TMI Blog2006 (9) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... st the defaulting company under the Kerala Revenue Recovery Act, 1968. A notification was issued in that behalf in terms of section 71 thereof. 3. The properties belonging to the defaulting company were attached. In the meanwhile, the Company went for voluntary liquidation. A provisional liquidator was appointed. Appellant was informed thereabout. 4. In the pending company proceeding being C.A. No. 165 of 2001, Appellant filed an application seeking leave to proceed with the sale of the properties, which was objected to, inter alia, on the premise that the charge in respect of the alleged debt was not registered with the Registrar of Companies and, thus, it was an unsecured creditor. A Counter Affidavit thereto was filed by respondent. A prayer was also made by the Official Liquidator for a direction upon appellant to surrender the original documents. The application for leave to proceed with the revenue recovery proceeding was rejected by a learned Single Judge of the High Court by its order dated 28-11-2003. 5. An appeal thereagainst being Company Appeal No. 14 of 2004 preferred by appellant was dismissed by a Division Bench of the High Court. Appellant is, thus, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ik v. Devi Sahai AIR 1982 SC 989, this Court held : "58. What is the effect of attachment before judgment ? Attachment before judgment is levied where the court on an application of the plaintiff is satisfied that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him ( a ) is about to dispose of the whole or any part of his property, or ( b ) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court. The sole object behind the order levying attachment before judgment is to give an assurance to the plaintiff that his decree if made would be satisfied. It is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree. The provision in section 64 of the Code of Civil Procedure provides that where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment. What is claimed en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance upon a decision of the Kerala High Court in Kerala Financial Corpn. v. C.K. Sivasankara Panicker 1978 TAX. L.R. 1860, wherein in view of the fact that the State Financial Corporation had already taken recourse to section 31 of the State Financial Corporations Act. 18. The question therein was as to whether the order Ext. P18 has the effect of a decree creating a charge and section 46B of the State Financial Corporations Act has overriding effect over the provisions of section 125 of the Companies Act. It was held : ". . . Section 46B, no doubt, provides that the provisions of the State Financial Corporations Act shall have effect notwithstanding anything contained in any other law for the time being in force. An order for realization of the amount due to the Financial Corporation by sale of the assets of the Company amounts to a charged decree. The assets attached and ordered to be sold constitute the security for the amount due to the Corporation. But section 125 of the Companies Act declares that the charge so created by the company will be invalid as against the liquidator and any creditor if it is not registered with the Registrar of Companies. This is inconsist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Financial Corpn. case. This Court pointed out therein that section 29 of the SFC Act cannot override the provisions of sections 529(1) and 529A of the Companies Act, 1956, inasmuch as SFCs cannot exercise the right under section 29 ignoring a pari passu charge of the workmen. . . ." (p. 496) 21. The view taken therein was reiterated by a three-Judge Bench of this Court in Rajasthan State Financial Corpn. v. Official Liquidator [2005] 8 SCC 190 wherein it was stated : "18. In the light of the discussion as above, we think it proper to sum up the legal position thus : ( i )A Debts Recovery Tribunal acting under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 would be entitled to order the sale and to sell the properties of the debtor, even if a company-in-liquidation, through its Recovery Officer but only after notice to the Official Liquidator or the Liquidator appointed by the Company Court and after hearing him. ( ii )A District Court entertaining an application under section 31 of the SFC Act will have the power to order sale of the assets of a borrower company-in-liquidation, but only after notice to the Official Liquidator or the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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