STATE BANK OF MYSORE Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) Company Application No. 49 of 1977 is filed by the State Bank of Mysore having its head office on Kempegowda Road Bangalore, (hereinafter referred to as "the bank"). The application is presumably under s. 446(2)(b) of the Companies Act, 1956 (hereinafter referred to as "the Act"). It is necessary to mention here that the bank has filed earlier Company Application No. 142 of 1976 seeking therein an order of this court restraining the first respondent-official liquidator therein from making payment of income-tax in respect of M/s. Mysore Chemicals and Fertilisers Ltd., a public limited company incorporated under the Act and which was by an order dated December 14, 1973, order to be wound up by this court in Company Petition No. 15 of 1972 filed by the State Trading Corporation of India, New Delhi, a creditor, in as much as the bank was a secured creditor and was entitled to preferential payment even before the tax dues, if any, were settled. While that petition was pending, C.A. No. 49 of 1977 was filed by the bank in the circumstances hereafter to be set out.

(2.) In the latter application the bank has prayed :

(3.) The bank claims, to the best of its knowledge, to be the sole secured creditor of aforementioned M/s. Mysore Chemicals and Fertilisers Ltd. (hereinafter referred to "as the company in liquidation"). The bank had extended the financial facility in respect of which to the company in liquidation over a period of years. The facilities were in the nature of : (1) medium-term loan, and (2) cash credit facility in respect of which the company in liquidation had hypothecated its plant and machinery and movables to the extent of Rs. 30 lakhs and also created an equitable mortgage by deposit of title deeds with the bank on security of the immovable properties of the company in liquidation. The details of the loan transaction will be referred to later.