TaxTMI 
TaxTMI 
2006 (9) TMI 283
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....4. In the pending company proceeding being C.A. No. 165 of 2001, Appellant filed an application seeking leave to proceed with the sale of the properties, which was objected to, inter alia, on the premise that the charge in respect of the alleged debt was not registered with the Registrar of Companies and, thus, it was an unsecured creditor. A Counter Affidavit thereto was filed by respondent. A prayer was also made by the Official Liquidator for a direction upon appellant to surrender the original documents. The application for leave to proceed with the revenue recovery proceeding was rejected by a learned Single Judge of the High Court by its order dated 28-11-2003. 5. An appeal thereagainst being Company Appeal No. 14 of 2004 preferred by appellant was dismissed by a Division Bench of the High Court. Appellant is, thus, before us. 6. The contentions raised in support of the appeal are : "(i)In view of the fact that an order of attachment was passed by the Revenue Recovery Officer, the provisions of section 125 of the Companies Act, 1956 were not attracted; (ii)The provisions of the Kerala Revenue Recovery Act being a special statute, the same shall prevail over the Co....
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....is property, or (b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court. The sole object behind the order levying attachment before judgment is to give an assurance to the plaintiff that his decree if made would be satisfied. It is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree. The provision in section 64 of the Code of Civil Procedure provides that where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment. What is claimed enforceable is the claim for which the decree is made. . . ." ( p. 1006) 13. Save and except certain special statutes in relation to recovery of debts from the properties of a company which has been directed to be wound up, the provisions of the Companies Act shall apply. An order of attachment made prior to passing of an order of winding up may not be void, but then the executio....
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....the State Financial Corporations Act has overriding effect over the provisions of section 125 of the Companies Act. It was held : ". . . Section 46B, no doubt, provides that the provisions of the State Financial Corporations Act shall have effect notwithstanding anything contained in any other law for the time being in force. An order for realization of the amount due to the Financial Corporation by sale of the assets of the Company amounts to a charged decree. The assets attached and ordered to be sold constitute the security for the amount due to the Corporation. But section 125 of the Companies Act declares that the charge so created by the company will be invalid as against the liquidator and any creditor if it is not registered with the Registrar of Companies. This is inconsistent with the provisions of State Financial Corporations Act and therefore under section 46B of the latter Act which is a special Act the legal effect of the order passed will be binding on the Liquidator of the company also. This is further clear by sub-section (10) of section 32 of the State Financial Corporations Act. . . ." It was further observed : ". . . Section 125 applies to every charge ....
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....pn. v. Official Liquidator [2005] 8 SCC 190 wherein it was stated : "18. In the light of the discussion as above, we think it proper to sum up the legal position thus : (i )A Debts Recovery Tribunal acting under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 would be entitled to order the sale and to sell the properties of the debtor, even if a company-in-liquidation, through its Recovery Officer but only after notice to the Official Liquidator or the Liquidator appointed by the Company Court and after hearing him. (ii)A District Court entertaining an application under section 31 of the SFC Act will have the power to order sale of the assets of a borrower company-in-liquidation, but only after notice to the Official Liquidator or the Liquidator appointed by the Company Court and after hearing him. (iii)If a financial corporation acting under section 29 of the SFC Act seeks to sell or otherwise transfer the assets of a debtor company-in-liquidation, the said power could be exercised by it only after obtaining the appropriate permission from the Company Court and acting in terms of the directions issued by that court as regards associating the Off....