TaxTMI 
TaxTMI 
2013 (1) TMI 445
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....ompany Application No.411 of 2006 and in OJ Appeal No.152 of 2008 the order is in Company Application No.657 of 2006. The learned advocate for the appellant requested that OJ Appeal No.110 of 2008 be taken first for consideration so as to enable him bring home his contention. The learned advocate for the appellant submitted that in the matters wherein the company is in liquidation pursuant to an order passed by this Court, the debts of all the secured creditors - he explained that all the secured creditors means, secured creditors some of whom have first charge over the property whereas some of them having second charge on the property and so on - are clubbed together and their debt is put against the dues of the workmen and then the pari p....
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....se secured creditors on the basis of their holding charge being the first charge or the second charge or so on. Same is the position so far as Section 529A is concerned. In clause (b) of subsection (1) of Section 529A, the words used are, "debts due to secured creditors....... " meaning thereby the law does not draw any distinction between the secured creditors. So far as Section 529 and 529A are concerned, the word secured creditor, irrespective of the fact whether it is first charge holder on a particular property of the company in liquidation or the second charge holder, makes no difference while calculating the ratio for distribution of the amount available by applying the principle of pari passu charge. (Emphasis supplied) 3. The lear....
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....nd other Banks have already filed affidavits of proof of debt and if it is so, then they have submitted to the jurisdiction of the Official Liquidator. It is, therefore, submitted that the applicant and other Banks who are already party respondents are unsecured creditors and therefore, whatever amounts that were paid to them are required to be recovered. It is further stated in the said affidavit that the original documents/documents creating mortgage or deed of mortgage or deed of hypothecation are not available with the Banks and if the original documents are not available, then it is not admissible piece of evidence and therefore, it cannot be said that the mortgage is created or charge is created or they are secured creditors at all."(....
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....on, which will necessarily result into a higher ratio in favour of workmen and the debt amount of the secured creditors holding the second charge or so on should not be taken into consideration. The learned counsel for the appellant could not convince this Court by pointing out any reason for accepting the submissions made by the learned counsel for the appellant and for interpreting Section 529 in the manner suggested by the learned advocate. 6. The learned advocate for the appellant also relied upon a decision of this Court in the matter of O.J. Appeal No.156 of 2007 in Company Application No.489 of 2006 and other cognate matters (Coram: Hon'ble Mr Justice D.A. Mehta, as he then was, and Hon'ble Ms Justice H.N. Devani) dated 12th January....