SICOM LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) These Appeals can be conveniently disposed of by a common order, because the challenge in these Appeals is to the same order. In these Appeals the order dated 7-2-2004 passed by the learned single Judge in following Company Applications is challenged.

(2.) Though, it is a common order, the order which is challenged in these two Appeals was made in Company Application No. 540 of 2002 and Company Application No. 101 of 2002. Both these Applications were filed by the State of Maharashtra for recovery of the amounts which were due to it from the company under liquidation under the Sales Tax Act. The claim of the State Government was that the State Government is entitled to recover the amount in question in preference to the claim of any other creditor including the secured creditors and workers. It appears that, thereafter, at the hearing the relief sought was modified and it was claimed that the Court should direct that the State Government is entitled to recover its dues as secured creditors pari-pasu with the secured creditors and workers. The learned single Judge has granted that application of the State Government. The Appellant in Appeal No. 658 of 2004 is SICOM, which is admittedly a secured creditor governed by the provisions of Section 529A of the Companies Act in relation to the company under liquidation and the Appellant in Appeal No. 5 of 2008 is a CoOperative Bank which is also secured creditor governed by the provisions of Section 529A in relation to the company under liquidation.

(3.) There is no dispute before us that the provisions of Section 529A are applicable in relation to the dues of both the Appellants. It was claimed, however, on behalf of the State Government that because of the provisions of Section 38(C) of the Bombay Sales-tax Act statutorily the State Government becomes a secured creditor and therefore, it is entitled to payment of its dues alongwith the secured creditors and the workers. This contention of the State Government has been upheld by the learned single Judge.