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1. In Company Application No. 79 of 1965 the Chittoor District Co-operative Marketing Society Ltd., Chittoor, is the applicant and has preferred the same against the order of the official liquidator allowing the Society's claim for Rs. 38,070.98 as that of an ordinary creditor. The grievance of the Society is that it should be deemed as a secured creditor and not an ordinary creditor and that is the matter which arises for consideration on merits in C. A. No. 79 of 1965.

2. Company Application No. 83 of 1965 was filed by the official liquidator under sections 468, 477 and 536 of the Companies Act, 1956, read with rule 9 of the Companies (Court) Rules, 1959. Inter alia, the official liquidator alleged that as per the account books of the company in liquidation (the Vegetols Ltd.) it was found that sums aggregating Rs. 62,231.25 were paid to the Society from the company's assets during the period from June 10, 1957, to March 31, 1960. The sums were set out in a schedule appended to the application. As these payments were made after April 11, 1957, the date of commencement of the winding up of the company, he claimed a refund of these amounts under Section 536 of the Companies Act. He stated in the application that the receipt of the said amounts was also admitted by the society in the proof affidavit filed before him, and that he had also required the society to pay the amounts by notice which was not complied with. He also claimed to summon and examine a representative of the society under Section 477 of the Companies Act.

22. These questions arose out of the following facts, namely, that the Chittoor District Co-operative Marketing Society Ltd., Chittoor, hereinafter referred to as the Society, had advanced certain amounts to the Vegetols Ltd., Chittoor, hereinafter referred to as the company. The managing director of the company appears to have executed a personal bond undertaking to pay the sums so advanced in the event of failure of the company to repay the amounts. It may be stated that the company was also a member of the Society. The Society demanded repayment of the monies advanced by it to the company, and on a dispute being raised, the matter was heard under Section 51 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932), hereinafter called the Societies Act, by the Registrar who ultimately passed an award. A compromise was effected before the Registrar, who passed a decree on August 10, 1955, for payment of Rs. 97,000 with interest at the rate of five per cent. per annum till the full amount is discharged in favour of the Society by the company. The above decree was an instalment decree payable at the rate of Rs. 3,000 per month with a default clause that, if any three consecutive instalments were not paid, the entire decree was capable of being executed either by the Deputy Registrar or the civil court. After this decree certain amounts appear to have been paid by the company when ultimately it went into liquidation on a creditor's petition in O.P. No. 4/57 filed on April 11, 1957. A winding-up order in relation to the company was passed by a company judge of this court on February 23, 1958.

33. With the above answer the case is remitted to the learned company judge.

34. [In pursuance of the above orders of the Division Bench the case was again heard by Narasimham J. who made the following order on March 28, 1968.] Narasimham, J.

35. These two applications are connected and are therefore heard together.

36. C.A. No. 83 of 1965 is taken out by the official liquidator seeking a direction for the refund of a sum of Rs. 62,231.25 with interest being the aggregate of the sums received from time to time by the respondent herein, The Chittoor District Co-operative Marketing Society Ltd., Chittoor, towards the debts due from the company in liquidation. The official liquidator has claimed the refund as, according to Section 536(2) of the Companies Act, 1956, any disposition of the property of the company made after the commencement of the winding-up, shall, unless the court otherwise orders, be void.

4. Whether the relevant provisions of the Indian Companies Act are not made applicable to the co-operative societies, the respondent being one such ?"

39. Company Application No. 122 of 1965 is an application under Section 536(2) of the Companies Act, 1956, seeking validation of the payments amounting to Rs. 62,231.25 received by the Society from the company in liquidation. It was stated that the company in liquidation was a member of the Chittoor District Co-operative Marketing Society Ltd., Chittoor, and that the Society advanced two sums of Rs. 50,000 each to the company. The Society filed an arbitration reference under Section 51 of the Madras Co-operative Societies Act on May 16, 1953, for the recovery of a sum of Rs. 99,450-15-8, being the balance of the amount due to the society from the 1 st respondent-company. Eventually, the Deputy Registrar, exercising powers under Section 51 of the Madras Co-operative Societies Act, passed the decree in terms of the compromise for an amount of Rs. 97,000 with interest at 5% per annum till the amount is fully discharged. In pursuance of the said compromise decree dated August 10, 1955, the Society received Rs. 62,231.25. The Society was never intimated of the riling of the winding-up application. Nor was it made a party to the said proceedings. The Society cannot be treated as having been fraudulently preferred to the other creditors under any circumstances. On the said allegations validation of payments was prayed for.