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TMI Blog2019 (8) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... perty in question is concerned, the proviso to Section 529(2) of the Act is clear in this regard that if the secured creditor proceeds to realise security, it shall be liable to pay his portion of expenses incurred by the liquidator for preservation of security. In the present case, even if one were to consider that the Appellant could not have proceeded to realise the security till it actually got possession of the property in question i.e. from the date it was ordered to be de-sealed by the DRT i.e. 12th October 2017, certainly the obligation to preserve the property thereafter was that of the Appellant. The Appellant will be handed over possession of the property in question by the OL subject to the Appellant - Appeal disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate in the sum of ₹ 2,21,76,169/- and further interest was passed against EPPL and in favour of the Appellant. 3. The Appellant managed to sell one of the two mortgaged properties and after recovering those sale proceeds, the outstanding amount due to the Appellant as on 27th February 2019 was ₹ 4,68,71,925.85 with further interest charges etc. The Appellant states that during the pendency of the recovery proceedings, it was noticed that the property in question i.e. A2/225, Site B, Surajpur Industrial Area, Greater Noida, U.P. had been sealed by the Commercial Tax Department (CTD) of the State of Uttar Pradesh. Accordingly the Appellant filed an application before DRT for de-sealing of the premises. 4. By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow that the property had been sealed by the by the CTD. Her submission is that since the Appellant made no effort to protect the property in question, the OL should not be made to bear the liability for providing security to the property. She refers to the provisos under Sections 529(1) and 529(2) of the Companies Act, 1956. She also relies on the decision in Pegasus Assets Reconstruction v. M/s. Haryana Concast Ltd. (2016) 4 SCC 47. 7. In the present case, the Court finds that the Appellant was before the DRT seeking to recover its dues. Admittedly, the property in question was sealed by the CTD and the orders passed by the DRT ordering the de-sealing of the property at the instance of the Appellant have been placed on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naware of the fact that in the proceedings before the learned Company Judge, the OL had in fact been directed to take over possession of the property in question. 10. Sections 529(1) and 529(2) of the Act with the respective provisos read as under: 529. Application of insolvency rules in winding up of insolvent companies. (1) In the winding up of an insolvent company, the same rules shall prevail and be observed with regard to- (a) debts provable; (b) the valuation of annuities and future and contingent liabilities; and (c) the respective rights of secured and unsecured creditors; as are in force for the time being under the law of insolvency with respect to the estates of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty before its realization by the secured creditor. Explanation : For the purposes of this proviso, the portion of expenses incurred by the liquidator for the preservation of a security which the secured creditor shall be liable to pay shall be the whole of the expenses less amount which bears to such expenses the same proportion as the workmen's portion in relation to the security bears to the value of the security. 11. It is plain that in terms of the proviso to Section 529(1), the security of every secured creditor is deemed to be subject to a pari passu charge in favour of the workman to the extent of the workman s dues. Consequently, the impugned order of the learned Single Judge requiring the Appellant to u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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