TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1075
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....reunder:- FACTUAL BACKGROUND OF THE CASE:- 3. The Petitioner has purchased the property in an auction conducted by the Liquidator appointed by the National Company Law Tribunal (NCLT) on 24.10.2024, during the course of liquidation of the 3rd Respondent company. The 3rd Respondent is represented by its Liquidator, namely Mr.S.R.Shiraam Shekher. The 3rd Respondent issued a Submission of Claims on 23.01.2025. 4. The 3rd Respondent company was ordered to be liquidated by the National Company Law Tribunal, Single Bench, Chennai, vide order dated 14.06.2019, in a petition filed by M/s.Foseco India Limited, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'Code'), read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 5. Earlier by an order dated 03.12.2018, Mr.Ramasamy Shanmugam was appointed as an Interim Resolution Professional by the National Company Law Tribunal. 6. After Mr.Ramasamy Shanmugam was appointed on 03.12.2018 as an Interim Resolution Professional (IRP), took over the management of the Corporate Debtor, namely RLS Alloys Pvt Ltd/3rd Respondent (....
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....oard of Directors, Key Managerial Personnel and the Partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested with the Company Liquidator viz., Mr. Ramasamy Shanmuggam. VIII. The personnel of the Corporate Debtor shall extend all assistance and co-operation to the Liquidator as may be required by him in managing the affairs of the Corporate Debtor. IX. The Company Liquidator shall be entitled to charge such fees for the conduct of the liquidation proceedings and in such a proportion to the value of the liquidation estate assets as specified under Regulation 4 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. X. Copy of this Order shall be sent to the concerned Registrar of Companies, RD, OL, and Registered Office of the Corporate Debtor by the Company Liquidator viz., Mr.Ramasamy Shanmuggam for information and compliance. 10. In terms of the above, MA/559/2019 filed in CP/661/IB/2017 by the Resolution Professional under Section 33 (2) of the I&B Code, 2016, for initiation of the Liquidation Proceedings against the Corporate Debtor viz., 1/s.RLS Alloys Private Limited, stands allowed." 11. In this....
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....e time given. It appears that Applicant is not interested in the prosecution of this application. The application in IA/372(CHE)/2022 IN MA/559/2019 is dismissed in default and for non-prosecution." 18. Thereafter, the 1st Respondent, Assistant Commissioner, Srirangam GST Circle, filed another application in I.A.No.01/2025 in IA/372(CHE)/2022 in MA/559/2019 on 07.12.2024 before the NCLT seeking condonation of delay in filing an application for restoration of the earlier application that was dismissed on 08.01.2024. However, the NCLT, by its order dated 07.02.2025, dismissed the said application with the following observations: "As seen from the application, the Applicant came to know of the order immediately but this application has been filed on 07.12.2024 i.e., after about eleven months though it should have been filed within 30 days from the dismissal of the application. Admittedly, this application relates to tax claim and for the State Exchequer but it is expected from the parties to be vigilant and diligent while making and pursuing the application. Strangely, even restoration application has been filed with a delay of 304 days." 19. On 10.07.2023, Mr.S.R.Shriraam She....
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....ion. The action of the 1st Respondent in disregarding the provisions of the Insolvency and Bankruptcy Code, 2016, by not lifting the attachment on the subject properties, amounts to manifest arbitrariness and is violative of Article 14 of the Constitution of India. 27. It is further submitted that the Insolvency and Bankruptcy Code, 2016 is a special statute, and by virtue of the non-obstante clause under Section 238 of the Insolvency and Bankruptcy Code, 2016, its provisions shall have an overriding effect in cases of inconsistency with any other law, including the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956. 28. Arguing on behalf of the Petitioner, the learned Senior Counsel would draw the attention of this Court to the following decisions: i. Paschimanchal Vidyut Vitran Nigam Limited v. Raman Ispat Private Limited and others, reported in (2023) 10 SCC 60. ii. KRBL Ltd. v. State of Gujarat, reported in [2023] 154 taxmann.com 489 (Gujarat). iii. Su-Kam Power System Ltd. and another v. State of Himachal Pradesh and others, reported in [2025] 253 Comp Cas 511 (HP). 29. It is further submitted that further appeal before the NCLT under Section 61(....
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....tion of the CIRP proceedings on 03.12.2018, under Sections 42 and 49 of the Tamil Nadu Value Added Tax Act, 2006, for recovery of tax dues amounting to Rs. 2,11,54,636/- for the Assessment Years 2007-2008 to 2014-2015, which takes priority in law, as held in multiple precedents. These statutory provisions continue to apply by virtue of Section 142(8)(a) of the CGST Act, 2017. Therefore, it is prayed for dismissal of this Writ Petition. 34. The learned Additional Government Pleader appearing for the 1st and 2nd Respondent relied on the following judgments: i. Sanjay Kumar Agarwal vs. State Tax Officer (1) and another, reported in (2024) 2 SCC 362. ii. State Tax Officer vs. Rainbow Papers Limited, reported in (2023) 9 SCC 545. iii. Ghanashyam Mishra and Sons Private Limited through the authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director and others, reported in (2021) 9 SCC 657. DISCUSSION:- 35. I have considered the arguments advanced by the learned Senior Counsel for the Petitioner, the learned Additional Government Pleader for the 1st and 2nd Respondents and the learned counsel for the 3rd Respondent. BRIEF FACTS OF THE CASE:- 36.....
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.... (b) of sub-section (1). 42. It is in this background, the Interim Resolution Professional (IRP) appointed vide order dated 03.12.2018 in CP/661/(IB)/CB/2017, who was subsequently designated as the Resolution Professional (RP) in the first meeting of the Committee of Creditors (CoC) held on 18.01.2019 was appointed as the Liquidator by NCLT vide its Order dated 14.06.2019 in MA/559/2019 filed in CP/661/IB/2017. 43. By its order dated 14.06.2019 in MA/559/2019 in CP/661/IB/2017, the Resolution Professional was to liquidate the assets of the Corporate Debtor (assessee in default), namely the 3rd Respondent/RLS Alloys (P) Ltd. 44. After the aforesaid order was passed by the NCLT on 14.06.2019, the 1st Respondent, Assistant Commissioner of GST, Srirangam, sent a letter on 10.08.2020 bearing reference Rc.No. 169/2020/A5, wherein it was stated that the said company was in arrears of Rs. 2,74,63,181/-. 45. It was further informed that, since revenue had become due to the Government and the company was under liquidation and was not in a position to pay the arrears, the above amount should be taken into consideration and requested that the sales tax dues be settled from and out of the s....
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....of a claim which is due from any person and includes a financial debt and operational debt; 51. The expression "claim" has been defined in Section 3(6) of the Code, which reads as under:- (6) "claim" means - (a)a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; 52. The expression "creditor" has been defined under Section 3(10) of the Code. It includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor, and a decree-holder. The definition of "creditor" under Section 3(10) of the Code reads as under: 3. Definitions.-In this Code, unless the context otherwise requires,- (10) "creditor" means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder; 53. The expression "secured creditor" has been defi....
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....horised to make an application for the corporate insolvency resolution processs or the pre-packaged insolvency resolution process, as the case may be, under the constitutional document of the corporate debtor; or (c) an individual who is in charge of managing the operations and resources of the corporate debtor; or (d) a person who has the control and supervision over the financial affairs of the corporate debtor; 57. The Income Tax Department or for that matter any other Tax Department are a "secured creditor" within the meaning of Section 3(30) of the Code, if they have already passed an assessment order and have attached the assets of such assessee i.e., the "corporate debtor" in accordance with the provisions of the respective Direct and Indirect Tax enactments. Thus, the Commercial Taxes Department, represented by the 1st Respondent, is a 'secured creditor' within the meaning of Section 3(30) of the Code. 58. A 'secured creditor' creditor stands under a different footing under the Code where there liquidation is ordered directly without the 'corporate debtor' undergoing a 'Corporate Insolvency Resolution Process' (CIRP). 59. In this connect....
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....Corporate Applicant" itself respectively. 65. A Petition under Section 9 of the Code has to preceede a notice contemplated under Section 8 of the Code. The "Corporate Debtor" is expected to respond to the said notice within a period of 10 days. It is only after the expiry of 10 days from the date of delivery of the notice under Section 8(1) of the Code, an "Operational Creditor" can initiate proceedings under Section 9 of the Code. 66. Once the 'Corporate Insolvency Resolution Process' (CIRP) is admitted by the Adjudicating Authority, the Adjudicating Authority has to declare a "Moratorium" in terms of Section 14 of the Code and appoint an Interim Resolution Professional (IRP) in the manner laid down under Section 16 of the Code, for issuance of a public announcement of the initiation of the 'Corporate Insolvency Resolution Process' (CIRP) for the submission of "claims" under Section 15 of the Code. 67. Thus, the initiation of the 'Corporate Insolvency Resolution Process' (CIRP), although can be at the behest of a "Financial Creditor", or a "Operational Creditor", or a "Corporate Applicant" as the case maybe, as provided under Sections 7, 9, and 10 of the....
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.... is reproduced below:- "29. Preparation of information memorandum. - (1) The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan. (2) The resolution professional shall provide to the resolution applicant access to all relevant information in physical and electronic form, provided such resolution applicant undertakes- (a) to comply with provisions of law for the time being in force relating to confidentiality and insider trading; (b) to protect any intellectual property of the corporate debtor it may have access to; and (c) not to share relevant information with third parties unless clauses (a) and (b) of this sub-section are complied with. Explanation. - For the purposes of this section, "relevant information" means the information required by the resolution applicant to make the resolution plan for the corporate debtor, which shall include the financial position of the corporate debtor, all information related to disputes by or against the corporate debtor and any other matter pertaining to the corporate debtor as may be specifie....
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....plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) The implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) confirms to such other requirements as may be specified by the Board. Explanation. - For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013(18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which co....
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....g on all stakeholders after it gets the seal of approval of the Adjudicating Authority and after it is approved by CoC, if the Resolution Plan meets all the requirement of in sub-section (2) of Section 30 of the Code. Section 31 of the Code is reproduced below:- "31. Approval of resolution plan. - (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, 2 including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. (2) Where the Adjudicating Au....
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....ay be specified; (b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15; (c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors; (e) file information collected with the information utility, if necessary; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including- (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a ....
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....section (1). (3) Where the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii), (iii) of clause (b) subsection (1). (4) On receipt of an application under sub-section (3), if the Adjudicating Authority determines that the corporate debtor has contravened the provisions of the resolution plan, it shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1). (5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor: Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority, (6) the provisions of sub-section (5) shall not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultati....
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.... resolution process costs and the liquidation costs paid in full; (b)The following debts which shall rant equally between and among the following: (i)Workmen's dues for the period of twenty-four months preceding the liquidation commencement date; and (ii) debts owed to a secured creditor in the event such secured creditor has relinquished security in the manner set out in section 52; (c) wages and any unpaid dues owed to employees other than workmen for the period of twelve months preceding the liquidation commencement date; (d) financial debts owed to unsecured creditors; (e) the following dues shall rank equally between and among the following: - (i) any amount due to the Central Government and the State Government including the amount to be received on account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or any part of the period of two years preceding the liquidation commencement date; (ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest; (f) any remaining debts and dues; (g)preference shareholders, if any: and (h)equity shareholders or partners....
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....s 328. Fraudulent preference 329. Transfers not in good faith to be void 330. Certain transfers to be void 331. Liabilities and rights of certain persons fraudulently preferred 332. Effect of floating charge 333. Disclaimer of onerous property 334. Transfers, etc., after commencement of winding up to be void 335. Certain attachments, executions, etc., in winding up by Tribunal to be void 336. Offences by officers of companies in liquidation 337. Penalty for frauds by officers 338. Liability where proper accounts not kept 339. Liability for fraudulent conduct of business 340. Power of Tribunal to assess damages against delinquent directors, etc., 341. Liability under Sections 339 and 340 to extent to partners or directors in firms or companies 342. Prosecution of delinquent officers and 359. Appointment of Official Liquidator 360. Powers and functions of Official Liquidator 361. Summary procedure for liquidation 362. Sale of assets and recovery of debts due to company 363. Settlement of claims of creditors by Official Liquidator 364. Appeal by creditor 365. Order of dissolution of company 87. A similar provision was also available in the Sick Industrial Compa....
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....herent power to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. This is similar to the powers are vested with the Hon'ble Supreme Court under Article 142 of the Constitution of India in its quest to do complete justice. However, such a provision is absent under the Code or the Rules made thereunder. 91. The essence of the Companies (Court) Rules, 1959, has now been incorporated under the Code with such changes that are consistent with the object of the Code to speed track the process either by subjecting the company to be rehabilitated or to liquidate it. 92. Under Rule 7 of the Companies (Court) Rules, 1959, Courts have also been vested with the power to enlarge or abridge the time appointed under the Rules or fixed by the Court for doing any act or taking any proceeding, upon such terms (if any) as the justice of the case may require and any such enlargement may be ordered, although the application for the same is not made until after the expiration of the time appointed or allowed. 93. Rule 7 of the Companies (Court) Rules, 1959 was perhaps by inspired from Section 148 of the Code of Civ....
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....equiring the creditors to file a claim petition within such time. Liquidation would culminate in dissolution of the company. 101. However, under Section 13 of the Code, once admission of application under Section 7, 9 or 10 is made, Corporate Insolvency Resolution Process (CIRP) commences with appointment of Interim Resolution Professional (IRP). The Interim Resolution Professional (IRP) has to call for submission of claims under Section 15 of the Code. Claims have to be submitted with the Interim Resolution Professional (IRP). 102. As mentioned above, the purpose of collating the claims by the Interim Resolution Professional (IRP) is to prepare an Information Memorandum under Regulation 36 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. The Hon'ble Supreme Court in Paragraph 67 in Ghanashyam Mishra and Sons Private Limited through its Authorized Signatory (cited supra) has explained the position as follows:- "67. Perusal of Section 29 of the I&B Code read with Regulation 36 of the Regulations would reveal that it requires RP to prepare an information memorandum containing various details of the corporate debtor so that the reso....
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....olution Professional was neither used for preparing the Resolution Plan nor any such Resolution Plan was sanctioned by the NCLT. 107. It will be useful to refer to the following decisions of the Hon'ble Supreme Court. The Hon'ble Supreme Court in Embassy Property Developments Pvt Ltd. Vs State of Karnataka, (2020) 13 SCC 308 held as under:- "It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression 'operational debt' under Section 5(21), making the Government an 'operational creditor' in terms of section 5(20). The moment the dues to the Government are crystaliised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the Adjudicating Authority, namely, the National Company Law Tribunal". 108. The Hon'ble Supreme Court in Ghanashyam Mishra and Sons Private Limited through the authorised Signatory vs. Edelweiss Asset Reconstruction Company Limite....
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....e Insolvency Resolution Process (CIRP) and liquidation of assets of Corporate Debtor. Whereas in this case, the Committee of Creditors (CoC) in their IV meeting held on 25.08.2019 unanimously rejected the Expression of Interest filed by MAK Auto Services and FERROSCO Industries Private Limited. There was no application filed for Corporate Insolvency Resolution Process (CIRP) in this case. The Committee of Creditors (CoC) directly resolved to liquidate the 3rd Respondent/RLS Alloys Pvt Ltd, the Corporate Debtor. 111. The Committee of Creditors (CoC) rejected both the Expression of Interest and unanimously passed the resolution for liquidation of the Company. If a resolution plan was filed and acted upon and a plan was approved by the Committee of Creditors (CoC) and sanctioned by the NCLT, failure to file a claim petititon in response to paper publication on 25.04.2019 could be construed fatal. However, it will impact only the ordinary creditors and not secured creditors. 112. As far as the question of delay in the filing of claim, the Court in RPS Infrastructure Ltd. Vs. Mukul Kumar and others, (2023) 10 SCC 718, the Hon'ble Supreme Court held that NCLAT's impugned judgme....
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.... Court in State Tax Officer vs. Rainbow Papers Limited, (2023) 9 SCC 545 has also held as under: 53. In other words, if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and there is no plan which contemplates dissipation of those debts in a phased manner; uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 IBC. 54. In our considered view, the Committee of Creditors, which might include financial institutions and other financial creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governmental Authority or for that matter, any other dues. .... 56. Section 48 of the GVAT Act is not contrary to or inconsistent with Section 53 or any other provisions of IBC. Under Section 53(1)(b)(ii), the debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank equally with other specified debts including debts on account of workman's dues for a period of 24 months preceding the liquidation commencement date. 57. As observed above,....
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....und for review, the submissions made by the learned counsel for the review petitioners that the Court in the impugned decision had failed to consider the waterfall mechanism as contained in Section 53 and failed to consider other provisions of IBC, are factually incorrect. As evident from the bare reading of the impugned judgment [State Tax Officer v. Rainbow Papers Ltd., (2023) 9 SCC 545], the Court had considered not only the waterfall mechanism under Section 53 IBC but also the other provisions of IBC for deciding the priority for the purpose of distributing the proceeds from the sale as liquidation assets. ---- 27. In view of the above stated position, we are of the opinion that the well-considered judgment [State Tax Officer v. Rainbow Papers Ltd., (2023) 9 SCC 545] sought to be reviewed does not fall within the scope and ambit of review. The learned counsel for the review petitioners have failed to make out any mistake or error apparent on the face of record in the impugned judgment [State Tax Officer v. Rainbow Papers Ltd., (2023) 9 SCC 545], and have failed to bring the case within the parameters laid down by this Court in various decisions for reviewing the impugned ju....
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....s under Section 53 for such upaid portion. Thus, the claim of a secured creditor is never subservical. 122. As per Section 52(2) of the Code, if a secured creditor intends to realize the security interest under clause (b) of sub-section (1), he/she has to inform the liquidator of such security interest and identify the asset subject to such security interest to be realized. Thus, an independent right is vested with the secured creditor in respect of security interest. 123. Section 52(1) of the Code is reproduced below:- 52. Secured creditor in liquidation proceedings. - (1) A secured creditor in the liquidation proceedings may- (a) relinquish its security interest to the liquidation estate and receive proceeds from the sale of assets by the liquidator in the manner specified in section 53; or (b) realise its security interest in the manner specified in this section. (2) Where the secured creditor realises security interest under clause (b) of subsection (1), he shall inform the liquidator of such security interest and identify the asset subject to such security interest to be realised. (3) Before any security interest is realised by the secured creditor under this sec....
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....as applicable to the security interest being realised and to the secured creditor and apply the proceeds to recover the debts due to it. 125. In the present case, the 1st Respondent has merely asked the liquidator to settle the tax dues. The 1st Respondent had not relinquished the security interest. Instead, has opted the mechanism as prescribed under Section 52(4) of the Code. 126. The IRP/RP liquidator ought to have informed the 1st Respondent to either to opt under Section 52(1)(a) or Section 52(1)(b) of the Code. However, liquidator namely Mr.S.R.Shiraam Shekher, decided to auction the property and is said to have distributed the amounts contrary to the scheme of the Code. 127. In fact, rights are vested with the secured creditor to seek assistance of Adjudicating Authority namely the National Company Law Tribunal (NCLT) to facilitate such secured creditors to realize the security interest in accordance with law by inviting an order under sub-section 6 to Section 52 of the Code. 128. Section 52(7) of the Code, further states that where the enforcement of the security interest under sub-section (4) yields an amount by way of proceeds which is in excess of the debts due to th....
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....to him after deducting the value so estimated in the same way as if he were an unsecured creditor. Section 12(2) of the Presidency-Towns Insolvency Act, 1909 reads as under:- "12. Conditions on which creditor may petition. (1) A creditor shall not be entitled to present an insolvency petition against a debtor unless- (a) the debt owing by the debtor to the creditor, or, if two or more creditors join in the petition, the aggregate amount of debts owing to such creditors, amounts to five hundred rupees, and (b) the debt is a liquidated sum payable either immediately or at some certain future time, and (c) the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition. Provided that where the said period of three months referred to in clause (c) expires on a day when the Court is closed, the insolvency petition may be presented on the day on which the Court reopens. [Added by Insolvency Law (Amendment) Act, 1950 (3 of 1950), section 2.]. (2) If the petitioning creditor is a secured creditor, he shall in his petition either state that he is willing to relinquish his security for the benefit of the creditors....