1978 (3) TMI 171

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....elate to a company by name "Sitharam Spinning and Weaving Mills Ltd.", Trichur, which was ordered to be wound up by the District Court, Trichur, on January 4, 1954. Two questions were raised before that court by the official liquidator, and both of them related to the disposal of the sale proceeds of the mills, which was sold in public auction and purchased by the Government of Kerala for a total sum of Rs. 23,50,010. Towards the said amount of sale consideration the Government of Kerala had deposited in the District Court a sum of Rs. 5,17,500.50 and filed an undertaking regarding the balance amount as directed by that court. The workmen of the company had preferred claims before the liquidator in respect of amounts due to them by way of w....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed by the earlier order passed by the District Court on 11th August, 1962, are liable to be disbursed on priority basis, in view of the provision contained in section 230 of the Companies Act. Both the aforesaid findings entered by the court below have been challenged by the appellant in this appeal. On the first point as to the entitlement of the State Government to be treated as a secured creditor standing outside the winding-up, we have no hesitation whatever to uphold the finding of the lower court that the said contention cannot be upheld in view of the fact that the mortgage on which the State Government relies is one executed in its favour by the liquidator during the winding-up proceedings. There is, however, some force in the....