IN THE MATTER OF THE COMPANIES ACT, 1956 Vs. IN THE MATTER OF THE NATIONAL OIL MILLS & INDUSTRIES LTD. (IN LIQUIDATION)

JUDGEMENT

(1.) I heard counsel for the Official Liquidator,counsel appearing for the auction -purchaser,counsel appearing for the Kozhikode Corporation and the counsel appearing for the applicant on the claim for priority regarding the property tax due to the Kozhikode Corporation.The claim for priority for the entire arrears of tax by the Kozhikode Corporation is based on section 105 of the Calicut City Municipal Act.1961.Section 105 of that Act reads:

(2.) COUNSEL on behalf of the secured creditor relied on the ruling in Income -tax Officer,Ernakulam v. Indian Traders Bank Ltd.( In Liquidation ), 1969 K.L.T.596.I do not think that decision can render any assistance in resolving the present controversy.The declaration of prior charge by section 105 of Act 30 of 1961 in respect of the amount referred to in section 530(1 )(a)is not inconsistent with that provision and in the matter of preferential payment in respect of the amount which will come within the ambit of section 530(1)it is open to he Calicut Corporation to claim priority under section 105 of Act 30 of 1961.I therefore overrule the plea of the secured creditor that no priority as against him can be claimed by the Calicut Corporation in respect of R 1,060.86.I do not find anything in section 446(4)of the Companies Act or section 417 of Act 30 of 1961 against the view which I am taking.