TaxTMI 
TaxTMI 
2008 (7) TMI 584
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....fferent levels The appellant is the owner of the land to an extent of Ac. 7.14 guntas, which consists of the buildings and structures thereon, situated at Sanathnagar, Hyderabad. The said property was leased out initially to M/s. Hyderabad Allwyn by the then owners namely M/s. Alladin and Family under various registered lease deeds, some time in the year 1963. Later, M/s. Hyderabad Allwyn became a sick unit and in terms of the scheme of amalgamation approved by the BIFR M/s. Hyderabad Allwyn amalgamated with Voltas Limited, which is the appellant/applicant. M/s. Allwyn Auto Limited, which is the respondent herein was incorporated on 31-5-1993. Under the said scheme of amalgamation M/s. Hyderabad Allwyn leased out the said property to the respondent along with the said structures for a period of 5 years from 7-4-1993, and a lease agreement was executed on 28-3-1993 between appellant/applicant and M/s. Hyderabad Allwyn on one side and the State of A.P on the other. According to the terms of the lease monthly rent was fixed at Rs. 1,00,000, which has to be paid by the respondent to the applicant in advance every month on or before 10th of each calendar month. The said lease expired on....
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.... law and as long as such steps are taken finally by settling and disposing the dividend etc., the appellant cannot make any claim. It was submitted that pursuance to the notice issued by the Official Liquidator on 8-8-2004, inviting claims, he received about thirty claims from unsecured and preferential creditors of the company including the claim of the Commercial Tax Department, however, no claim was made by any secured creditor and, thus, the adjudication of the appellant's claim is under process, and it is only when the same is finalized the list of creditors would be filed before the Court and till then the disbursement of the amount in favour of the applicant required to be deferred and for that the appellant cannot make any preferential claim over others. Learned Single Judge rejected the application holding that the appellant/applicant has to wait till the adjudication of all the claims and also to the effect that the claim of the appellant for preferential payment to the exclusion of all other claims cannot be considered. 5. Sri M.S. Ramachandra Rao, learned counsel appearing for the appellant mainly contended that having regard to the nature of the claim and especially c....
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....tween 17-7-2001 to 12-12-2003, during which the property was in custody of the Official Liquidator after the order of winding up. In the report submitted before the learned Single Judge, the Official Liquidator tried to support his possession for the said period on the ground that he has to take steps in furtherance of winding up order, since the assets of the company had to be removed from the said property before the possession could be delivered. Thus, the Official Liquidator was in control and management and taking care of the said other assets of the company. With this back drop, it now necessitates to refer to the provision of section 476 of the Companies Act, under which the present claim is made, which reads as follows :- "Section 476. Power to order costs.-The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order for the payment out of the assets, of the costs, charges and expenses incurred in the winding up, in such order of priority inter se as the Court thinks just." 8. From the above, on a bare reading, it provides that in respect of costs, charges and expenses, which were incurred during the process of winding up can be o....
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....s not well-settled that the expression as used in a statutory provision should be given its plain meaning in the context in which they are found. Thus, we are of the view that having regard to the express distinct words used, which stand poles apart both under sections 476 and 529(a) of the Companies Act, the other debts as mentioned to in section 529(a) would not take in any amounts towards costs, charges and expenses in the winding up. Even coming to section 530 of the Companies Act, it has to be seen to what extent it would include such amounts towards costs, charges and expenses incurred in the winding up vis-a-vis the other debts. Section 530 of the Companies Act reads as follows :- "Section 530. Preferential Payments.-(1) In a winding up, subject to the provisions of section 529A, there shall be paid in priority to all other debts." 10. Even this provision as mentioned above, the expression used is again 'other debts' and therefore the priority as mentioned vis-a-vis the other debts like under clauses (a) to (g) thereof, would not come in any way against the claim in respect of costs, charges and expenses which are incurred in the winding up process. Certainly it goes witho....
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....nses properly incurred in preserving, realizing or getting in the properties of the company; Next - the costs of any person properly employed by the Official Liquidator; Next - the fees to be credited to Government under section 451(2); Next - the actual out of pocket expenses necessarily incurred by the members of the Committee of inspection, and sanctioned by the Court. (2) Save as otherwise ordered by the Court, no payments in respect of bills of advocates, shall be allowed out of the assets of the company without proof that the same have been considered and allowed by the taxing officer of the Court. The taxing officer shall before passing the Bills of charges of an advocate, satisfy himself that the appointment of an advocate to assist the liquidator in the performance of his duties has been duly sanctioned. (3) Nothing contained in the Rule shall apply to or affect costs which, in the course of legal proceedings by or against the company which is being wound-up by the Court, are ordered by the Court in which such proceedings are pending, to be paid by the company or the liquidator, or the rights of the persons to whom such costs are payable." 11. From the above, especia....
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....tances, it was held that the rent accrued due is that which ought to be proved for and the rent which cannot be proved for is that which ought to be paid in full. In the second judgment it was a case of payment of rates. A resolution was passed by the company for voluntary winding up on the 20-12-1882. The Liquidator appointed remained in the occupation of the business premises of the company for the purpose of carrying out some pending contracts, finishing a quantity of unfinished articles, and storing and keeping in order a quantity of completed articles with a view to selling them. In March, 1883, a rating authority of Corporation of Birmingham under the provisions of the local Acts made a rate for 1883 on all the property within the district. Obviously, the Liquidator was in possession of the property. Under those circumstances, it was held that as the Liquidator had from the commencement of the winding up occupied the property for the purposes of the company and with a view to acquiring gain or avoiding loss to the company, the rate ought to be paid in full. Obviously, this is a case of payment of rate (tax to the corporation). The third judgment sought to be relied upon by ....