TMI Blog2004 (4) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant as to how these advances were made for over a period of ten years without obtaining any security. The appellant ultimately sought to create securities in respect of these transactions only in 1990. The Division Bench was also correct that the grant of leave under section 536(2) would not be appropriate after this delay. The High Court erred in setting aside the learned Single Judge’s order even in respect of the post 10-7-1986, loans on the simple ground that this was beyond the scope of the appellant’s appeal. The appellant could not be in a worse position by having preferred the appeal from the order of the learned Single Judge. - CIVIL APPEAL NO. 4410 OF 1997 - - - Dated:- 15-4-2004 - MRS. RUMA PAL AND P. VENKATARAMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claims of all creditors of the company and that before any such order is passed publicity should be given to the application so that all creditors could file their objections to the application under section 536(2), if they wanted to do. It was also found that the application under section 536(2), was moved only on 30-11-1990. It was noted that no details have been given regarding those transactions which had taken place prior to 10-7-1986. This was sought to be rectified only subsequently by giving details of the earlier loans. The High Court held that what the appellant was in fact seeking to do was to convert itself from an unsecured into a secured creditor in respect of transactions which had taken place 15 to 17 years ago . The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of ten years without obtaining any security. The appellant ultimately sought to create securities in respect of these transactions only in 1990. The Division Bench was also correct that the grant of leave under section 536(2) would not be appropriate after this delay. Leave under section 536(2) may be granted for the benefit of the company in liquidation or the creditors of the company in general. It cannot be said that the securing of old debts due to one creditor of the appellant by creating of a mortgage ex post facto would in any way either enure towards the preservation of the company s assets or its business or enure to the benefit of its other creditors. 5. However, we are of the view that the High Court erred in setting as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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