K RAMACHANDRA RAO Vs. RANKS CABLES LIMITED INLIQN

JUDGEMENT

(1.) This application is filed under Rule 9 of the Companies (Court) Rules, 1959 by the applicant seeking a direction to the Official Liquidator attached to this Court to clear the statutory dues like the property tax, electricity consumption charges arrears and building maintenance charges pertaining to lot No. 3 of the assets of the company in liquidation.

(2.) The applicant is a third party auction purchaser. Pursuant to the terms and conditions set forth inter alia in the auction notice, he participated in the auction and became the highest bidder. Thereafter the bid was knocked down in his favour and after paying the sale consideration, a sale deed was executed in his favour by the Official Liquidator and the property was also delivered. It so transpired subsequently that there appears to be some property tax arrears, building maintenance charges besides electricity consumption charges. When there has been a demand for payment of the property tax, the electricity charges and buildings maintenance charges, the applicant has now come forward with the present application for directing the Official Liquidator to pay the said charges.

(3.) Sri L. Venkateshwar Rao, learned counsel appearing for the applicant, seeks to contend that there has been no condition specific inter alia in the terms and conditions of the auction that the arrears of property tax, electricity consumption charges, building maintenance charges, etc. payable over the property should be paid by the auction purchaser. He seeks to invite my attention to Section 530 of the Companies Act. Section 530 reads that in a winding up case, these shall be paid in priority to other debts all revenues, taxes, cesses and rates due from the company to the Central or a State Government or to a local authority at the relevant date as defined in clause (c) of sub-section (8) thereof and having become due and payable within the twelve months next before that date. It is obvious from a perusal of the said provision that apart from the preferential debts like debts to the secured creditors and wages payable to the workmen, the monies payable towards revenues, taxes, and cesses to the Central Government or a State Government shall take precedence over the other debts to be paid by the Company. However, it is further obvious from a perusal of the said provision that these preferential payments either to a State Government or to the local authority which are due at the relevant date shall become due and payable within the twelve months next before that date. Any dues towards revenues, taxes, cesses, etc. for a period of twelve months preceding the relevant date, namely, date of winding up order passed by the Court shall take precedence over the other debts payable by the Company to the unsecured creditors. In the instant case, the major portion of the amount payable towards taxes and charges was subsequent to the date of the winding up order. At any rate, Section 530 of the Companies Act cannot be invoked in the present case inasmuch as it is available only when the assets of the Company which is ordered to be wound up by the company Court are sought to be disbursed to the creditors, secured as well as unsecured, when the question of payment of preferential claims would arise.