Secured creditors' rateable release in winding up remains subject to the statutory workmen's charge and claim verification.

Sections 529, 529A and 530 of the Companies Act, 1956 were examined on the secured creditor's right to realise security outside winding up, subject to the statutory workmen's charge in the secured assets. The workmen's portion must be determined from the claims and dues as on the date of winding up, and workmen must lodge and prove their claims before payment. However, the Official Liquidator cannot retain the full realisation indefinitely while apportionment remains pending. Where an ad hoc disbursement has already been made to workmen, fairness permits a corresponding rateable release to the secured creditor, while preserving verification of claims and satisfaction of the workmen's charge.

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Issues: Whether, pending determination of the workmen's portion in the secured assets and verification of claims in winding up, the secured creditors were entitled to release of an amount equal to the ad hoc payment ordered in favour of the workmen.

Analysis: The scheme of sections 529, 529A and 530 of the Companies Act, 1956 was examined in the light of the proviso to section 529(1), which creates a statutory charge in favour of workmen in the security held by secured creditors. The secured creditor who remains outside winding up may realise the security without first proving the debt, but the realisation is subject to the workmen's portion, which must be determined on the basis of the claims and the relative dues as on the date of winding up. Workmen cannot receive payment without lodging and proving their claims, and the Official Liquidator cannot retain the entire realisation indefinitely merely because the exact apportionment is still pending. Since the workmen had already been permitted an ad hoc disbursement, fairness required that the secured creditors be allowed a corresponding rateable release, while safeguarding the Liquidator's right to satisfy the workmen's charge and verify genuineness of claims.

Conclusion: The secured creditors were entitled to receive an amount equal to the sum disbursed to the workmen on a rateable basis, and the order was modified to that extent in favour of the appellant.

Ratio Decidendi: Realisation of secured assets outside winding up remains primarily available to the secured creditor, subject only to the statutory workmen's charge and the verification of claims, and the Liquidator cannot withhold the entire amount or deny corresponding rateable release to the secured creditor merely because apportionment has not yet been finally determined.

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