A secured creditor can pursue remedies for enforcement of mortgaged security outside winding-up proceedings, but must obtain leave of the court and comply with any conditions imposed by the court.

( 1 ) THE abovenoted application A-13 has been filed by the Industrial Development Bank of India (hereinafter referred to as "the applicant-bank") under Sections 446 (1), 453 and 537 of the companies Act, 1956 ("the Act" in short), inter alia, seeking the following reliefs : 1. To grant leave under Section 446 (1) of the Act for institution of a suit against the respondent-company in the High Court of Judicature at Bombay for realisation of amounts due to the applicant.

( 2 ) TO grant leave under Section 453 of the Act for appointment of court receiver, the High Court of Bombay, for the mortgaged and hypothecated properties of the respondent company.

( 3 ) TO grant leave under Section 537 of the Act for recovery of its dues by sale of the movable and immovable properties of the respondent-company charged in favour of the applicant as security for repayment of such dues and for enforcement of execution and distress proceedings as directed by the Bombay High Court. 2. The relevant facts in brief as set out in this application are that the applicant-bank granted term loans aggregating to Rs. 1,40,00,000 (rupees one crore forty lakhs) to the respondent-company and as security therefor the said respondent-company executed deeds of hypothecation in favour of the applicant, on the basis of which the applicant has a first charge by way of hypothecation on all movable and immovable properties including plant and machinery, etc. , as well as stock of raw material, finished and unfinished goods. The payments of the applicants dues have also been guaranteed by respondents Nos. 2 and 3. The applicant made a demand on the respondent-company for making payment of the amount fallen due but as they failed and neglected the payment, the applicant will have to file a suit against the respondent-company and the guarantors. It has been stated that the applicant is a secured creditor and stands outside the winding up proceedings. 3. The respondent-company was declared a sick industrial company under the Sick Industrial companies (Special Provisions) Act, 1985, and was recommended to be wound up by the BIFR on December 21, 1993. This court, accepting the recommendations of the BIFR, directed that the company be wound up and appointed the official liquidator, attached to this court as the liquidator of the company. Subsequently, however, the operation of this order was stayed as the court was informed that an appeal had been preferred against the recommendations of the BIFR before the appellate authority. The stay order was subsequently vacated by this court on October 4, 1994, as the appeal had been dismissed by the appellate authority. The present application was filed, thereafter, by the applicant-bank for the reliefs mentioned above.

( 4 ) THE official liquidator has filed a counter-affidavit to this application. A rejoinder affidavit has been filed by the applicant to the said counter-affidavit. I have heard Sri R. P. Agarwal, learned counsel for the applicant-bank, the official liquidator. It has been contended by Sri Agarwal that as the applicant-bank is a secured creditor, it is entitled to pursue its remedies for enforcement of the mortgaged security as a matter of right by remaining outside the winding up proceedings. It has been further contended that the applicant is also entitled to obtain leave of the court for an order for appointment of a receiver over all the mortgaged and hypothecated properties of the respondent-company, under Section 453 of the Act and further for grant of leave under Section 537 of the Act for recovery of its dues by sale of the movable and immovable properties of the respondent-company charged in favour of the applicant as security for repayment of such dues. On the other hand, the official liquidator has contended that permission to file the suit can be granted by this court, however, the said suit should be directed to be filed before this court under section 446 (3) of the Act as the winding