Judgment :- 1. Imperial Chit Funds Private Ltd. was doing the business of conducting kuries and for the proper conduct of those kuries had to furnish security under the Travancore Chitties Act and Rules with the Registrar of Chitties. For that the company had made certain fixed deposits in the South Indian Bank Ltd. at its branches at Ernakulam, Cochin and Tripunithura and the receipts the details of which are furnished hereunder: were furnished as security at the time of registration of the various kuries. The charges thus created with the Chitty Registrar over the said deposits had all been registered as required under the provisions of S.125 of the Companies Act in favour of the respective kuri creditors. The company was wound up as per order of this Court in CP. No. 7 of 1973 on 1-6-1973. As per order in application 472 of 1973 this Court directed the Chitty Registrar to release the securities furnished by the company. The fixed deposit receipts stated as serial numbers 1 to 4 and 6 were got back on 27-4-1974 and No 5 on 5-3-1975. The amount as per receipt mentioned as Sl. No. 6 has been paid to the Official Liquidator. When the fixed deposit receipts serialled as numbers 1 to 5 were sent for realisation, the South Indian Bank Ltd. objected on the ground that the amount covered by receipts stated as Sl. No. 5 is under attachment in suits filed against the company before the Sub Court and Munsiff's Court, Ernakulam and that the deposits as per receipts stated as Sl. Nos.1 to 3 have been charged with the bank under an overdraft account opened by the company. Consequently the Official Liquidator filed an application 120 of 1975 for raising the attachment effected through civil courts and also to direct the South Indian Bank to effect payment of the amount due to the company under the fixed deposits receipts stated as Sl. Nos.1 to 5 above and also to direct the South Indian Bank to pay interest at contract rate till the date of payment since the bank withheld the amount on the ground that it has got a charge over the fixed deposit receipts. That application was heard by this Court and by order dated 9th January, 1976, the Liquidator's application was allowed. That application was heard by this Court and by order dated 9th January, 1976, the Liquidator's application was allowed. The South Indian Bank Ltd, though was one of the respondents to that application, did not enter appearance to contest. When the Liquidator again asked the bank to pay the amount the bank has come with the present application No. 219 of 1976 to set aside the order dated 9-1-1976 and to rehear application 120/75 insofar as the earlier order directed the bank to pay the amounts covered by the fixed deposits and interest till date. 2. The bank contends that by an oversight the notice sent from this Court and received by the branch office at Trichur was not forwarded to the legal department of the bank which is in charge of all the litigations to which the bank figures as a party, and as a result the bank was not able to take proper steps to defend the application. On the merits the objections taken to the Liquidator's claim are three-fold Fixed deposit receipts serialled as Nos.1 to 3 above are subject of a second charge to the bank for enabling the company to operate an overdraft account and in ordering the bank to pay the amount to the Liquidator sufficient safeguards have to be made to make available to the Bank the surplus funds if any covered by those fixed deposit receipts after payment of the chitty creditors in the chitties for which those fixed deposits were offered as security with the Chitty Registrar. Another contention is that the fixed deposit with the Ernakulam branch, namely Sl. No.1 above, matured for payment on 15-9-1972 and all the interests on that deposit up to that date has been paid to the company long before it was wound up and under the contract no interest is payable for the amount covered by that receipt after it matured for payment. The fixed deposit serialled as item No. 5 with the branch at Tripunithura matured for payment on 17-2-1975. Interest thereon till the winding up was mainly credited to the overdraft account and on occasions paid to the current account of the company and withdrawn before the winding up. The fixed deposit serialled as item No. 5 with the branch at Tripunithura matured for payment on 17-2-1975. Interest thereon till the winding up was mainly credited to the overdraft account and on occasions paid to the current account of the company and withdrawn before the winding up. The bank has a lien on the interest accruing and in exercise of that lien the interests falling due after winding up also has been appropriated towards liability under the overdraft account and the company's liability has been reduced to that extent. The same has been done in respect of the fixed deposits in the Mattancherry branch serialled as items 2 to 4 Under the law of banking and the practice in all the banks, it is contended, the bank is entitled to consolidate the amounts to the said creditor in all the branches and set off the amount so due from the bank against the overdraft liability of the company. The third contention is that the hank is entitled to claim interest on the secured debts even after the order for winding up of the debtor company and to adjust the amount due from the bank against the liability of company to the bank. 3. The Official Liquidator opposes this application only on the contentions of the bank raised on the merits. The validity of the second charge claimed over fixed deposit receipts serialled as 1 to 3 is disputed inasmuch as provisions of S.125 of the Companies Act have not been followed and as such the charge is not binding on the company or the Liquidator. Secondly it is contended that the interest on the fixed deposit after the commencement of the winding up cannot be set off against any amount alleged to be due to the bank from the company; and thirdly the bank is not entitled to claim any interest on the amount alleged to be due to it after the commencement of the winding up, of the company. 4. Since the Official Liquidator does not deny the reasons mentioned by the bank for its failure to contest application No.120 of 1975 the claim of the bank is considered on the merits and to that extent it is ordered that the order of this Court dated 9-1-1976 will not be taken'as a bar. 4. Since the Official Liquidator does not deny the reasons mentioned by the bank for its failure to contest application No.120 of 1975 the claim of the bank is considered on the merits and to that extent it is ordered that the order of this Court dated 9-1-1976 will not be taken'as a bar. It is now admitted that with the permission of this Court the bank has filed a suit, O. S. No. 43 of 1975, for the balance of the amount alleged to be due to it from the company. Therefore, it is not necessary at this stage to pronounce upon the validity of the claim for a second charge on the fixed deposits stated as Sl. Nos.1 to 3 which is opposed by the Liquidator as unsustainable in view of the violation of S.125 of the Companies Act and other provisions of law. The same is the position with reference to the third claim of the bank, namely that it is entitled to interest even after the commencement of the winding up on the debt alleged to be secured as above. This claim mainly flows out of the first claim of the bank, that it is a secured creditor. These matters can be conveniently gone into in the original suit that is now pending between the parties and therefore they are left open for decision in that suit. 5. The third and the important point canvassed for consideration at this stage is whether the bank is entitled to set off the interest which accrued due on the fixed deposits after the commencement of the winding up against the overdraft liability of the company to the bank. According to the Liquidator the income which accrues to the company after the commencement of the winding up is not available for set off against any liability of the bank before it was ordered to be wound up. In support of that Liquidator relies on the decision of the Supreme Court in J.K. (Bom.) P. Ltd. v. New Kaiser-I-Hind Sp. & Wvg. Co. (AIR 1970 S. C. 1041). In support of that Liquidator relies on the decision of the Supreme Court in J.K. (Bom.) P. Ltd. v. New Kaiser-I-Hind Sp. & Wvg. Co. (AIR 1970 S. C. 1041). At page 1058, Para.39, it is observed thus: "It is thus well established that once a winding-up order is passed the undertaking and the assets of the company pass under the control of the liquidator whose statutory duty is to realise them and to pay from out of the sale-proceeds its creditors Such creditors acquire on such order being passed the right to have the assets realised and distributed among them pari passu. No new rights can thereafter be created and no uncompleted rights can be completed, for doing so would be contrary to the creditors' right to have the proceeds of the assets distributed among them pari passu " As against this the counsel for the bank contends that under the law of banking the banker has got a lien on the securities and amounts due to the customer under another account to satisfy the liability of the customer in one account and that right survives even after the debtor company has been ordered to be wound up. According to him, the order for winding up does not affect his right of set off. It is difficult to say in ordinary cases that money could be subject of a lien. It would usually be incapable of identification and the application of the principle of lien to money paid into the bank is complicated by the consideration that such money constitutes a mere debt of equivalent amount from the banker to the customer and the debt is not a suitable subject for a lien. Then the question is whether the banker's right on the doctrine and rule of law which authorises the setting off of one debt against another is available to the bank. But it is doubtful whether a debt incurred after liquidation of the company can be set off against a liability before its winding up. Then the question is whether the banker's right on the doctrine and rule of law which authorises the setting off of one debt against another is available to the bank. But it is doubtful whether a debt incurred after liquidation of the company can be set off against a liability before its winding up. Really the interest on a fixed deposit amount is an accretion to it and as a right of set off is not applicable to the deposit amount inasmuch as it is subject of a security to the Chitty creditors the interest accruing to it is also not available for set off unless there was an agreement express or implied to pay interest separately. Such an agreement can be implied from the previous course of conduct of the bank and the company. So the adjustment of the interest accrued before the winding up of the company against the company's overdraft liability may not be open to attack. But that is not the position after the order for winding up, The entire assets of the company have by virtue of S.456 (2) of the Companies Act gone into the legal custody of the Court and the interest accruing on the fixed deposits thereafter is the income of the company subsequent to the winding up. Under S.468 of the Act the liquidator is entitled to call upon the bank to pay that amount. It is an asset over which the creditors of the company have a right for distribution pari passu. The right of set off of this amount is not available to the bank. If allowed that will be a recognition of a right different from the statutory right of pari passu distribution recognised under the Companies Act and by the Supreme Court in the decision quoted above. Hence it is not acceptable. The principle of the decision of the House of Lords in Westminster Bank v. Halesowen Ltd. (1972 (1) All. E. R.641) has no application to the facts of this case. In that case the question was whether the right of set off available under the statute can be agreed to be waived by the debtor of the insolvent company who has a claim against the company. E. R.641) has no application to the facts of this case. In that case the question was whether the right of set off available under the statute can be agreed to be waived by the debtor of the insolvent company who has a claim against the company. There the debtor Bank had received the cheque for collection before the winding up and the amount collected later was allowed to be set off on the ground that the agreement to keep the credit account separate did not affect the right of set off on insolvency. The facts here are different. Therefore, I am satisfied that the bank is not entitled to set off the interest that accrued due after the winding up order against the overdraft liability of the company incurred before the winding up. 6. In the result, I direct the applicant bank to pay forthwith to the Liquidator the amounts covered by the fixed deposit receipts serialled as items 1 to 5 above, and also the interest thereon that accrued due after the date of the winding up order till the fixed deposits matured for payment. The bank has unreasonably delayed payment of the fixed deposit amounts. Hence the bank shall also pay interest at 6% on Rs. 1,40,000/- from 9-1-1976 till the payment of the above amount to the Liquidator. If after paying the chitty creditors to whom fixed deposit Nos.1 to 3 are secured there is any balance amount from the deposits serialled as 1 to 3 above, the Liquidator will keep that separate and take orders from the Court as whether that should be made available to the applicant to satisfy his claim for a second charge. The Liquidator will forward the fixed deposit receipts to the bank forthwith if it has not already been done. No costs.