TMI Blog2011 (3) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... to be treated as a secured creditor-which is untenable in law. no charge in favour of the appellant, the appellant cannot be considered as a secured creditor. appeal being bereft of merits, is dismissed - CO. A. (SB) 47 OF2006 - - - Dated:- 17-3-2011 - MANMOHAN, J. Sangram Patnaik and Ms. Renu Nanda for the Appellant. Mayank Goel for the Official Liquidator. Arvind Kumar Singh for the IFCI. JUDGMENT 1. Present appeal has been filed under section 460(6) of the Companies Act, 1956 read with rules 6, 9, 164 and 165 of the Companies (Court) Rules, 1959 for directing the Official Liquidator to consider IDBI as secured creditor. 2. The relevant facts of the present case are that appellant had advanced loan of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount by sale of assets of the defendant company." 6. However, the Official Liquidator vide order dated 6-5-2005 rejected the appellant s claim as secured creditor on the ground that the appellant s charge was not registered under section 125 of the Companies Act, 1956. 7. Mr. Sangram Patnaik, learned counsel for IDBI submitted that in the present case a charge had been created in favour of the appellant by virtue of the decree passed by the DRT, Chandigarh read with section 100 of the Transfer of Property Act, 1882. Section 100 of the Transfer of Property Act, 1882 reads as under:- "100. Charges. Where immovable property of one person is by act of parties or operation of law made security for the payment of money to anothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumes that charges can be created only by act of parties or by operation of law and the second paragraph which was added in 1929 refers to charges generally. A charge created by a decree of Court based upon an award made upon an agreement out of Court or otherwise is a charge created by operation of law and comes within section 100." [pg. 354] .. I see no reason why a charge created by a decree should not be considered to come within the purview of section 100. "Operation of law" only means working of the law and I do not see why the expression should be restricted in its application to such case as fall under section 55 or section 73." [pg. 359]. ( iii ) Indian Bank v. Official Liquidator, Chemmeens Exports (P.) Ltd. [1998] 16 SCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bengal Engg. Co. (P.) Ltd. [1984] 56 Comp. Cas. 214 (Cal.) wherein it has been held as under:- "If a charge is created by an order of the Court, it will not require registration under section 125 of the Companies Act, 1956". "That the benefit of the security was entirely the creature of the order of the Court. It was not a charge created by the company and did not require registration." 9. Having heard Mr. Sangram Patnaik, learned counsel for appellant, I am of the opinion that the submissions of the appellant are misconceived on facts. Admittedly, no charge was ever created in favour of the appellant by the company in liquidation as no charge was registered with the Registrar of Companies under section 125 of the Companies Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any in liquidation. 15. But merely because appellant is in possession of a decree for recovery, does not mean that appellant becomes a secured creditor. In fact, every decree holder is entitled to seek sale of assets of the defendant, in the event the decree is not satisfied. In my opinion, if Mr. Patnaik s submissions were to be accepted, then every sundry/unsecured creditor after obtaining a decree from the Civil Court would have to be treated as a secured creditor - which is untenable in law. 16. Consequently, as there is no charge in favour of the appellant, the appellant cannot be considered as a secured creditor. 17. Accordingly, present appeal being bereft of merits, is dismissed but with no orders as to costs. - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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