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Showing contexts for: pari passu charge in Andhra Pradesh State Financial ... vs T.G.L. Quick Foods Limited, Adoni on 22 January, 2000Matching Fragments
7. Learned Counsel for the applicant-Corporation contended that once this Court granted permission to remain outside the liquidation proceedings in CA No.216 of 1996, this Court has to permit the finalisation of the assets of the company in liquidation. The Official Liquidator is only concerned with the dues of workmen under Section 529-A of the Act. As no fraud is played in receiving tenders of finalisation of the sale, the sale has to be confirmed. So far the claims of the workmen are concerned, the same were not ascertained by the Official Liquidator. In view of the same, if the applicant Corporation is not permitted to proceed with the finalisation of the sale, not only the applicant-Corporation, but all other second charge holders, including workmen, who are also having pari passu charge, will be the losers. In support of his case, he relied on the decision of a Division Bench of Gujarat High Court in Gujarat State Finance Corporation v. Official Liquidator (Guj), 1996 Vol.87 Com. Cas. 658; and the decision of a Division Bench of this Court in Andhra Pradesh State Financial Corporation v. Official Liquidator, (DB). '
10. In the Andhra Pradesh State Financial Corporation v. Official Liquidator (supra), a Division Bench of this Court held that:
"24. We are, therefore, firmly of the opinion that the right of the secured creditor emerging from Section 29 of the State Financial Corporation Act ceases to be an absolute right the moment it comes on the record of the case that there is a pari passu charge in respect of workmen's dues on the assets and properties of the company in liquidation".
11. In Maharashtra State Financial Corporation v. Official Liquidator, Bombay, , a Division Bench of the Bombay High Court held as follows:
"....Therefore, the power to seel which is given to a financial corporation under Section 29 has to be exercised consistently with the right of pari passu charge holder. Such a right can be exercised with the consent of the pari passu charge holder or on orders of the Court after making him a party to the proceedings to enforce the security. Since the charge holder is the Official Liquidator, his power to consent is subject to the sanction of the Court."
12. In Andhra Pradesh State Financial Corporation v. Electrothermic Private Limited, 1996 (2) ALD 213 (supra)), a Division Bench of this Court held as follows:
13. The principle called out from the above pronouncements is that the secured creditor like State Financial Corporation have an option to exercise its rights to realise the security without intervention of the Court, if stayed outside the winding up proceedings. In case if it is so, Section 529 of the Companies Act enforce the pari passu charge in favour of the workmen and to ensure that the amount realised was applied ratably for the discharge of the workmen dues which may feel necessary for the Court to intervene and impose conditions, which may be found necessary for the realisation of the pari passu charge in favour of the workers.