Rajasthan High Court - Jaipur
Airforce Naval Housing Board vs M/S Paam Pharmaceutical(Delhi)Ltd on 7 April, 2017
Author: Alok Sharma
Bench: Alok Sharma
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
S.B. Company Application No.134/2016
In
S.B. Company Petition No.15/2006
Airforce Naval Housing Board
Air Force Naval Station, Race Course,
New Delhi-110003.
----Petitioner
Versus
M/S PAAM Pharmaceutical (Delhi) Ltd.
To be served through Official Liquidator, Jaipur.
(Attached to the Hon'ble High Court of Rajasthan at Jaipur)
Corporate Bhawan G-6-7, Residency Area,
Civil Lines, Jaipur-302001.
----Respondent
_____________________________________________________ For Petitioner(s) : Mr. Vishwajeet Mantri. For Respondent(s) : Mr. Gaurav Sharma for Official Liquidator. _____________________________________________________ HON'BLE MR. JUSTICE ALOK SHARMA Order 07/04/2017 The matter comes up on application at the instance of the Airforce Naval Station under Section 177 of the Companies (Court) Rules, 1959 read with Section 5 of the Limitation Act for condonation of delay in filing claim in form no.66 before the Official Liquidator (O.L.).
Vide order dated 08.05.2015 passed by this Court in S.B. Company Application No.15/2006 M/s PAAM Pharmaceuticals was directed to be wound up. The O.L. attached to this Court was appointed as the O.L. of the company aforesaid now in winding (2 of 4) [COAP-134/2016] up.
The case of the applicant is that it came to know of the winding up order dated 08.05.2015 only on or about 03.06.2016. It thereupon filed its claim of Rs.1 crore in form no.66 on 05.07.2016 before the O.L. It has been submitted that the delay in filing the claim before the O.L. in the circumstance is neither deliberate nor negligent but for reason of lack of knowledge of the applicant that PAAM Pharmaceuticals had been wound up by the order of this Court on 06.05.2016. It has been submitted that in the circumstances the delay of 268 days in filing the claim before the O.L. be condoned and he be directed to dispose it of in terms of the judgment dated 18.11.2010 passed by the Special Court NDPS Patiala House in Cr. A. No.19/09 treating the applicant's due of Rs.1 crore against the company in liquidation as a secured debt.
Mr. Gaurav Sharma appearing for the O.L. submitted that the instance application is not sustainable inasmuch as the Special court NDPS, Patiala House, vide order dated 18.11.2010 has directed the jurisdictional District Collector to move an application before this court. The applicant therefore has no competence to agitate this application. Mr. Gaurav Sharma further submitted that even otherwise the order of the Special Court NDPS passed on 18.11.2010 directing that the compensation awarded by the Metropolitan Magistrate Patiala House to the applicant on a complaint under Section 138 of the Negotiable Instruments Act (hereinafter 'the Act of 1881') be recovered as a secured debt is per incuriam. He submitted that a secured debt for the purpose of recovery from a company in liquidation is one when a loan is (3 of 4) [COAP-134/2016] advanced against an underlying security and none other. He submitted that though the amount of compensation determined by the Metropolitan Magistrate Patiala House under judgment dated 19.05.2008 on the applicant's complaint under Section 138 of the Act of 1881 is indeed recoverable as arrears of land revenue in terms of Section 421 read with Section 431 of the Code of Criminal Procedure 1973 but is not a secured debt as admittedly there is no underlying security. It is thus only recoverable under Section 530 of the Act of 1956 as revenue and not on priority as a secured debt under Section 529 A thereof. Mr. Gaurav Sharma submitted that in the circumstances the application under consideration be disposed of condoning the delay in filing the claim by the applicant, yet it be clarified that the claim of the applicant would be recoverable only as revenue with reference to Section 530 of the Act of 1956 and be subject to the overriding preferential payments under Section 529 A of the Companies Act. And not as a secured debt.
Heard. Considered.
Priorities for recovery of debts due from a company in liquidation have been set out in the Act of 1956. The secured debts i.e. loans against underlying securities and workman's dues have been placed on a higher pedestal then the other debts of the company in liquidation such as where money due from it is recoverable as revenues/taxes. It is indeed true that the compensation of Rs.1 crore awarded to the applicant on its complaint under Section 138 of the Act of 1881 is recoverable from the company in liquidation as arrears of land revenue with (4 of 4) [COAP-134/2016] reference to Section 421 read with 431 of the Code of Criminal Procedure 1973. However all amount inter alia recoverable as revenues are covered under Section 530 of the Act of 1956 which is subordinate to the overriding preferential rights of the creditors qua secured debts against underlying securities and workmen's dues under Section 529 A of the Act of 1956. The Metropolitan Magistrate under his judgment dated 19.05.2008 or for that matter the Special Court NDPS Patiala House under judgment dated 18.11.2010, could not have directed in a vacuum on their ipse dixit de hors an underlying security that compensation recoverable under Section 421/431 Cr.P.C. would partake the character of a secured debt. The courts in issue have no legislative power to vary the statutory priorities for recovery of debt from a company in liquidation. Directions entailing such variation are plainly per incuriam and non-binding. They can be complied only suitably modified as warranted by law.
In the circumstances, I am of the considered view that the directions of the Special Court NDPS Patiala House in the judgment dated 18.11.2010 that the compensation awarded to the applicant by the Metropolitan Magistrate Patiala House in his judgment dated 19.05.2008 would partake the character of a secured debt are per incuriam and not binding on the O.L. The application for condonation of delay in filing the claim of the applicant before the O.L. is accordingly allowed. The O.L. to proceed in respect thereof in accordance with law and as directed above.
(ALOK SHARMA), J.
Karan