TaxTMI 
TaxTMI 
TaxTMI 
1995 (12) TMI 308
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....ndent-company in the High Court of Judicature at Bombay for realisation of amounts due to the applicant. 2.To grant leave under section 453 of the Act for appointment of court receiver, the High Court of Bombay, for the mortgaged and hypothecated properties of the respondent-company. 3.To grant leave under section 537 of the Act for recovery of its dues by sale of the movable and immovable properties of the respondent- company charged in favour of the applicant as security for repayment of such dues and for enforcement of execution and distress proceedings as directed by the Bombay High Court. The relevant facts in brief as set out in this application are that the applicant-bank granted term loans aggregating to Rs. 1,40,00,000 (rupees o....
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....ssed by the appellate authority. The present application was filed, thereafter, by the applicant-bank for the reliefs mentioned above. The official liquidator has filed a counter-affidavit to this application. A rejoinder affidavit has been filed by the applicant to the said counter-affidavit. I have heard Sri R.P. Agarwal, learned counsel for the applicant-bank, the official liquidator. It has been contended by Sri Agarwal that as the applicant-bank is a secured creditor, it is entitled to pursue its remedies for enforcement of the mortgaged security as a matter of right by remaining outside the winding up proceedings. It has been further contended that the applicant is also entitled to obtain leave of the court for an order for appointme....
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....t the applicant-bank was a secured creditor. The Supreme Court in the case of M.K. Ranganathan v. Government of Madras [1955] 25 Comp Cas 344 has held that if a secured creditor files a suit for the realisation of a security, he is bound to obtain leave of the winding up court as provided in the Act, "although such leave would almost automatically be granted". It is noteworthy that the official liquidator has not objected to the grant of leave for filing of the suit by the applicant-bank but has contended that it should be transferred to the winding up court under section 446(3) of the Act which lays down that any suit or proceeding against the company which is pending in any court other than the winding up court notwithstanding any other l....
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.... agree. It is well-settled that the court is not bereft of power to incorporate any terms while granting such leave and it is explicitly made clear by the phraseology "subject to such terms as the court may impose" incorporated in sub-section (1) of section 446 of the Act. The official liquidator has to safeguard the interest of the general body of creditors, contributors and workmen affected by the liquidation proceedings. For that reason, he will have to contest the proceedings of the suit before the Bombay High Court on behalf of the company and require funds for the said purpose. Presently he has no funds of the company in his hands. The condition, therefore, imposed by the court directing the applicant-bank to deposit a sum of Rs. 15,0....
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....e, be neither expedient nor proper to grant leave for appointment of a receiver under section 453 of the Act as prayed by the applicant-bank. The official liquidator shall also safeguard and protect the rights of the creditors including the applicant-bank. Similarly, the prayer for grant of leave under section 537 of the Act for recovery of the dues of the applicant-bank by sale of the assets of the respondent-company, cannot be granted at this stage. It has been laid down by the Supreme Court in the case of Bansidhar Shankar Lal v. Mohd. Ibrahim [1971] 41 Comp Cas 21 that the assets of the company ordered to be wound up by the court shall be administered for the benefit of all the creditors, and that some creditors only shall not obtain an....