TMI Blog1994 (4) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order directing the transfer is set aside. - 3911 OF 1994 - - - Dated:- 27-4-1994 - M.N. VENKATACHALIAH AND S. MOHAN, JJ. Anil B. Diwan, P.H. Parekh and Ms. Smriti Mishra for the Appellant. Arvind Kumar, K.R. Venkataraman and Ms. Laxmi Arvind for the Respondent. JUDGMENT S. Mohan, J. Leave granted. The appellant filed a suit, bearing O.S. No. 7 of 1986 against respondents Nos. 1, 3 and 4 in the Court of the Subordinate Judge, Ranga Reddy District at Saroor Nagar, Andhra Pradesh, for recovery of Rs. 97,21,274.11 with interest thereon. The further prayer was, in default of payment a final decree might be passed directing the sale of mortgaged properties and for ancillary reliefs. The avermen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the Sundernagar branch, Bombay, to the Hyderabad main branch of the appellant. O.S. No. 507 of 1989 came to be filed by the appellant for recovery of a sum of Rs. 58,783.25 being expenses incurred from time to time in respect of these properties. Both the suits are pending adjudication. Premier Automobiles Ltd. filed a winding up petition against the first respondent in Company Petition No. 645 of 1988 before the High Court of Bombay. By an order dated June 23, 1990, the first respondent was ordered to be wound up. The official liquidator (respondent No. 2) was appointed as liquidator of the company. On July 23, 1990, a meeting was held in the presence of the official liquidator. The appellant brought to the notice of the officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant stands outside the winding up proceedings as laid down in M.K. Ranganathan v. Government of Madras [1955] 25 Comp. Cas. 344 ; AIR 1955 SC 604. After all this is a suit for the enforcement of an equitable mortgage. The properties are situate in Ranga Reddy District. It will be not only just and convenient but also proper for the suit to be conducted there. The convenience of the official liquidator alone should not be the concern. Therefore, it is prayed that part of the order, may be set aside. In opposition to this, Mr. Arvind Kumar, learned counsel would urge that it is true that the secured creditor stands outside the winding up proceedings. That does not mean the company court loses its jurisdiction under section 446(2) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough. An evenhanded justice requires that the court should have power to intervene at an early stage for the protection of the assets, and this power is given by this section." This section aims at safeguarding the assets of a company in winding-up against wasteful or expensive litigation as far as matters which could be expeditiously and cheaply decided by the company court. In granting leave under this section, the court always takes into consideration whether the company is likely to be exposed to unnecessary litigation and cost. The position of secured creditors came to be decided by this court in M.K. Ranganathan's case [1955] 25 Comp. Cas. 344 , 351. At pages 607 and 608, in paragraphs 15 and 16 (of AIR 1955 SC 604), it was held : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch leave would almost automatically be granted. Section 231 has been read together with section 228(1) and the attachment, sequestration, distress or execution referred to in the latter have reference to proceedings taken through the court and if the creditor has resort to those proceedings he cannot put them in force against the estate or effects of the company after the commencement of the winding up without the leave of the winding up court. The provisions in section 317 are also supplementary to the provisions of section 231 and emphasise the position of the secured creditor as one outside the winding up, the secured creditor being, in regard to the exercise of those rights and privileges, in the same position as he would be under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h deals with winding up proceedings, would clearly show that the jurisdiction of the court to entertain and dispose of proceedings set out in sub-clauses ( a ) to ( d ) of sub-section (2) can be invoked in the court which is winding up the company." Without intending to lay down the law broadly but confining only to the facts of this case, we feel that the order of transfer of the suits to the High Court of Bombay cannot be supported. We are unable to uphold the finding of the High Court when it observed : "On examination of the facts and circumstances of the case, I am of the opinion that defending at a far distance in the Court of the Additional Subordinate Judge, Ranga Reddy District at Saroor Nagar in Andhra Pradesh, is going to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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