JUDGMENT 1. - Madhu Chemicals Centre, Bikaner, has filed this company petition under section 433(e) read with section 439, Companies Act, 1956 (hereinafter to be called the Act) for the winding up of the Standard Woollens Ltd., Jodhpur (hereinafter called the respondent company). After observing necessary formalities, the petition for winding up was allowed and the respondent company was ordered to be wound-up. On 28 October, 1985, it was further ordered that the official liquidator shall proceed to take action in respect of the properties whose possession has not been taken over by the Rajasthan Financial Corporation (in short RFC) under section 29, State Financial Corporation Act, 1951 (hereinafter to be called the Act of 1951). On 20 December, 1987, the secured creditors, namely, Rajasthan State Industrial Development and Investments Corporation, Industrial Finance Corporation of India and State Bank of Bikaner and Jaipur also intimated for remaining outside liquidation vide their application dated 29 August, 1985. 2. On 25 February, 1986, the official liquidator moved application, paper No. A8/1-7, for restraining the RFC from disposing of the properties of the respondent company and to allow him to do so as secured creditors cannot remain outside liquidation. On 7 April, 1986, RFC was directed not to auction the properties. RFC filed its reply, paper No. A9/1-10, on 14 May, 1986. By order dated 22 May, 1986, the RFC was permitted to auction the properties of the respondent company. It was ordered on 9 January, 1987, that RFC may auction the properties after wide publicity, but the bid will not be accepted without the approval of the court. On 16 January, 1987, the official liquidator moved application, paper No. A23/1-5, for deciding the following questions : "(a) whether the secured creditors of the company in liquidation, ordered to be wound up by the court, can be allowed to remain outside liquidation proceedings. (b) whether the secured creditor of the company in liquidation is also bound to prove its rank and extent of claim before the official liquidator in accordance with sections 528 to 537, Chapter V Part VII of the Companies Act, 1956. (b) whether the secured creditor of the company in liquidation is also bound to prove its rank and extent of claim before the official liquidator in accordance with sections 528 to 537, Chapter V Part VII of the Companies Act, 1956. (c) whether the provisions of State Financial Corporation Act, 1951, particularly, section 29 read with section 46B of the said Act which empower the Financial Corporation to take over the possession of the securities or assets in its charge and to dispose them of in order to satisfy its claim against the company are in conflict with the various provisions of the Companies Act, 1956, regarding the winding up by the Court. (d) whether the provisions of the State Financial Corporation Act, 1951, if the answer of question (c) above is in affirmative, can override the provisions of the Companies Act, 1956, regarding winding up of a company. (e) whether it will be otherwise prejudicial to the interest of the workmen and other creditors of the company in liquidation, if the secured creditors are allowed to remain outside liquidation and dispose of securities or properties of the company held by them and satisfy their claims and dues." 3. Arguments of the learned counsel for the parties have been heard on these questions.Question No. (a) 4. Section 529 of the Act clearly provides that secured creditors instead of proving their debts may opt to realise their security. The question No. (a) is accordingly answered.Questions No. (b) and (c) 5. The secured creditors are not required to prove their claims before the official liquidator. The secured creditor who has a charge or lien on the property of the company or has security for his debt may sell the property and prove in the winding up for the balance of his debt. 6. Sub-section (1) of section 29 of the Act of 1951 runs as under : "29. Rights of Financial Corporation in case of default. 6. Sub-section (1) of section 29 of the Act of 1951 runs as under : "29. Rights of Financial Corporation in case of default. Where any industrial concern, which is under an agreement, makes any default in repayment of any loan or advance or any instalment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the financial corporation, the Financial Corporation shall have the right to take over the management or possession or both of the industrial concern, as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation." 7. Section 46B of the Act of 1951 runs as under : "46-B. Effect of Act on other laws.-The provisions of this Act and of any rules or orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act, but save as aforesaid, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern." 8. It is clear from the above quoted provisions of section 46-B that the Act of 1951 has overriding effect. The secured creditors are not required to prove their claims and also their priority. The provisions of section 29 and 46-B are not in any way in conflict with any provision of the Companies Act. They can sell the properties of company without permission of the court. Reference of M.K. Ranganathan v. Government of Madras, AIR 1955 SC 604 : (1955) 25 Comp Cas 344 (SC) , Official Liquidator v. United Commercial Bank (1994) 4 Comp LJ 435 (Bom) : AIR 1992 Born 167 , Boolani Engineering Corporation v. M/s. Asup Synthetics and Chemicals Ltd. 1990 (1) RLR 10 and Maharashtra State Financial Corporation v. Ballapur Industries Ltd. (1995) 2 Comp LJ 162 (Bom) : AIR 1993 Born 392 may be made here. The question Nos. (b) and (c) are accordingly answered in favour of the secured creditors.Question No. (d) 9. The question Nos. (b) and (c) are accordingly answered in favour of the secured creditors.Question No. (d) 9. In view of the aforesaid answer of the question No. (b) and (c), the question No. (d) does not arise.Question No. (e) 10. It is correct that the secured creditors can sell the properties of the company in liquidation and appropriate the sale proceeds towards their dues. It will, however, prejudice the case of the unsecured creditors. The claims of the workmen are pari passu with the claims of the secured creditors vide sections 529 and 529A of the Act. 11. As already observed above, the official liquidator was directed to take charge of the properties of the respondent company which have not been taken over by the RFC. In exercise of its power under section 29 of the Act of 1951, the RFC took over the properties of the respondent company and auctioned them after wide publicity. Geel Industries, Rani Bazar, Bikaner and Laxmi Industries, Industrial Area, Bikaner gave the highest bid for Rs. 46,01,001 (forty six lakhs and one thousand one) for the first lot of the properties and the official liquidator had no objection in accepting this bid vide order sheet dated 9 June, 1989. Neha Proteins (P) Ltd., Jodhpur, gave the highest bid of Rs. 42,00,000 (forty two lakhs) for the second lot (remaining) properties of the respondent company taken in custody by the RFC. The papers were duly examined by the official liquidator, but he could not find any objection. This highest bid was also accepted vide order sheet dated 17 July, 1990. It was made clear that the outstanding dues of the RIICO (other than the loans), R.S.E.B. and P.H.E.D. will be paid by the purchaser, Neha Proteins (P) Ltd., Jodhpur. 12. The official liquidator could not submit any claim in respect of the workmen. The directors of the respondent company did not even furnish statutory statements and returns. On 12 September, 1986, it was directed that the RFC would make available necessary record to the official liquidator relating to the workmen in respect of their dues, i.e., of salary, provident fund, gratuity, bonus, etc. The directors of the respondent company did not even furnish statutory statements and returns. On 12 September, 1986, it was directed that the RFC would make available necessary record to the official liquidator relating to the workmen in respect of their dues, i.e., of salary, provident fund, gratuity, bonus, etc. On 9 January, 1987, the learned counsel for the official liquidator stated no record relating to the workmen's dues was found in the premises of the respondent company and the record handed over by the RFC did not relate to their dues. The dues of the workmen have thus remained unascertainable. No workman has come forward with his claim. 13. The order sheets of 25 February, 1988, and 29 March, 1988, show that the official liquidator auctioned the furniture and other goods of the respondent company for Rs. 2,000 and Rs. 16,000, respectively. These amounts will be utilised in making payments to the secured creditors after deducting the amounts of expenses incurred by the official liquidator. 14. The debts of the respondent company were much in excess of the aforesaid amounts. After the auction of the properties mentioned in paras No. 11 and 13, no more assets of the respondent company remained. As such, there is no other alternative, but to dissolve the respondent company under section 481 of the Act. 15. Accordingly, the amounts of Rs. 46.01 and 42 lakhs received by the RFC in the said auction proceedings (para 11) and the balance of the amount of Rs. 18,000 (para No. 13) will be divided amongst the RFC, Rajasthan State Industrial Development and Investments Corporation (RIICO), Industrial Finance Corporation of India and State Bank of Bikaner and Jaipur in the proportion in which their debts were out- standings. The amounts so received by them will have the charge of the claims of the workmen of the respondent company as stated in para No. 10, supra, if claimed within five years from today. 16. Standard Woollens Limited, Jodhpur (under liquidation) (respondent company) is hereby dissolved. A copy of this order be sent to the Registrar of Companies, Rajasthan, Jaipur. *******