RAJASTHAN FINANCIAL CORPN. vs THE OFFICIAL LIQUIDATOR

The Supreme Court held that secured creditors, such as the Rajasthan Financial Corporation and the Rajasthan State Industrial Development and Investment Corporation, must exercise their rights under Section 29 of the State Financial Corporations Act, 1951 in a manner consistent with the rights of workmen represented by the Official Liquidator, who ranks pari passu with them. The Court upheld the company court's decision to reject the appellants' application to realize securities independently, emphasizing the need for coordination with the Official Liquidator regarding the sale of assets. The Court affirmed that the sale proceeds would be retained by the Official Liquidator until the claims of workmen were assessed under Section 529 of the Companies Act.