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2001 DIGILAW 898 (PNJ)

MSTC Ltd. v. Shree Diwan Steels (India) Ltd.

2001-08-22

JAGDISH SINGH KHEHAR

body2001
JUDGMENT J.S. Khehar, J. - M/s MSTC Ltd, the petitioner, is a government Company incorporated under Section 617 of the Companies Act, 1956, the Government of India holds about 90% of its shares. The registered office of the petitioner company is located in Calcutta. According to the averments made in the petition, the petitioner-company is carrying on the business of import, selling, auctioning of various categories of scraps, materials and allied products to various customers like government departments, corporations, companies, firms and individuals throughout the country. 2. M/s Shree Diwan Steels (India) Ltd., the respondent-company had its registered office at Ludhiana. M/s. Surjit Finance Ltd. filed Company Petition No. 96 of 1997 praying for the winding up of M/s. Shree Diwan Steels (India) Ltd. i.e. the respondent company under Section 433 (e) and (f) of the Companies Act, 1956 on 3.7.1997. On 10.2.1999, Company Petition No. 96 of 1997 was allowed by the passing of a winding up order against M/s. Shree Diwan Steels (India) Ltd., i.e. the respondent-company. The Official Liquidator attached to this Court was appointed as the Liquidator to take charge of the respondent-company, its properties, assets and records. It would he pertinent to mention that M/s. MSTC Ltd., the petitioner-company had also filed a winding up petition against the respondent-company, i.e. Company Petition No. 40 of 1997. The winding up petition filed by the petitioner-company was disposed of on 10.2.1999 in view of the order passed in Company Petition No. 96 of 1997. 3. After the winding up order had been passed, the liquidator was required to satisfy the liabilities of the creditors (to the extent possible) out of the assets of the company (wound up). The prayer of M/s. MSTC Ltd. i.e. the petitioner in the instant case is that certain properties should be excluded from the assets of M/s. Shree Diwan Steels (India) Ltd., while satisfying debts due to creditors other than the petitioner-company claims exclusive right for the satisfaction of its claim from the respondent-company out of some of the assets of the respondent-company. The assets of the respondent- company over which the petitioner-company claims exclusive rights are the properties of the respondent-company, which were ordered to be attached by the Distt. Judge, Ludhiana in Criminal Misc. No. 409-A/28.9.1998 vide order dated 28.9.1998 as well as the properties of the respondent-company attached by the Delhi High Court vide order dated 17.11.1998. The assets of the respondent- company over which the petitioner-company claims exclusive rights are the properties of the respondent-company, which were ordered to be attached by the Distt. Judge, Ludhiana in Criminal Misc. No. 409-A/28.9.1998 vide order dated 28.9.1998 as well as the properties of the respondent-company attached by the Delhi High Court vide order dated 17.11.1998. The details of the basis on which the petitioner-company has made the aforesaid claim are being narrated in the following paragraphs. 4. M/s Shree Diwan Steels (India) Ltd., i.e. the respondent-company through its Directors entered into a contract for the purchase of 1000 MT of scrap. The aforesaid agreement was executed between the parties at the regional office the petitioner-company located in New Delhi in December, 1995. On the basis of an understanding between the parties, the respondent-company issued post-dated cheques to the petitioner-company towards the payment of the said scrap. In all three cheques were issued. Two of the said cheques each valuing Rs. 32, 76, 000/- dated 27.4.1996 and 20.7.1996 were in lieu of the purchased material, whereas the third cheque valuing Rs. 96, 935/- dated 30.4.196 was towards interest on account of deferred payment. 5. Consequent upon the receipt of the post-dated cheques, the petitioner- company on 12.1.1996 sent through courier all the required shipping documents. On the basis of the said shipping documents, M/s. Shree Diwan Steels (India) Ltd., i.e. the respondent-company received the delivery of scrap from the Kandla Port. 6. It would be pertinent to mention that the respondent-company furnished a corporate guarantee and in addition thereto the Managing Director of the respondent-company executed a personal guarantee bond wherein it was agreed that the Managing Director of the respondent-company would be responsible for payment of the liability incurred as a consequence of the aforesaid sale of 1000 MT of scrap to the petitioner-company i.e. for the principal amount of Rs. 65, 52, 000/-. 7. When the three cheques referred to above were presented for encashment, it was discovered that the respondent-company had issued instructions to their banker to stop payment against the said cheques. Thereupon, the petitioner- company issued a notice under Section 138 of the Negotiable Instruments Act, 1881 (as amended) to the respondent-company. 65, 52, 000/-. 7. When the three cheques referred to above were presented for encashment, it was discovered that the respondent-company had issued instructions to their banker to stop payment against the said cheques. Thereupon, the petitioner- company issued a notice under Section 138 of the Negotiable Instruments Act, 1881 (as amended) to the respondent-company. The petitioner-respondent then filed criminal complaints against the respondent-company and its Directors before the Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi under Sections 403, 406 and 420/34 of the Indian Penal Code as the respondent-company did not make any payments despite the aforesaid notice. The aforesaid proceedings are stated to be pending even now. 8. In addition to the criminal complaints filed by the petitioner-company, it initiated proceedings under the Criminal Law (Amendment) Ordinance, 1944 (hereinafter referred to as the "1944 Ordinance"). The aforesaid proceedings were initiated before the District Judge, Ludhiana on 26.9.1998. The same came to be registered as Criminal Misc. No. 409-A/28.9.1998. On 28.9.1998, the District Judge, Ludhiana passed an ad-interim attachment order in respect of the properties of the respondent-company mentioned in the schedule to the extent of Rs. 1.50 Crore. 9. Still further, the petitioner-company filed a summary suit under Order 37 of the Code of Civil Procedure against the respondent-company and its Directors for the recovery of Rs. 1.50 Crore in the Delhi High Court on 8.11.1998. Alongwith the aforesaid summary suit, the petitioner-company moved an application under Order 38 Rule 5 praying for the attachment of the properties of the respondent-company before judgment, and another application under Order 39 Rules 1 and 2 of the Code of Civil Procedure with a prayer that the respondent-company and its Directors be restrained from creating any third party interest in the properties mentioned in the schedule. It is not a matter of dispute between the parties that the Delhi High Court in furtherance of the applications filed by the petitioner-company ordered attachment of the properties indicated in the schedule. 10. It is not a matter of dispute between the parties that the Delhi High Court in furtherance of the applications filed by the petitioner-company ordered attachment of the properties indicated in the schedule. 10. The question to be determined in the controversy raised by the petitioner-company is whether the properties of the respondent-company mentioned in the schedule in respect of which the District Judge, Ludhiana passed an order of attachment on 28.9.1998 and the properties of the respondent-company in respect of which the Delhi High Court passed an order of attachment dated 17.11.1998 as per the details narrated above can be utilised for disbursement to all the creditors of the respondent-company, or must be exclusively applied to discharge the debt owed by the respondent-company to the petitioner-company. 11. The first contention of the learned counsel for the petitioner-company is that the order of attachment passed by the Delhi High Court in the summary suit filed by the petitioner-company under Order 37 of the Code of Civil Procedure against the respondent-company and its directors for the recovery of Rs. 1.50 crores would have the effect of creating a charge in favour of the petitioner-company. It is contended that the debts due to the petitioner- company must be deemed to be secured as against the properties of the respondent-company attached by the aforesaid order. As such, it is submitted that the order of the Delhi High dated 17.11.1998 passed under Order 37 Rule 5 had the effect of vesting in the petitioner-company the status of a secured creditor in respect of the property attached by the aforesaid order. In my view, the answer to the aforesaid question emerges from Rule 54 of Order 21 of the Code of Civil The aforesaid rule is being extracted hereunder : "54. Attachment of immovable property :- (1) where the property is immovable, the attachment shall be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge. [(1-A) The order shall also require the judgment-debtor to attend Court on specified date to take notice of the date to be fixed for setting the terms of the proclamation of sale.] 2. [(1-A) The order shall also require the judgment-debtor to attend Court on specified date to take notice of the date to be fixed for setting the terms of the proclamation of sale.] 2. The order shall be proclaimed at some place or, or adjacent to such property by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and then upon a conspicuous part of the Court-house, and also where the property is land- paying revenue to the Government, in the office of the Collector of the district in which the land is situate [and, where the property is land situate in a village, also in the office of the Gram Panchayat, if any, having jurisdiction over that village;] [Where the property is land situated in cantonment. copies of the order shall also be forwarded to the Cantonment Board and to the Military Estate Officer in whose area Cantonment is situated] [(3) The order shall take effect as against the persons claiming under a gratuitous (gratuitous ?) transfer from the judgment-debtor, from the date of the order of attachment, and as against others from the time they had knowledge of the passing of the order of attachment or from the date of proclamation, whichever is earlier.]" 12. After the perusal of the aforesaid rule, it clearly emerges that the only effect of an order of attachment is that the property attached cannot be transferred by its owner nor a third party right can be created therein by the owners. In other words, no right whatsoever, is created in the decree-holder vis-a-vis the property attached. It is, therefore, natural to conclude that an order of attachment creates no interest in favour of the decree-holder. Mulla in the Code of Civil Procedure, 13th edition at page No. 318 has observed as under : "Attachment creates no charge or lien upon the attached property. It only confers a right on the decree-holder to have the attached property kept in custodian legis (Custodia legis ?) for being dealt with by the court in accordance with law. It merely prevents and avoids private alienations; it does not confer any title on the attaching-creditors." 13. It only confers a right on the decree-holder to have the attached property kept in custodian legis (Custodia legis ?) for being dealt with by the court in accordance with law. It merely prevents and avoids private alienations; it does not confer any title on the attaching-creditors." 13. On the basis of the provisions of rule 54 of order XXI Code of Civil Procedure, it is clear that no charge is created merely by an order of attachment passed by a court. Thus viewed, it is concluded that no prefential rights can be deemed to have been created in favour of the petitioner-company on the basis of the order passed by the Delhi High Court on 17.11.1998. A conclusion to the same effect was arrived at by this court in Company Petition No. 174 of 2000 titled as "H.S. Oberoi and Associates v. Punjab Wireless Systems Ltd." decided on 11.7.2001. 14. In so far as the effect of the attachment order passed by the Distt. Judge, Ludhiana 28.9.1998 is concerned, learned counsel for the petitioner- company submitted that the 1944 Ordinance was promulgated under Section 72 of the Government of India Act, 1915 by the Governor General. The 1944 Ordinance became law of the land under Article 372(1) of the Constitution of India, which expressly provided that all laws in force in the territory of India immediately before the commencement of the Constitution of India would remain in force until alterred/repealed/amended by a competent legislature/authority. It has also been brought to the notice of this Court that the validity of the 1944 Ordinance has been upheld by a Constitution Bench of the Supreme Court in State of West Bengal v. S.K. Ghosh, AIR 1963 SC 255 and also by this Court in G.L. Salwan v. Union of India, AIR 1960 Punjab 351. It is pertinent to mention that the learned counsel for the respondent-company did not dispute the assertions made by the learned counsel for the petitioner-company in respect of the validity of the 1944 Ordinance. In view of the position expressed above, there is certainly no impediment in determining the claim of the petitioner-company, by accepting that the 1944 Ordinance is valid and has the force of law. 15. The provisions of the 1944 Ordinance are applicable only in respect of certain offences. In view of the position expressed above, there is certainly no impediment in determining the claim of the petitioner-company, by accepting that the 1944 Ordinance is valid and has the force of law. 15. The provisions of the 1944 Ordinance are applicable only in respect of certain offences. The offences in respect of which the Ordinance is applicable have been delineated in the schedule attached thereto. A perusal of the schedule reveals that the 1944 Ordinance is applicable inter alia in respect of offences punishable under Sections 406 and 420 of the Indian Penal Code subject to the overriding condition that the offence should have been committed against the Central/State Government, or persons acting on behalf of any such Government. In view of the fact that proceedings initiated by the petitioner-company (wherein the Government of India has 90% shares) against the respondent-company detailed above, are admittedly pending before the Addl. Chief Metropolitan Magistrate, Patiala House Courts, New Delhi, there can be no dispute about the fact that the provisions of 1944 Ordinance would be applicable to a claim set up by the petitioner-company against the respondent-company. In fact there is no controversy between the parties on this issue as well. The respondent-company accepted the order passed against it by the Distt. Judge, Ludhiana. Even now, there is no challenge to the validity of the order passed by the Distt. Judge, Ludhiana under Section 4 of the 1944 Ordinance on 28.9.1998. 16. Section 3 of the 1944 Ordinance postulates that if the Central Government has reasons to believe that someone has committed an offence mentioned in the schedule, it may make an application to the Distt. Judge (within the legal limits of whose jurisdiction the said person resides or carries on business) for an order of an attachment of his property equivalent in money value which the Central Government believes the person in question has procured consequent upon the commission of the said offence. In this behalf, it is pointed out by the learned counsel for the petitioner-company that an application under section 3 of the 1944 Ordinance was moved by the petitioner-company, wherein the Distt. Judge, Ludhiana on 28.9.1998 passed an ad-interim order of attachment under section 4 after accepting the claim of the petitioner-company under section 3. The court has been informed that the order of attachment passed by the Distt. Judge, Ludhiana on 28.9.1998 passed an ad-interim order of attachment under section 4 after accepting the claim of the petitioner-company under section 3. The court has been informed that the order of attachment passed by the Distt. Judge, Ludhiana, has become final as the same was not challenged by the respondent-company. 17. It is submitted by the learned counsel for the petitioner-company that by the aforesaid order of the Distt. Judge, Ludhiana dated 28.9.1998, the property of the respondent-company mentioned in the schedule appended to the said petition, was attached to the extent of Rs. 1.50 Crore. It is further pointed out that the aforesaid order has not been varied, withdrawn, modified or revoked till date. It is contended that the aforesaid property must be deemed to be attached so as to secure the claim of the petitioner-company to the extent of Rs. 1.50 Crore. The case made out on behalf of the petitioner- company is that the order of attachment passed by the District Judge, Ludhiana on 28.9.1998 when read with Sections 12 and 13 of the 1944 Ordinance would lead to the conclusion that the order of the District Judge creates a charge on the attached property whereby the petitioner-company has the right to effect the recovery of the value of the goods obtained by the respondent- company from the petitioner-company by the commission of offences mentioned in the schedule. Sections 12 and 13 of the 1944 Ordinance are being extracted hereunder for facility of reference: "12. Criminal Courts to evaluate property procured by scheduled offences :- (1) Where before judgment is pronounced in any criminal trial for a scheduled offence it is represented to the Court that an order of attachment of property has been passed under this Ordinance in connection with such offence, the Court shall, if it is convicting the accused, record a finding as to the amount of money or value of other property procured by the accused by means of the offence. (2) In any appeal or revisional proceedings against such conviction, the appellate or revisional Court shall unless it sets aside the conviction, either confirm such finding or modify it in such manner as it thinks proper. (2) In any appeal or revisional proceedings against such conviction, the appellate or revisional Court shall unless it sets aside the conviction, either confirm such finding or modify it in such manner as it thinks proper. (3) In any appeal or revisional proceedings against an order of acquittal passed in a trial, such as is referred to in sub-section (1), the Appellate or revisional Court, if it convicts the accused, shall record a finding, such as is referred to in that sub-section. (4) Where the accused is convicted of schedule offence other than one specified in Item 1 of the Schedule to this Ordinance and where it appears that the offence has caused loss to more than one Government referred to in the said schedule or local authority the finding referred to in this section shall indicate the amount of loss sustained by each such Government or local authority. (5) Where the accused is convicted at the same trial of one or more offences specified in Item 1 of the Schedule to this Ordinance and of one or more offences specified in any of the other items of the said Schedule, the finding referred to in this section shall indicate separately the amounts procured by means of the two classes of offences. 13. Disposal of attached property upon termination of criminal proceedings :- (1) Upon the termination of any criminal proceedings for any scheduled offence in respect of which any order of attachment of property has been made under this Ordinance or security given in lieu thereof, the agent of the State Government or, as the case may be, the Central Government shall, without delay inform the District Judge, and shall where criminal proceedings have been taken in any Court, furnish the District Judge with a copy of the judgment or order of the trying Court and with copies of the judgment or orders, if any, of the appellate or revisional Court thereon. (2) Where it is reported to the District Judge under sub-section (1) that cognizance of the alleged scheduled offence has not been taken or where the final judgment or order of the Criminal Court is one of acquittal, the District Judge shall forthwith withdraw any orders of attachment of property made in connection with the offence, or where security has been given in lieu of such attachment, order such security to be returned. (3) Where the final judgment or order of the Criminal Court is one of conviction, the District Judge shall order that from the property of the convicted person attached under this Ordinance or out of the security given in lieu of such attachment, there shall be forfeited to Government such amount or value as is found in the final judgment or order of the Criminal Courts in pursuance of Section 12 to have been procured by the convicted person by means of the offence, together with the costs of attachment as determined by the District Judge and where the final judgment or order of the Criminal Courts has been imposed or upheld a sentence of fine on the said person (whether alone or in conjunction with any other punishment), the District Judge may order, without prejudice to any other mode of recovery, that the said fine shall be recovered from the residue of the said attached property of the security given in lieu of attachment. (4) Where the amounts ordered to be forfeited or recovered under sub-section (3) exceed the value of the property of the convicted person attached, and where the property of any transferee of the convicted person has been attached under section 6, the District Judge shall order that the balance of the amount ordered to be forfeited under sub-section (3) together with the costs of attachment of the transferees property as determined by the District Judge shall be forfeited to Government from the attached property of the transferee or out of the security given in lieu of such attachment; and the District Judge may order without prejudice to any other mode of recovery that any fine referred to in sub-section (3) or any portion thereof not recovered under that sub-section shall be recovered from the attached property of the transferee or out of security given in lieu of such attachment. (5) If any property remains under attachment in respect of any scheduled offence or any security given in lieu of such attachment remains with the District Judge after his orders under sub-sections (3) and (4) have been carried into effect, the attachment in respect of such property remaining shall be forthwith withdrawn or as the case may be, the remainder of the security returned, under the orders of the District Judge. (6) Every sum ordered to be forfeited under this section in connection with any scheduled offence other than one specified in Item 1 of the schedule to this Ordinance shall, after deduction of the costs of attachment as determined by the District Judge be credited to the Government being a Government referred to in the said schedule or local authority to which the offence has caused loss, or where there is more than one such Government or local authority, the sum shall, after such deduction as aforesaid, be distributed among them in proportion to the loss sustained by each." 18. The effect of an order of attachment under the 1944 Ordinance is clearly substantially different front the effect of an order of attachment under the Code of Civil Procedure. It stands substantiated from a collective analysis of Sections 12 and 13 of the 1944 Ordinance that in case of the conviction of the Directors of the respondent-company in the criminal proceedings pending before the Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi inter-alia under Sections 406 and 420 of the Indian Penal Code the criminal court on being called upon under Section 12 of the 1994 Ordinance shall record a finding as to the value of the goods in terms of money procured by the accused by means of the aforesaid offences. If the conviction becomes final, it would be open to the petitioner-company to apply to the District Judge, Ludhiana under Section 13 of the 1994 Ordinance to recover out of the property attached by the order of the District Judge, Ludhiana dated 28.9.1998, a sum of money, equal to the value of the goods procured by the accused as determined by the criminal court. In the facts and circumstances of the instant case, the petitioner-company can be allowed to recover a maximum of Rs. 1.50 crores from the attached property in view of the express stipulation to the aforesaid effect in the order of the District Judge, Ludhiana. 19. Learned counsel appearing for the Official Liquidator has sought to repell the contention advanced on the basis of the 1944 Ordinance by placing reliance on Section 14(b) of the 1944 ordinance. 1.50 crores from the attached property in view of the express stipulation to the aforesaid effect in the order of the District Judge, Ludhiana. 19. Learned counsel appearing for the Official Liquidator has sought to repell the contention advanced on the basis of the 1944 Ordinance by placing reliance on Section 14(b) of the 1944 ordinance. Section 14 is being extracted hereunder for facility of reference :- "Bar to other proceedings :- Save as provided in Section 11 and notwithstanding anything contained in any other law :- (a) no suit or other legal proceeding shall be maintainable in any court :- (i) in respect of any other property ordered to be forfeited under Section 13 or which has been taken in recovery of fine in pursuance of an order under that section, or (ii) while any other property is attached under this Ordinance, in respect of such other property - by any person upon whom a notice has been served under Section 4 or Section 6 or who has made an objection under sub- section (4) of Section 4; and (b) no court shall, in any legal proceedings or otherwise, pass any decree or order, other than a final decree in a suit by a person not being a person referred to in Clause (a), which shall have the effect of nullifying or affecting in any way any subsisting order of attachment or property under this Ordinance. or the right of the District Judge to hold security in lieu of any such order of attachment". 20. The submission of the learned counsel appearing for the Official Liquidator on the basis of section 14(b) is that the attachment order passed by the District Judge, Ludhiana dated 28.9.1998 would not create a bar in the instant case. It is not possible for me to accept the aforesaid contention. The order of the District Judge, Ludhiana dated 28.9.1998 was passed under Section 4 of the 1944 Ordinance. The words "any person appearing in Clause (a) of Section 14 necessarily relate to the persons against whom the order of attachment has been passed under Section 4 of the 1944 Ordinance. Accordingly, while interpreting Clause (b) of Section 14, the words "person referred to in Clause (a)" would also mean the person/persons against whom the order of attachment has been passed under Section 4 of the 1944 Ordinance. Accordingly, while interpreting Clause (b) of Section 14, the words "person referred to in Clause (a)" would also mean the person/persons against whom the order of attachment has been passed under Section 4 of the 1944 Ordinance. Thus viewed, under Clause (b) of Section 14 of the 1944 Ordinance, it is open to any person other than the persons against whom the order of attachment has been passed to initiate legal proceedings, which may have the effect of nullifying/altering/modifying the order of attachment of property passed by the District Judge under Section 4 of the 1944 Ordinance. In other words, bar envisaged under Clause (b) of Section 14 is a complete bar as against the persons against whom the order of attachment has been passed and not against any other person. In view of the fact that the learned counsel appearing for the Official Liquidator has not brought to the notice of this court the factum of initiation of any other legal proceedings in a court, which would have the effect of nullifying/altering/modifying the order of attachment, it is not possible for this court to hold that the order of attachment passed by the District Judge, Ludhiana dated 28.9.1998 has been diluted in any manner as against the interest of the petitioner-company. In any case, the order of winding up passed by this court in Company Petition No. 96 of 1997 against the respondent-company on 10.2.1999 does not affect the order of attachment passed by the District Judge, Ludhiana on 28.9.1998 in any manner whatsoever. In the aforesaid view of the matter, I find no merit in the first contention of the learned counsel appearing for the Official Liquidator. 21. The next contention of learned counsel appearing for the Official Liquidator is that the initiation of winding up proceedings ipso facto have the effect of staying pending legal proceedings. In this behalf, reliance has been placed on Section 446 of the Companies Act, 1956, which mandates that any legal proceedings commenced or pending on the date of the winding up order, shall not be proceeded with against the company, which has been wound up except with the leave of the Court. In this behalf, reliance has been placed on Section 446 of the Companies Act, 1956, which mandates that any legal proceedings commenced or pending on the date of the winding up order, shall not be proceeded with against the company, which has been wound up except with the leave of the Court. So far as the instant case is concerned, the order of attachment was passed by the District Judge, Ludhiana on 28.9.1998 whereas this court passed the winding up order against the respondent-company in Company Petition No. 96 of 1997 on 10.2.1999. After passing of order of attachment on 28.9.1998, no further proceedings have been taken against the respondent-company. The question of proceeding further under the 1944 Ordinance would only arise in case an order of conviction is passed against the Directors of the respondent-company by the Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi inter-alia under Sections 406 and 420 of the Indian Penal Code. At the said juncture, the petitioner-company may be required to seek the approval of the Company Court under Section 446 of the Companies Act, 1956. However, since the aforesaid eventuality has not yet arisen in this case as the Directors of the respondent company have not yet been convicted, it is not appropriate to deal with the aforesaid legal question at the aforesaid juncture. Suffice it to state that the provisions of Section 446 of the Companies Act, 1956 has no effect whatsoever on the order of attachment passed by the District Judge, Ludhiana under Section 4 of the 1994 Ordinance against the respondent-company on 28.9.1998. 22. Last of all, learned counsel appearing for the Official Liquidator half- heartedly contended that the petitioner-company is a creditor like any other creditor of the respondent-company and accordingly, can only claim the share proportionally out of the sale proceeds of the assets of the respondent- company. The aforesaid submission of the learned counsel appearing for the Official Liquidator is not acceptable in law. The 1944 Ordinance is a special enactment wherein the interests of the Central Government as also the State Government are sought to be protected so that a private party may not through offences specified in the Schedule attached to the 1944 Ordinance enrich itself by taking away money or other property belonging to the State Government or the Central Government. The 1944 Ordinance is a special enactment wherein the interests of the Central Government as also the State Government are sought to be protected so that a private party may not through offences specified in the Schedule attached to the 1944 Ordinance enrich itself by taking away money or other property belonging to the State Government or the Central Government. One cannot lose sight of the fact that the property vested in the Central Government or the State Government is indeed public property in which each citizen of the country has an interest. It is, therefore, that the 1944 Ordinance protected the State Government as also the Central Government by securing through attachment under Section 4 of the 1944 Ordinance, the properties of a person, who has allegedly committed a scheduled offence to procure money or other property from the State Government. It is, therefore, not possible for this court to accept that the petitioner-company should be treated as an ordinary creditor and not as a secured creditor. On an interpretation of Sections 12 and 13 of the 1944 Ordinance, it has already been held hereinabove that the petitioner-company would be a secured creditor for the recovery of its dues subject to the conviction of the Directors of the respondent-company for one or more of the scheduled offences and further subject to the Criminal Court finding under Section 12 of the 1944 Ordinance that the petitioner-company is entitled to the value of the goods in terms of money. 23. For the reasons recorded above, the instant petition is partly allowed. The claim of the petitioner-company that it be treated as a secured creditor in respect of the property of the respondent-company attached by the order of the District Judge, Ludhiana dated 28.9.1998, subject to a maximum of Rs. 1.50 Crores, is allowed. It is, however, clarified that the aforesaid status of secured creditor would accrue to the petitioner-company only upon the final determination of the proceedings initiated by it against the Directors of the respondent-company inter-alia under Sections 406 and 420 of the Indian Penal Code, which are presently stated to be pending before the Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi and further subject to the aforesaid court arriving at the conclusion that the petitioner-company is entitled to dues from the respondent-company under Section 12 of the 1944 Ordinance. The claim of the petitioner-company however, to treat it as a secured creditor in respect of the property attached by the order of the Delhi High Court dated 17.11.1998 is held to be devoid of merit. Petition partly allowed.