Patna High Court - Orders
Bihar State Financial Corporation ... vs The Official Liquidator, Patna High ... on 21 August, 2014
Author: Mihir Kumar Jha
Bench: Mihir Kumar Jha
IN THE HIGH COURT OF JUDICATURE AT PATNA
Company Appeal No.3 of 2013
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Bihar State Financial Corporation, having Its Head office at Fraser Road,
Patna
.... .... Appellant/s
Versus
The official Liquidator, Patna High Court, Patna
.... .... Respondent/s
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Appearance :
For the Appellant/s : Mr. Vinay Krishna Tripathy, advocate.
For the Respondent/s : Mr. Gautam Kumar Kejriwal, advocate.
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CORAM: HONOURABLE MR. JUSTICE MIHIR KUMAR JHA
ORAL ORDER
5 21-08-2014Heard learned counsel for the appellant as also learned counsel for the official liquidator.
Assailing the impugned order dated 31.01.2013 passed by the official liquidator, Mr. Vinay Krishna Tripathy, learned counsel appearing on behalf of the appellant Bihar State Financial Corporation (hereinafter referred to as 'the Corporation'), has submitted that when it is an admitted fact that the appellant Corporation had given four loans as reduced in writing by way of registered agreement, the view taken by the official liquidator in the impugned order recognizing only one of the four agreement and thereby declaring the Corporation to be secured creditor only for the amount involved in the first agreement to the tune of Rs. 6.24 lakhs which now with interest has now escalated to Rs. 19,45,027.30 paise, would be a travesty of justice because the official liquidator could not have held corporation in respect of the Patna High Court COM. APPEAL No.3 of 2013 (5) dt.21-08-2014 2/5 other three loan accounts of March 1984 as also March 1987 and November 1987 for a sum of Rs. 9,60,000/-, 27,7000/- and 6,27,000/- respectively as unsecured creditor. He has accordingly assailed the appellate order dated 31.01.2013 wherein appellant Corporation had been declared to be unsecured creditor for a sum of Rs. 1,25,95,392.92 paise.
Mr. Tripathy, in order to support his submission, has referred to the terms and conditions of the agreement and as also relied on the transaction being covered by the agreement between the BICICO, the Corporation and the Company under liquidation i.e M/s Arya Bhatt Paper Mill (P) Ltd. To that extent, he has also placed reliance on an agreement dated 3rd November, 1987 between BICICO, BSFC and M/s Arya Bhatt Paper Mill (P) Ltd. to substantiate that all the four loan accounts were one and same and, therefore, the official liquidator ought to have not segregated them for the purposes of declaration of the Corporation as secured/unsecured creditor. He has, in this regard, also sought to seek support from an unreported judgment of Calcutta High Court dated 7.10.2005 in C.A. NO. 607 of 2005 with BIFR Case No. 114 of 1989 [Bihar State & Financial Corpn. Vs. Indus Electronical Ltd.(In Liqn.)].
Per contra, Mr. Gautam Kumar Kejriwal, learned Patna High Court COM. APPEAL No.3 of 2013 (5) dt.21-08-2014 3/5 counsel appearing on behalf of the official liquidator, has submitted that the touch stone for deciding the issue by the official liquidator was a requirement laid down under Section 125(1) of the Companies Act, which in no uncertain terms lays down that it is only the certificate of registration which will be clinching the issue because every charge created by a company as against any security on the company's property has to be duly registered and a certificate of registration will be only proof of such fulfillment of the requirement under section 125(1) of the Companies Act. He has, in this regard, referred to the certificate of registration vide Annexure-2, which would go to show that the same was in respect of only for the first agreement of Rs. 6.24 lakhs covered by the Corporation's agreement with the company under liquidation for a sum of Rs. 6.24 lakhs.
In the considered opinion of this Court, the submission of Mr. Kejriwal has to be accepted for more than one reason. Firstly, it has to be kept in mind that the same property was mortgaged by M/s Arya Bhatt Paper Mill (P) Ltd. with BICICO for obtaining loan of Rs. 60 lakhs. Subsequently, when the company under liquidation wanted further loan and had approached the Corporation to accord advance loan on the same security, which was under mortgage with the BICICO, an Patna High Court COM. APPEAL No.3 of 2013 (5) dt.21-08-2014 4/5 agreement was entered into on 15.12.1982, which is Annexure-1 to this Appeal. The said agreement nowhere envisages that the Corporation could have granted any further additional loan against the same property under mortgaged already with the BICICO and made part of the first loan agreement.
Thus, there being no continuity between the first and the remaining three loan accounts given by the Corporation to the company under liquidation and at least nothing being reflected to this effect from the first agreement dated 15.12.1982, this Court will have no difficulty in coming to the conclusion that whatever property was mortgaged by M/s Arya Bhatt Paper Mill (P) Ltd. (company under liquidation) on 15.12.1982 was only in respect of a loan of Rs. 6.24 lakhs. The rest of the three loan agreements and its disbursal by the Corporation for a sum of Rs. 9.60 lakhs, 27.07 lakhs and 6.27 lakhs respectively may have been entered into between the Corporation and M/s Arya Bhatt Paper Mill (P) Ltd. (company under liquidation) but then, in absence of certificate of registration, as required under Section 125(1) of the Companies Act, cannot be treated to be valid transaction so as to create the status of its being secured loan and consequently, the Corporation being the secured creditor.
The reliance placed by Mr. Tripathi either on the Patna High Court COM. APPEAL No.3 of 2013 (5) dt.21-08-2014 5/5 tripartite agreement dated 03.11.1987 between the BICICO, Corporation and the M/s Arya Bhatt Paper Mill (P) Ltd. primarily, being a pari pasu agreement, in no way will improve the situation and in no event will not fulfill the requirement of Section 125 of the Companies Act.
Similarly, the unreported judgment of the Calcutta High Court in the case of Bihar State & Financial Corporation (supra) will be of no avail at least for the purposes of assailing the impugned order passed by the official liquidator. The official liquidator was not dealing with the power of granting of certificate of registration rather was only called upon to examine the claim of the Corporation for its being secured or unsecured creditor in respect of the transaction entered into with the company, under liquidation, namely, M/s Arya Bhatt Paper Mill (P) Ltd.
That being so, this Court does not find any merit in this Appeal and the same is, accordingly, dismissed.
(Mihir Kumar Jha, J) Sujit/-
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