemed to be included in the definition of a charge) that require registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon an order of winding up being made the rights of creditors crystallise. In terms of section 529A of the Act workmen get elevated to the status of secured creditors. A post facto registration of a charge would entail not only a smaller piece of the pie for the other secured creditors but also reduce the amounts that can be disbursed to the workmen out of the realised assets of the company in liquidation. To allow a creditor to climb on to the register at such stage would be akin to an insurance policy being received for an insurance against the incident upon the happening of such incident. 13. It would, however, be permissible for the rectification of a charge or the modification of the extent of a charge, at the liquidation stage b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enunciate the law and cover instances even when the company faces imminent liquidation, but none of the cases relates to a company that has already been wound up. Even in the Resinoid Mica Products Ltd. s case ( supra ), the first application was made before the company went into liquidation and the application was heard after the company had been wound up. 14. The appellant contends that since a part of the charge in its favour was registered and has been recognised by the Official Liquidator, this is a matter of rectification or enlarging the extent of the charge rather than fresh registration of a charge. But the appellant cannot be heard to make out this case, never mind that this is an appeal limited to questions of law, in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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