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TMI Blog2010 (3) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... O.540 OF 2002 IN C.P.NO.476 OF 1993 WITH C.A.NO.278 OF 2002 IN C.P.NO.492 OF 1992 WITH C.A.No.101 OF 2002 IN C.P.NO.976 OF 1998 ig WITH C.A.NO.492 OF 2002 IN C.P.NO.1145 OF 2000 WITH C.A.NO.135 OF 2002 IN C.P.NO.348 OF 1993 WITH C.A.NO.347 OF 2001 IN C.P.NO.669 OF 1998 AND C.A.NO.264 OF 2003 IN C.P.NO.521 OF 1992 2. Though, it is a common order, the order which is challenged in these two Appeals was made in Company Application No. 540 of 2002 and Company Application No.101 of 2002. Both these Applications were filed by the State of Maharashtra for recovery of the amounts which were due to it from the company under liquidation under the Sales Tax Act. The claim of the State Government was that the State Government is entitled to recover the amount in question in preference to the claim of any other creditor including the secured creditors and workers. It appears that, thereafter, at the hearing the relief sought was modified and it was claimed that the Court should direct that the State Government is entitled to recover its dues as secured creditors pari-pasu with the secured creditors and workers. The learned single Judge has granted that application of the State Government. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, are paramount charge on a property. The learned Counsel pointed out that the judgment of the Division Bench in Thane Janata Sahakari Bank Ltd., has been considered and approved by the Supreme Court in its judgment in the case of Central Bank of India, referred to above. 6. It is common ground before us, as observed above, that both the Appellants are covered by the provisions of Section 529-A & Section 530 of the Companies Act. Section 529-A & Section 530 of the Companies Act reads as under:- 529-A payment.- Overriding preferential Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company- (a) workmen s dues; and (b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts. (2) The debts payable under clause (a) and clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions. 530. Preferential payments.- (1) In a winding up 1[subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Official Gazette]. 4[***] (3) Where any compensation under the Workmen's Compensation Act, 1923 (8 of 1923), is a weekly payment, the amount due in respect thereof shall, for the purposes of clause (e) of sub-section (1), be taken to be the amount of the lump sum for which the weekly payment could, if redeemable, the be redeemed if the employer made an application for that purpose under said Act. (4) Where any payment has been made to any employee of a company- (i) on account of wages or salary; or (ii) to him, or in the case of his death, to any other person in his right, on account of accrued holiday remuneration, out of money advanced by some person for that purpose, the person by whom the money was advanced shall, in a winding up, have a right of priority in respect of the money so advanced and paid, up to the amount by which the sum in respect of which the employee or other person in his right would have been entitled to priority in the winding up has been diminished by reason of the payment having been made. (5) The foregoing debts shall- (a) rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily before that date; and (ii) in any case where sub-clause (i) does not apply, the date of the passing of the resolution for the voluntary winding up of the company. (9) This section shall not apply in the case of a winding up where the date referred to in sub-section (5) of section 230 of the Indian Companies Act, 1913 (7 of 1913), occurred before the commencement of this Act, and in such a case, the provisions relating to preferential payments which would have applied if this Act had not been passed, shall be deemed to remain in full force. 7. Perusal of the above quoted provisions of the Companies Act shows that a debt due to the secured creditors is entitled to be paid on priority basis. Perusal of Section 530 of the Companies Act shows that so far as payment on account of revenue and taxes is concerned, it is subject to the provisions of Section 529-A of the Act and therefore, combined reading of Section 529-A and Section 530 will make it clear that the Companies Act contains provisions which give priority to the dues of the secured creditors to whom the provisions of Section 529A are applicable over the revenue demand. In this behalf we have to see the provisions of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the provisions of Section 169 of the Maharashtra Land Revenue Code makes the position absolutely clear. Section 169 of the Maharashtra Land Revenue Code reads as under: 169. Claims of State Government to have precedence over all others:- (1) The arrears of land revenue due on account of land shall be a paramount charge on the land and on every part thereof and shall have precedence over any other debt, demand or claim whatsoever, whether in respect of mortgage judgment- decree, execution or attachment, or otherwise howsoever, against any land or the holder thereof. (2) the claim of the State Government to any monies other than arrears of land revenue, but recoverable as a revenue demand under the provisions of this Chapter, shall have priority over all unsecured claims against any land or holder thereof. 10. Perusal ig of the above quoted provisions shows that the Maharashtra Land Revenue Code makes a clear distinction between the sum which is recoverable as a land revenue and sum which is recoverable as arrears of land revenue. What creates paramount charge is the sum which is the amount of land revenue and not the sum which is recoverable as land revenue. The Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes paramount charge. The Division Bench in this case was not considering the case, where Section 38C does not operate. So far as the judgment of the Supreme Court in Central Bank of India is concerned, there also the Supreme Court was considering the provisions of the Securitisation Act vis-a- vis the provisions of Section 38C of the Bombay Sales Tax Act and other paramateria provisions. In our opinion, paragraph 148 of that judgment makes the position clear. 148. After decree of the suit, the appellant along with IFCI and IDBI filed an application before the Company Judge for consideration of their claim on pro rata basis and also for exclusion of the claim of Punjab National Bank. The learned Company Judge allowed the first prayer of the appellant but declined the second one by relying upon the judgment in Allahabad Bank's case (supra). The intra-court appeal was dismissed by the Division Bench by relying upon the provisions of Section 529A. On further appeal, this Court referred to the judgment in Allahabad Bank's case (supra) as also Rajasthan State Financial Corporation v. Official Liquidator [(2005) 8 SCC 190] and held: "32. Allahabad Bank therefore, is not an a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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