STATE BANK OF INDIA Vs. DEPRO FOODS LTD

JUDGEMENT

(1.) BRIEFLY, the facts are that the applicant had advanced loan to respondent No. 1. The other respondents were guarantors for repayment of the loan. All the respondents had mortgaged their properties with the applicant. The loan was not repaid and the applicant instituted a suit for its recovery against them which was decreed by this court on November 1, 1985. A preliminary decree for recovery of Rs. 69,19,208. 76 was passed in favour of the applicant and against the respondents jointly and severally with costs and interest at the rate of 12% per annum from the date of the institution of the suit till the date of realisation. It was also ordered that the decretal amount be paid within four months, failing which the applicant would be entitled to apply to the court for a final decree for sale of the mortgaged properties. The Haryana Financial Corporation had also advanced loans to respondent No. 1. It instituted a suit for recovery of the loan against respondent No. 1 which was decreed on December 3, 1981. In pursuance of that decree, the Haryana Financial Corporation filed a company application for recovery of the decretal amount in this court. In that application it was agreed between the Haryana Financial Corporation and the bank that out of the sale proceeds of the property, 3/4ths be given to the former and the remaining 1/4th to the latter.

(2.) THE property was got auctioned by this court through the District Judge, Sonepat. Out of the price fetched by sale of the property, expenses of the auction and fee of the auctioneer were paid to the court-auctioneer and 1% of the auction money was credited to the Government. Out of the balance amount, 3/4ths was paid to the Haryana Financial Corporation and remaining 1/4th, the share of the applicant-bank, was sent to this court. The suit of the applicant was pending in this court at that time and the amount was to be paid to it, if the suit was decreed in its favour. The suit was decreed in favour of the applicant on November 1, 1985. as mentioned above. The applicant has now moved this court requesting that its share of sale proceeds be paid to it. The application has been, opposed by the official liquidator.

(3.) MR. Verma, learned counsel for the official liquidator, contends that under Section 451 of the Companies Act, the Central Government is entitled to the prescribed fee out of the said proceeds as the official liquidator started acting as liquidator. He has also made reference to Rule 291 (4) of the Companies (Court) Rules, 1959.