Andhra Pradesh High Court on section 529A of Companies Act,
Last updated: 11 May 2008
Court :
High Court
Brief :
Section 529A, read with section 457 of Companies Act, 1956 - Overriding preferential payments - Applicants were secured creditors of respondent company which was ordered to be wound up - As ordered by Court, Official liquidator sold assets of company and realised certain amount - When liquidation proceedings were pending, applicants filed instant application seeking direction of court to official liquidator to disburse 50 per cent of realised amount towards dues of interest - Whether since no provision of law had been brought to notice of Court, which conferred jurisdiction on court to grant interim payment, instant application was not maintainable - Held, yes - Whether, furthermore, in view of fact that claims made by secured creditors as well as workers were under adjudication and in such a situation even if interim order was passed in exercise of inherent jurisdiction, same would result in denying right of workers to claim their dues and also render section 529A ineffective - Held, yes - Whether, consequently, instant application being devoid of merit was to be dismissed - Held, yes
Citation :
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CA Pawan Goswami
Published in Corporate Law
Views : 62
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