SUSHIL PRASAD Vs. VINOD MOTORS PR

JUDGEMENT

(1.) The short question which comes up for consideration in this case is as to whether the petitioner is a secured creditor or not.

(2.) The Company in liquidation belonged to the family of the petitioner. It ran into financial difficulties. Large sums of money were owed by the Company to the Central Bank of India.

(3.) The case of the petitioner is that he, along with his father and brother, was the owner of the property known as Swiss Hotel, Delhi. In order to see that the dues of the Central Bank of India from the Company in liquidation were cleared, the petitioner and his father and brother agreed to sell the said Swiss Hotel, Delhi to M/s. Oberoi Hotels (India) Pvt Ltd. The money which was to be realised from that was to be utilised for paying off the Central Bank of India for and on behalf of the said Company. According to the petitioner the Company had agreed that the money which is so paid would result in a mortgage or a charge being created by the Company of its property at Indore in favour of the petitioner and his father and brother. According to the petitioner, with a view to give effect to the aforesaid scheme, the petitioner and his father and brother issued a power of attorney dated 18th April, 1966 in favour of the Central Bank of India. By this power of attorney the Central Bank of India were, inter alia, entitled to realise from M/s. Oberoi Hotels (India) Pvt. Ltd., the intending parchasers of Swiss Hotel, the balance amount of sale price payable by them. The Central Bank was further authorised that out of the sale proceeds so received by them the debt due to the Bank from the Company would first be liquidated. The balance amount was to be placed to the credit of the joint account of the petitioner and his father and brother. On that very day i.e. on 18th April, 1966 a letter was also written to Oberoi Hotels (India) Pvt. Ltd. to the effect that the balance amount of sale price payable by them should be paid to Central Bank of India. On 19th April, 1966 the Board of Directors of the Company passed a resolution in which it was, inter alia, stated as follows :-