ORDER S. Siri Jagan, J. 1. A very vexing question as to the interpretation of the Companies Act, 1956, the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA" for short), and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ("Securitisation Act" for short) in respect of a claim of workmen of a company in liquidation under S.529A of the Companies Act, as against a secured creditor who has sold the assets of the company in liquidation in exercise of their powers under S.13(4) of the Securitisation Act, before the order of winding up arises in this case. The facts necessary for disposal of this case are as follows:- 2. The Board of Directors of M/s. BST Ltd. (the Company in liquidation) made a reference dated 19.11.2003 to the Board of Industrial Finance and Reconstruction ("BIFR" for short) under S.15 of the SICA, which was received by the BIFR on 21.11.2003. The BIFR issued notices to all the secured creditors of the company including the 4th respondent Indian Bank, in that reference. The BIFR, after hearing the secured creditors, including the 4th respondent, by order dated 29.6.2005, held that the Board was satisfied that the company had become a sick industrial company and came to the prima facie conclusion that company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations. The Board felt that the company, as a result thereof, was not likely to become viable on a long term basis and hence it was just, equitable and in public interest that it be wound up. But the Board gave the promoters an opportunity to formulate a viable rehabilitation proposal and to submit the same to the Operating Agency, who was in turn directed to consider such proposal in a joint meeting of the involved agencies and to submit a report. The Board again considered the matter on 29.9.2005 on which date none of the secured creditors chose to appear before the Board. On that date the Board confirmed their prima facie opinion that it is just, equitable and in public interest to wind up the company, under S.20(1) of the SICA and directed that the opinion be forwarded to the concerned High Court. That opinion was forwarded to this Court on 13.10.2005 and was received by this Court on 19.10.2005. On that date the Board confirmed their prima facie opinion that it is just, equitable and in public interest to wind up the company, under S.20(1) of the SICA and directed that the opinion be forwarded to the concerned High Court. That opinion was forwarded to this Court on 13.10.2005 and was received by this Court on 19.10.2005. The same was numbered as C.P. No.23/06 and placed before the Company Judge on 2.8.2006, who ordered notice to all persons named in the appendix to the order of the BIFR which included the 4th respondent herein, who entered appearance. In the C.P., on 4.10.2007, another union of workmen of the company in liquidation filed C.A. No. 649 of 2007, for a direction to the 4th respondent herein to keep the amount of Rs.1,23,65,675/-towards dues of the workmen, out of the amount realised by selling the properties of the industrial unit of the company in liquidation in public auction under the Securitisation Act, in a separate account bearing interest pending orders in the winding up petition. When the same came up on 18.10.2007 the counsel for the 4th respondent herein, who was the 2nd respondent in the C.A., submitted that the sale has not taken place, which submission was recorded and the C.A. was adjourned by 10 days directing the Bank to file counter affidavit. No counter affidavit was filed and on 2.11.2007 this Court passed orders in the company petition directing that the company be wound up. Of course, the learned counsel for the bank now submits that that submission was made on account of a communication gap between the Bangalore office and the Cochin office of the bank, since the sale was conducted in Bangalore. I am satisfied that that could have been a mistake, because it is not disputed before me that the sale had in fact taken place on 29.6.2000. It is in the winding up proceedings another union of the workmen of the company in liquidation has filed this Company Application, seeking a direction to the 4th respondent to deposit the proceeds realised by the sale of the property of the Company at Bangalore in this Court for enforcing the charge for workmen's dues on the assets of the company. The contention of the applicant is that by Annexure D order, the Labour Court, Kozhikode, has in C.P. No. 21/2005 held that the 74 workmen of the company who have filed the C.P. are entitled to receive a total amount of Rs.56,16,9877/- and by virtue of the second proviso to S.13(9) of the Securitisation Act, the Bank can retain the proceeds of sale of the assets of the company only after depositing the workmen's dues with the official liquidator. 3. A counter affidavit has been filed by the 4th respondent bank taking the contention that the sale, pursuant to proceedings under S.13(4) of the Securitisation Act, was effected much before the order of winding up of the company on 2.11.2007 and the 2nd proviso to S.13(9) applies only if the sale is subsequent to the order of winding up. According to the Bank, the sale took place as early as on 29.6.2006, much before the order of winding up, and therefore, the 2nd proviso to S.13(9) is not applicable to such sale, in which case, they are not bound to deposit the workmen's dues in accordance with that proviso. They also take a contention that since possession of the property of the Company under S.13(4) of the Securitisation Act was taken by them on 13.2.2006, the proceedings under the SICA themselves have abated by virtue of operation of the 2nd proviso to S.15(1) of the SICA. They also take the contention that the Securitisation Act overrides both the SICA and the Companies Act. 4. At the outset, I note that the 4th respondent Bank has not challenged either the proceedings of the BIFR or the order of winding up by this Court, which have become final. The Bank was a party to both the proceedings before the BIFR and this Court. Even in the C.P. they had not taken any objection to the company being wound up under S.20(2) of the SICA, either on the ground that the reference itself has abated by virtue of the operation of the 2nd proviso to S.15 (1) of the Act or on any other ground. In fact they have never intimated either the BIFR or this Court at any time before filing of this Company Application that they had taken measures to recover the debt under S.13(4) of the Securitisation Act, in respect of the secured assets of the company. In fact they have never intimated either the BIFR or this Court at any time before filing of this Company Application that they had taken measures to recover the debt under S.13(4) of the Securitisation Act, in respect of the secured assets of the company. I am of the opinion that the abatement of the reference before the BIFR, by virtue of the 2nd proviso to S.15(1) of the SICA, would not come into operation unless the secured creditor brings to the attention of the BIFR that the secured creditor has taken measures to recover the debt under S.13(4) of the Securitisation Act (which is a fact known only to the 4th respondent and probably the company) and therefore the reference has abated. The consequence of abatement of reference is that the BIFR cannot proceed with the reference and in order for the BIFR to close the reference as abated, the BIFR should know that the secured creditor had taken measures under S.13(4). Therefore, if the BIFR, being unaware of the measures taken under S.13(4) by the secured creditor, completes the proceedings under the SICA, which ends in a winding up order by the High Court, notwithstanding the 2nd proviso to S.15(1) of the SICA, such proceedings would be valid, in so far as it is for the secured creditor to bring the fact to the attention of the BIFR, so as to bring the abatement into operation, which they have failed to do. In this case, the 4th respondent Bank has not chosen to inform either the BIFR or this court that the reference has abated since they had taken measures under S.13(4) on 13.2.2006, until at least till 2.11.2007 when this court passed the winding up order and therefore the winding up order has been validly passed under S.20(2) of the SICA, which is binding on the 4th respondent Bank notwithstanding the 2nd proviso to S.15(1) of the SICA. 5. The next contention raised by the Bank is that the proviso to S.13(9) of the Securitisation Act is not attracted in this case, since at the time of sale of the secured asset of the company, the company was not 'being wound up'. According to them, the proviso is attracted only in the case of a company 'being wound up' at the time of the sale under S.13(4). According to them, the proviso is attracted only in the case of a company 'being wound up' at the time of the sale under S.13(4). Since the sale was on 29.6.2006, much before the winding up order on 2.11.2007, the proviso is not applicable to that sale. 6. Firstly, I am of opinion that that contention is no more open to the 4th respondent Bank in view of the judgment dated 12.4.2007 of the Karnataka High Court in W.P. No.12749/2005 filed by another union of the company in liquidation, which filed C. A. No. 649/200 7, in which the Bank was the 3rd respondent and which judgment is produced as Annexure I to C.A. No. 649/07 referred to above, wherein, the Karnataka High Court has held thus in paragraphs 4 to 8: "4. It is in this connection, 3rd respondent was impleaded in this Writ Petition. The 3rd respondent on appearance has submitted that, the bank had taken possession of the assets of the 2nd respondent company invoking S.13 of Securitisation Act. It is also admitted that it sold all the assets of the 2nd respondent in a public auction and has realised the sale proceeds to the tune of Rupees Twelve Crores and seventy lakhs and the said amount is in deposit with it. 5. Though the amount is lying with the 3rd respondent Bank, it has expressed its inability to disburse any amount to the workmen on the ground that the bank has exercised its recovery right under the provisions of the Securitisation Act and it has not committed any error in realising the sale proceeds and it is also not based on any direction by the Court. However, it is submitted by the learned Counsel for the Bank that since BIFR has already submitted a report in respect of the industry in question and based on the said report the Kerala High Court at Ernakulam has initiated the winding up proceedings in Company Petition No .23/2006 and further stated that in view of pendency of that petition it is not permissible for the Bank to disburse any amount nor it is permissible for the member of the union to claim money directly from the bank. 6. It is now clear that, the 2nd respondent's assets has been sold by the 3rd respondent bank and the sale proceeds is in deposit with it. 6. It is now clear that, the 2nd respondent's assets has been sold by the 3rd respondent bank and the sale proceeds is in deposit with it. It is also now clear from para 4 of the statement of objections filed by the 3rd respondent that, BIFR has submitted a report under S.20(2) of the SICA and further the company petition is pending for wounding up. If there is a BIFR report necessarily there would be prohibition of disbursement of amount in view of the pendency of company petition for winding up of the 2nd respondent company. Further, proviso to S.13(9) of the Securitisation Act provides that, in the case of a company in liquidation the amount realized from the sale of secured assets shall be distributed in accordance with the provisions of S.529A of the Companies Act, 1956. It also provides that in the case of a company being wound up on or after the commencement of the Act, the secured creditor of such company, who opts to realise his security instead of relinquishing his security and proving his debt under proviso to sub-s. (1) of S.529 of the Companies Act may retain the sale proceeds of his secured assets after depositing the workmen's dues with the liquidator in accordance with the provisions of S.529A of the Act. And the Official Liquidator shall intimate the secured creditors the workmen's due in accordance with the provisions of S.529A of the Companies Act, 1956 and in case such workmen's due cannot be ascertained, the liquidator shall intimate the estimated amount of the workmen's due under S.529A of the Act to the secured creditor and in such case the secured creditor may retain the sale proceeds of the secured assets after depositing of the amount of such estimated dues with the official liquidator. 7. By reading the proviso to S.13(9) it is clear that the Legislature has taken care to protect the interest to the workman. 8. Now the question is whether any relief can be granted in this Writ Petition towards payment of closure compensation even though 2nd respondent has no objection. 7. By reading the proviso to S.13(9) it is clear that the Legislature has taken care to protect the interest to the workman. 8. Now the question is whether any relief can be granted in this Writ Petition towards payment of closure compensation even though 2nd respondent has no objection. In this case 2nd respondent company has filed memo of calculation inter alia disclosing the amount due to the member of the petitioner Union, inter alia stating that there are 143 workmen and their claims in all comes to Rs.1,04,34,673/- and learned Counsel for the petitioner has also filed claim petition inter alia claiming compensation in respect of the workmen in whose claim is not included by the 2nd respondent which would come to the tune of Rs.19,31,002/-. Since it is not in dispute that 2nd respondent company's assets are sold by the 3rd respondent, it is also not in dispute that the sale proceeds are lying with the 3rd respondent bank. The workmen's claim is required to be met irrespective of the claim of the secured creditors and for that matter secured creditors are required to disburse the amount due to the workmen. However, this exercise cannot be done in this Writ Petition. It can only be done by the Company Court before which the matter is pending for winding up. " (underlining supplied) That judgment has become final and binding on the 4th respondent Bank. 7. Apart from the same, since I have held that the proceedings under the SICA culminating in the winding up order is valid, the question would arise as to whether when the BIFR and this court was in seizin, of the matter, it was proper on the part of the 4th respondent to sell the secured assets without at least intimating the BIFR or this court about their proposed action, especially in view of S.20(4) of the SICA. In paragraph 50 of the decision of NGEF Ltd. v. Chandra Developers (P) Ltd. and Anr. ( (2005) 8 SCC 219 ), albeit in the context of powers of the company court to direct sale of the assets of the company pending proceedings for winding up under S.20(2) of the SICA, vis-a-vis the power of the BIFR under S.20(4) thereof, the Supreme Court has held that: ".... ( (2005) 8 SCC 219 ), albeit in the context of powers of the company court to direct sale of the assets of the company pending proceedings for winding up under S.20(2) of the SICA, vis-a-vis the power of the BIFR under S.20(4) thereof, the Supreme Court has held that: ".... but there cannot be any doubt whatsoever that having regard to the phraseology used in S.20 of the SICA that BIFR is the authority proprio vigore 'which continues to remain as custodian of the assets of the Company, till a winding up order is passed by the High Court." In paragraph 41 of the same judgment the Supreme Court has held thus: "41. It is difficult to accept the submission of the learned counsel appearing on behalf of the respondents that both the Company Court and BIFR exercise concurrent jurisdiction. If such a construction is upheld, there shall be chaos and confusion. A company declared to be sick in terms of the provisions of SICA, continues to be sick unless it is directed to be wound up. Till the company remains a sick company having regard to the provisions of sub-s.(4) of S.20. BIFR alone shall have jurisdiction as regards sale of its assets till an order of winding up is passed by a Company Court." Again in paragraph 43 thereof, the Supreme Court again held thus: "43. .... The Scheme suggests that BIFR retains control over the assets of the Company and in terms of the aforementioned provisions may either prevent any sale or permit any sale of the assets of the sick Individual company. Such a power in BIFR remains till a winding up order is passed by the High Court and a stage arrives for the High Court for issuing orders for distribution of the sale proceeds." Elaborate arguments have been advanced before me as to the meaning of the term 'being wound-up' occurring in the 2nd proviso to S.13(9) of the Securitisation Act, as to when does the winding up in terms of S.20(2) of the SICA commence, as to whether S.441(2) of the Companies Act regarding commencement of winding up can be applied to the fact situation etc. I am of opinion that I do not have to labour much on that issue, since the Supreme Court has in paragraph 50 of NGEF Ltd.'s case (supra) answered that question thus: "50. I am of opinion that I do not have to labour much on that issue, since the Supreme Court has in paragraph 50 of NGEF Ltd.'s case (supra) answered that question thus: "50. We may, however, observe that the opinion of the Division Bench in BPL Ltd. to the effect that the winding-up proceeding in relation to a matter arising out of the recommendations of BIFR shall commence only on passing of an order of winding up of the Company may not be correct. It may be true that no formal application is required to be filed for initiating a proceeding under S.433 of the Companies Act as the recommendations therefor are made by BIFR or AAIFR, as the case may be, and, thus the date on which such recommendations are made, the Company Judge applies its mind to initiate a proceeding relying on or on the basis thereof, the proceeding for winding up would be deemed to have been started; but there cannot be any doubt whatsoever that having regard to the phraseology used in S.20 of SICA that BIFR is the authority proprio vigore which continues to remain as custodian of the assets of the Company till a winding-up order is passed by the High Court." Of course the language used there is not exactly clear. It is not quite clear as to whether the relevant date is the date when the recommendation is made by the BIFR or whether it is the date when the Company Judge applies its mind to initiate a proceeding relying on, or on the basis thereof. Taking analogy from S.441(2) of the Companies Act, the same could also be regarded as the date on which the BIFR forwards its opinion under S.20(1) to the High Court. 8. While at it, I must note another aspect of the issue. From the file of this Court in C.P. No. 23/06, I find that the opinion of the BIFR under S.20(1) of the SICA was received in the Registry on 19.10.2005. But the same was placed before the Company Judge to enable him to apply his mind only on 3.8.2006. Had the matter been placed before the Company Judge within a reasonable time after receipt of the opinion of the BIFR on 19.10.2005, then this difficulty would not have arisen, since the sale was only on 29.6.2006. But the same was placed before the Company Judge to enable him to apply his mind only on 3.8.2006. Had the matter been placed before the Company Judge within a reasonable time after receipt of the opinion of the BIFR on 19.10.2005, then this difficulty would not have arisen, since the sale was only on 29.6.2006. It is settled law that the act of the Court shall prejudice none. I am of opinion that this is an eminently fit case for applying that principle. That being so, I am of opinion that in this case the sale on 29.6.2006 should be deemed to have been effected subsequent to the date of commencement of the winding up and, therefore, at the time of sale the company was being wound up. 9. In any event, although the secured creditor had the right to sell the secured asset in exercise of their powers under S.13 (4) of the Securitisation Act, in view of my finding that on account of their failure to intimate the BIFR of their intention to sell the secured assets of the company, who, as held by the Supreme Court in NGEF Ltd.s' case (supra), is the custodian of the assets of the company and the BIFR alone has the jurisdiction as regards sale of its assets till an order of winding up is passed by the Company Court, the sale made by the 4th respondent Bank is at least voidable. The Supreme Court themselves had, in paragraph 53 in the NGEF Ltd.s' case (supra), indicated the powers of the Court in such cases thus: "53. In Pankaj Mehra v. State of Maharashtra ( 2000 (2) KLT 338 (SC)) whereupon the learned counsel appearing on behalf of the first respondent placed strong reliance, construction of subs.( 2) of S.536 of the Companies Act came up for consideration and it was held that having regard to the phraseology used therein, in transaction shall be void unless the court otherwise orders. It is interesting to note that in para 19 thereof, this Court noticed the principles laid down in Gray's Inn Construction Co. Ltd., Re emphasising the point that the courts would be very circumspect in the matter of validating the payments and the interests of the creditors as well as the Company would be kept uppermost in consideration. It is interesting to note that in para 19 thereof, this Court noticed the principles laid down in Gray's Inn Construction Co. Ltd., Re emphasising the point that the courts would be very circumspect in the matter of validating the payments and the interests of the creditors as well as the Company would be kept uppermost in consideration. Thus, a disposition of assets during the interregnum may not be irretrievably void but the courts are required to exercise power with circumspection and caution." In para. 64, while considering the validity of the order of the Company Court directing sale of the assets of the Company while the proceedings under S.20(2) was pending, the Supreme Court observed thus: "64. The Company Judge, moreover, will have to bear in mind the provisions contained in S.529-A of the Companies Act in terms whereof the dues of the workman and the debts due to the secured creditors to the extent such debts rank in cl.(c) of the proviso appended to sub-s. (1) of S.529 part passutherewith and shall have a priority over all other debts." 10. In this connection I note that while interpreting the beneficial provision in the 2nd proviso to S.13(9) of the Securitisation Act, which itself is often termed by borrowers in default as draconian, a liberal view is called for in favour of the workmen who have lost their job, in order to save them from total destitution. 11. Keeping all the above in mind, I feel that it would be in keeping with the legislative intent to hold that the sale proceeds now in the hands of the 4th respondent are liable to be directed to be made available for distribution in accordance with S.529A of the Companies Act read with the 2nd proviso to S.13(9) of the Securitisation Act. 12. It is now submitted before me that the 4th respondent is only one of the members of a Consortium of banks, who have advanced amounts to the company in liquidation, which Consortium consists of respondents 5, 6, 7 and 8 and others. The counsel for the 4th respondent submits that the amounts realised by the sale have been proportionally adjusted against the dues of all the members of the Consortium on 4.8.2006. That being so, all the members of the Consortium are proportionately liable to deposit the arrears of dues as provided under S.13(9) of the Securitisation Act. The counsel for the 4th respondent submits that the amounts realised by the sale have been proportionally adjusted against the dues of all the members of the Consortium on 4.8.2006. That being so, all the members of the Consortium are proportionately liable to deposit the arrears of dues as provided under S.13(9) of the Securitisation Act. In that view the Company Application is allowed and all the members of the Consortium represented by the 4th respondent Bank are directed to deposit with the liquidator, the workers dues out of the sale proceeds of the secured assets of the company in liquidation in accordance with the provisions of S.529A of the Companies Act. This shall be done within two months from today. The Official Liquidator shall assess the workers' dues and intimate the 4th respondent the dues to be deposited by the Consortium. The 4th respondent, who admittedly represents the Consortium, shall collect the proportionate shares of all the members of the Consortium and deposit the same with the Official Liquidator. It is made clear that all the members of the Consortium shall be bound by this direction and all of them shall be duty bound to see that the workers' dues are deposited with the Official Liquidator within the stipulated time without default.