Secured creditor rights in winding up are subject to workmen's pari passu claims and Company Court supervision.

Once a winding-up order is made, a secured creditor's unilateral right to realise mortgaged assets is controlled by the pari passu rights of workmen represented by the official liquidator and the supervisory jurisdiction of the Company Court. The earlier view that the secured creditor could stand outside the winding up and independently allocate or bear sale-related expenses was no longer sustainable after the Supreme Court's ruling. Applying that principle, the order permitting reimbursement of approved sale expenses and directing adjustment from the sale proceeds was upheld, and the appeal challenging those directions failed.

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Issues: Whether the appellant was entitled to challenge the reimbursement and appropriation of sale-related expenses out of the sale proceeds after the Supreme Court had settled that a secured creditor cannot realise the mortgaged assets independently of the official liquidator in a winding-up situation.

Analysis: The appeal turned on the effect of the Supreme Court's ruling that, once a winding-up order is made, the secured creditor's right to proceed unilaterally under the special statute is controlled by the pari passu rights of workmen represented by the official liquidator and the supervisory jurisdiction of the Company Court. The earlier view that a secured creditor could stand outside the winding up and bear or allocate sale expenses on its own footing was no longer sustainable after that binding decision. In that legal setting, the Single Judge's order permitting reimbursement of the specified expenses and directing their adjustment from the sale proceeds was examined only in the light of the Supreme Court's pronouncement.

Conclusion: The challenge failed. The order allowing reimbursement of the approved sale-related expenses and confirming the sale-related directions was upheld, and the appeal was dismissed.

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