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Thus, the question which arises for consideration for the present is, whether CBI is entitled to priority over other secured creditors viz. IDBI and other financial institutions for payment out of the amount realised or whether IDBI and other financial institutions have priority for payment to them over CBI. It is not disputed that the workers claim will rank pari passu with the claims of secured creditors. It is submitted by Mr. Arun H. Mehta, learned counsel for the CBI that CBI has first advanced money to the Company (in liquidation) and CBI has first charge over the movable plant & machinery; that CBI & IDBI as secured creditors do not have pari passu charge in as much as the CBI has the charge over movable plant & machinery. The charge dated 14-12-1984 in favour of IDBI is specified whereas the charge dated 15-6-1987 in favour of IDBI is not registered and it is merely an agreement; that the bridge loan advanced in 1984 was converted as term loan and on 15-6-1987 agreement for creating charge on movable plant & machinery came to be executed; that the charge dated 14-12-1984 merges with the agreement of 1987, which is not registered; that relief clause No. 34 (c) & (d) in the plaint in Bombay Suit is suggestive of the fact that 15-6-1987 charge is not registered; that the charge in favour of CBI on movable plant & machinery is since 1987 as the charge is in respect of all machineries; that the bridge loan of 1984 was cancelled and term loan charge is not registered.

5.CBI has filed affidavit of Mr. P.J. Kumar, Branch Manager, to contend mortgage, hypothecation and pledge in respect of all the properties of the Company in liquidation including building land, plant & machinery and stock in trade etc. is created in favour of CBI as the first charge holder. IDBI has filed affidavit of Mr. A. Khandual, wherein it has been testified that IDBI had sanctioned and granted term loan of Rs.58-00 lacs upon the terms & conditions contained in letter of intent dated 1-6-1984; said term loan was sanctioned against creation of security in favour of IDBI; that the CBI vide its letter dated 28-11-1984 addressed to IDBI gave confirmation that CBI will have first pari passu charge on all the movable and immovable assets of the company in liquidation (excluding such specific machinery purchased out of D.P.G. of Bank and term loan of GIIC Ltd, both present and future) along with financial institutions subject to CBI's prior charges on specific current assets for working capital facilities. Pursuant thereto the company in liquidation executed deed of hypothecation dated 14-11-1984 in favour of IDBI and by the said Deed of Hypothecation sum of Rs.52-00 lacs agreed to be lent and advanced by IDBI to the company in liquidation together with interest thereon was secured by creating charge on the whole of the movable property of the company in liquidation, including its movable plant and machinery, machinery spares, tools etc. both present and future, save and except those purchased under the Deferred Payment Guarantee from CBI and GIIC Limited.

" As desired by the company, we give hereby our consent as under:
Central Bank will have first pari passu charge on all the moveable and immovable assets of the company (gross value Rs.535.7 lacs and net value Rs.202.35 lacs as of 31st December, 1983) both present and future (excluding such specific machinery purchased out of DPG of our Bank and term loan of GIIC) alongwith financial institutions subjectto our prior charges on specific current assets for working capital facilities. "

(c) and (d) of para-34 in the said plant, the letter dated 28-11-1984 (page 226) cannot be said to be creating first charge in favour of IDBI and other financial institutions and IDBI and other financial institutions cannot claim pari passu charge along with CBI over sale proceeds of properties of the Company (in liquidation).

14.Order accordingly. 

Dt: 1-11-2001                           ( N.G. Nandi, J )




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