Claim of Secured creditor in liquidation

[Vartik Choksi]

We have been appointed by office of the official liquidator to verify the claims of Secured Creditor.  In our case there are only two creditors claiming to be secured creditor one is a bank  who has first charge on the assets including land, building, machineries and all kind of stocks.  Other is a financial institution who has entered into the hire purchase agreement for the sale of machineries. 

Now we have verified that bank has filed form no. 8 & 13 and created charge with ROC.  On the other hand financial institution has not created any charge.  As I understand as per section 125 of the companies act, 1956 if the charge is not created on the assets, it will be void and not having enjoyment as secured creditor.  However I have been informed that some of the high courts are of the view that under hire purchase agreement, the lessor is considered to be Secured Creditor.  ( However I am not sure whether to rely on that.) 

Now the sale proceeds in total has taken place including land, building and machineries. 

Now my questions are as under:
1. Do financial institution is entitled get its share as secured creditor evnthogh no charge has created.

2.  If there are any decisions available please let me know.

AI Summary

Secured Creditor Status in Liquidation: Hire Purchase Agreements Under Section 125 of Companies Act 1956 A discussion on the status of secured creditors in a liquidation process features a query about the entitlement of a financial institution under a hire purchase agreement. The bank, having filed the necessary forms and created a charge with the Registrar of Companies, is recognized as a secured creditor. However, the financial institution did not create a charge, raising questions about its status. The inquirer references Section 125 of the Companies Act, 1956, and notes differing high court views on hire purchase agreements. The response suggests the issue may have been resolved and requests shared insights.