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TMI Blog2024 (6) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... 1882 shall stand obliterated. The report filed by the recovery officer is in tune with the order passed by this Court. The objection is accordingly rejected. Seeking release of amount for the purpose of distribution to the certificate holders in terms of recovery certificate after retaining the amount payable to the workers - HELD THAT:- It will be appropriate to direct the Official Liquidator to release Rs. 9.5 Crores in favour of the recovery officer in terms of the prayer made by him. The amount be released within fifteen working days - Application disposed off. - ANIL L. PANSARE, J. Mrs. M. R. Chandurkar, Advocate for Recovery Officer. Dr. Anjan De, Advocate for Official Liquidator Mr. M. N. Phadke, Advocate for Bank of Maharashtra Mr. S. V. Sohoni, Advocate for IFCI Bank and IDBI Bank Mr. N. A. Padhye, Advocate for Kotak Mahindra Bank/applicant in CAO No. 569/2020 and CAL No. 12/2024 Ms. D. V. Sapkal, AGP for the State Mr. S. D. Malke, Advocate for applicants in CAO Nos. 245, 246 379 of 2013 and 959/2012 ORDER Heard. 2. The Bank Of Maharashtra, one of the secured creditors, has filed objection to the report dated 06.02.2020 submitted by the Recovery Officer in pursuance to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor, submits that the Court, vide order dated 12.07.2019, has directed the Recovery Officer to only ascertain the amounts receivable by the secured creditors and the unsecured creditors. This Court has given no direction to decide priority of claim inter se between the secured creditors. He further submits that the Recovery Officer has entertained objection raised by Kotak Mahindra Bank, which was not within the scope of order. He submits that the Supreme Court, in the case of ICICI Bank supra, has held that once assets of the company are liquidated, the securities are converted into cash and all the secured creditors have equal right in the cash, which is realized on sale of assets. Thus, according to him, the Bank of Maharashtra was equally entitled for the amount available for disbursement. 9. I have gone through the order dated 12.07.2019 passed by this Court, report submitted by the Recovery Officer, the judgment passed by the Hon ble Supreme Court in the case of ICICI Bank supra as also the provisions of the Act of 1956 and the Act of 1993, to find that there is absolutely no substance in the submissions made by Mr. Phadke. 10. This Court has, in clear terms, directed the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be realized from the property belonging to the mortgagor, the first charge holder will have to be repaid first. There is no dispute as regards the said legal position. Such a valuable right, having regard to the legal position as obtaining in common law as also under the provisions of the Transfer of Property Act must be deemed to have been known to the Parliament. Thus, while enacting the Companies Act, the Parliament cannot be held to have intended to deprive the first charge holder of the said right. Such a valuable right, therefore, must be held to have been kept preserved. [See Workmen of M/s Firestone Tyre and Rubber Co. of India (P.) Ltd. vs. Management Ors. (1973) 1 SCC 813] If the Parliament while amending the provisions of the Companies Act intended to take away such a valuable right of the first charge holder, we see no reason why it could not have stated so explicitly. Deprivation of legal right existing in favour of a person cannot be presumed in construing the statute. It is in fact the other way round and thus, a contrary presumption shall have to be raised. 21. Section 529(1) (c) of the Companies Act speaks about the respective rights of the secured creditors whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assets of the companies are sold and realization has taken place, the securities of the creditors are converted from the specified assets into cash and the creditors have equal right in cash, which is realized on sale of the assets of the company. 16. Mr. Phadke has emphasized on the expression and the creditors have equal right in cash. To my mind, he has misread the aforesaid judgment because he has read the aforesaid line in isolation. The principles of law laid down by the High Court would be clear once the entire paragraph is read, which reads thus : 28. Considering the above referred legal position, the Court is of the view that the claim made by the unions in these applications with regard to their exclusive right of satisfaction of their claim out of the sale proceeds of the assets of the company in liquidation in priority of all other creditor secured as well as unsecured is not tenable. The court is also of the view that simply because the secured creditors participate in the sale proceedings undertaken by the court and they also became the members of the sale committee constituted pursuant to the directions issued by the court does not mean that they have (not) exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court is that the rights available to the secured creditors on the secured assets prior to the liquidation will be similar or equal, even after securities are liquidated. This finding, by no stretch of imagination, indicate that the priorities of claims amongst the secured creditors inter se or amongst secured creditors and unsecured creditors would be at par once the securities are liquidated. 19. The acceptance of the Supreme Court to the view taken by the Gujarat High Court will have to be understood in the light of what the Supreme Court observed in paragraphs 20 and 21 of its judgment. Mr. Phadke has thus misread the law laid by the Supreme Court. 20. His contention that since the securities in the present case were liquidated in the year 2001, all the secured creditors will have equal right in the cash available with the Official Liquidator, is devoid of merit. 21. The report filed by the recovery officer is in tune with the order passed by this Court. The objection is accordingly rejected. Civil Application (CAO) No. 1527 of 2013 22. The recovery officer has made a request to direct the Official Liquidator to release amount for the purpose of distribution to the certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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