THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY C.A.NO.7 OF 2010 in RCC No.1 of 1997 ORDER This appeal is directed against the order passed by the Official Liquidator on 8-3-2010 rejecting the claim of the appellant to treat a sum of Rs.51,70,662/- as secured debt. The brief facts of the case leading to filing of this appeal by the Andhra Pradesh State Financial Corporation are: Andhra Pradesh State Financial Corporation advanced Rs.60,00,000/- towards term loan to M/s Satya Sai Polymers Private Limited (in liquidation). The company executed a deed of hypothecation. The company failed to pay the amount within the stipulated time and consequently loans came to be rescheduled. In the process of rescheduling, the interest due on the two loans came to be transferred to the funded interest account and accordingly, repayment schedule came to be revised. By an order dated 3-7-1997 made in RCC No.1 of 1997, M/s. Satya Sai Polymers Private Limited was directed to be wound by this Court and the Official Liquidator attached to this Court came to be appointed as Liquidator of the Company. The Official Liquidator called for the claims from the creditors of the company as per order dated 24-7-2007 in C.A.No.1264 of 2007. Pursuant to the said order, notice in Form No.63 came to be published in newspapers fixing the last date for receipt of claims on 14-9-2007. The appellant filed its claim on 15-01-2010 belatedly for Rs.5,25,60,746/- as on 11-6-2002 and for Rs.23,36,75,376/- as on 31-12-2009. Delay in filing the claim came to be condoned on an application moved by the appellant under Rule 177 of the Companies Court Rules, 1959 vide C.A.No.123 of 2010. The Official Liquidator adjudicated the claim of the appellant and passed an order on 20-4-2010 treating the appellant as secured creditor in respect of Rs.2,06,29,224/- and as an un-secured creditor in respect of Rs.51,70,662/-. Aggrieved by the order passed by the Official Liquidator, the appellant has filed this appeal. Heard the learned counsel appearing on behalf of the appellant and the learned counsel appearing on behalf of the Official Liquidator. Learned counsel appearing on behalf of the appellant submits that funded interest account is not a separate loan and it is only an accrued interest on two term loans, which had already been registered with the Registrar of Companies by way of filing Form No.8. It is also contended by the learned counsel for the appellant that what is claimed by the appellant under the funded interest account is only the interest due on the principal amounts till the date of passing of winding up order i.e., 3-7-1997. Learned counsel appearing on behalf of the Official Liquidator submits that once accrued interest on the outstanding amounts has been transferred to the funded interest account, it is to be treated as fresh loan and that unless it is registered with the Registrar of Companies as provided under Section 125 of the Companies Act by filing a charge in Form No.8, it cannot be treated as a secured debt. It is also contended by him that transferring the interest amount due on the two outstanding loans to funded interest account amounts to modification of the terms of the charge which is required to be informed to the Registrar as provided under Section 135 of the Companies Act, 1956 ( for short ‘the Act’). There being no such information furnished to the Registrar of Companies with regard to transfer of the accrued interest on the loan accounts to the funded interest account, the amount of Rs.51,70,662/ cannot be treated as unsecured debt and therefore, the order passed by the Official Liquidator does not suffer from any illegality warranting interference of this Court in exercise of powers under Rule 164 of the Companies Court Rules, 1959. The only issue that calls for adjudication is: Whether funded interest account can be treated as separate loan account necessitating the appellant to inform the Registrar of Companies as provided under Section 135 of the Act? Indisputably, the appellant-company has charge over the properties of the company in liquidation in respect of loan i.e., Rs.60 lakhs. Interest due on the loan has been transferred to the funded interest account. Under Section 135 of the Act, whenever the terms or conditions of any charge registered under this part are modified, it shall be the duty of the company to send the particulars of such modification to the Registrar. For better appreciation, I may refer Section 135 of the Act, which reads as hereunder: “Whenever the terms or conditions, or the extent or operation, of any charge registered under this part are or is modified, it shall be the duty of the company to sent to the Registrar the particulars of such modification, and the provisions of this part as to registration of charge shall apply to such modification of the charge.” The appellant company registered a charge with regard to term loan of Rs.60 lakhs with interest thereon at 15.5.% p.a. The funded interest account is nothing but interest accrued on two loans. The interest accrued on two loans have been shown as a separate account called “The Funded Interest Account”. No amount has been advanced afresh to the company in liquidation. Therefore, there is no modification of the charge which is required to be informed to the Registrar as provided under Section 135 of the Act. Since “The Funded Interest Account” is nothing but interest due on two term loans for which charge has already been created, no further charge is required to be placed on record with the Registrar of Companies. Therefore, the funded interest account of Rs.51,70,662/- is to be treated as secured debt. In that view of the matter, the order passed by the Official Liquidator rejecting the claim of the appellant with regard to Rs.51,70,662/- as secured debt cannot be sustained. Accordingly, the company appeal is allowed setting aside the order dated 20-4-2010 and consequently, the funded interest of Rs.51,70,662/- is to be treated as secured debt. ___________________________ B.SESHASAYANA REDDY,J rkk Dated: 14-6-2011