CANARA BANK Vs. OFFICIAL ASSIGNEE MADRAS

JUDGEMENT

(1.) Leave granted.

(2.) Heard learned counsel for the parties. This appeal is directed against judgment dated 29-6-1995 passed by the Division Bench of the Madras High Court in O.G.A. Nos. 134 to 136 or 1988. By the impugned judgment, the appellants claim for being treated as secured creditor under the proviso to Section 17 of the Presidency Town Insolvency Act (hereinafter referred to as the Act) read with Section 52(2)(a) of the Act has been disallowed. The appellants claimed that the goods which were hypothecated to the appellant bank by the insolvents could be sold by the bank for recovery of its dues as secured creditor without approaching the Official Assignee like an ordinary creditor.

(3.) The main contention of the appellant is that the goods hypothecated to the appellant belonged to the insolvents who had created a charge over the said goods in favour of the appellant. In such circumstances Section 17 read with Section 52(2)(a) of the Act, and not Section 52 (2)(c) of the Act, is applicable. It will be appropriate to refer to Section 52 of the Act for appreciating rival contentions of the parties: