Whether lessor is considered as secured creditor in hirepurchase contract under liquidation of co.
Querist :
Anonymous
(Querist) 05 May 2011
This query is : Resolved
We have been appointed by office of the official liquidator to verify the claims of Secured Creditor. In our case there are only two creditors claiming to be secured creditor one is a bank who has first charge on the assets including land, building, machineries and all kind of stocks. Other is a financial institution who has entered into the hire purchase agreement for the machineries.
Now we have verified that bank has filed form no. 8 & 13 and created charge with ROC. On the other hand financial institution has not created any charge. As I understand as per section 125 of the companies act, 1956 if the charge is not created on the assets, it will be void and not having enjoyment as secured creditor. However I have been informed that some of the high courts are of the view that under hire purchase agreement, the lessor is considered to be Secured Creditor. (However I am not sure whether to rely on that.)
Now the sale proceeds in total has taken place including land, building and machineries.
Now my questions are as under:
1. Do financial institution is entitled get its share as secured creditor eventhogh no charge has been created.
2. If there are any decisions available please let me know.
Raj Kumar Makkad
(Expert) 06 May 2011
Financial institution cannot be considered as secured creditor in the given facts hence if any amount is surplus after clearing bank's debt, the claim of such institution can be considered.
