TEXTILE LABOUR ASSOCIATION Vs. I F C I

JUDGEMENT

(1.) Textile Labour Association, appellant, has filed this appeal against the judgment and order dated 25th August, 1998, passed by this Court in Civil Application No.147 of 1998 with Company Application No.265 of 1998 in Misc.Civil Application No.6 of 1992 i.e., in the case of Industrial Finance Corporation India Vs. O.L. Of Amruta Mills Ltd.

(2.) Mr.D.S.Vasavada, learned advocate appeared for the appellant " Textile Labour Association. He has invited our attention to the following facts:

(3.) Mr.Vasavada, learned advocate for the appellant has stated that when the appeal was filed, the Division Bench of this Court in the case of Gujarat State Financial Corporation Vs. Official Liquidator and others reported in 87 Company Cases 658 supported their contention. The learned counsel has submitted that the learned Single Judge ought to have realised that the secured creditors have chosen to remain outside the winding up proceedings and therefore it is not permissible to claim the reimbursement of expenses incurred by them even after winding up of the Company. The learned counsel further submitted that the learned single Judge ought to have held that when a secured creditor opts to realise the security under the Special Act then it is also obligatory on it to bear the entire brunt of expenditure incurred by it. It was stated that the learned Single Judge ought not to have granted the reimbursement in this behalf. The said Division Bench judgment reported in 87 Comp. Cases 658 had followed the decision of the Division Bench of Karnataka High Court in International Coach Builders Ltd. (in liquidation) Vs. Karnataka State Financial Corporation (1994) 81 Comp. Cases 19 (Kar). However, the Hon'ble Supreme Court reversed the said decision of the Karnataka High Court in (2003) 114 Comp. Cases 614 and also by the same judgment, in Civil Appeal No.6303 of 1995, the judgment of the Division Bench of this Court in 87 Company Cases 658 was set aside.