2001 (1) TMI 867 - HC - Companies Law

Issues Involved:
1. Payment of claims to intercorporate deposit holders and bill discounting creditors.
2. Computation of dues and interest rates.
3. Preferential payment and its legality.
4. Representative character of the winding-up petition.
5. Pending scheme applications and their impact.
6. Authority of the Court under section 443(d) of the Companies Act, 1956.
7. Disbursement of funds held by joint special officers.

Detailed Analysis:

1. Payment of Claims to Intercorporate Deposit Holders and Bill Discounting Creditors:
The application sought a direction for the payment of claims to intercorporate deposit holders and bill discounting creditors of the company from a fund held by joint special officers. The company agreed to pay these creditors, represented in court or with pending winding-up petitions, at agreed interest rates till 23-12-1996, and thereafter at 10% per annum. Hindustan Development Corpn. Ltd.'s claim had been admitted by the Court on 30-9-1997, and the company had failed to pay its dues, leading to the advertisement of the petition and the matter acquiring a representative character.

2. Computation of Dues and Interest Rates:
Opposing creditors argued that the company incorrectly computed dues by adjusting amounts paid towards the principal instead of interest and that some creditors were entitled to 18% interest per annum from the date of their petition presentations. The company contended that the Court could direct payment from the fund, and the creditors should furnish particulars of claims after adjusting monies already received.

3. Preferential Payment and Its Legality:
Opponents argued that the payment as prayed for would amount to preferential payment, prohibited under the Companies Act, 1956. They cited various cases to support their contention. The company argued that the fund was initially created for a scheme, which was dismissed, making the fund the company's property. The company was solvent, and payment from the fund would not constitute fraudulent preference, as it would be made under a Court order.

4. Representative Character of the Winding-up Petition:
The winding-up petition of Hindustan Development Corpn. Ltd. had acquired a representative character due to its advertisement, entitling all lawful creditors to come before the Court. The Court considered whether to entertain the petitioner's prayer and allow disbursement from the fund for intercorporate deposit holders and bill discounting creditors.

5. Pending Scheme Applications and Their Impact:
Two scheme applications were pending, one by the company and another by Kirloskar Investment & Finance Ltd. Opponents argued that the present application sought an order without reference to these schemes, which the Court was not empowered to entertain without disposing of the pending schemes.

6. Authority of the Court under Section 443(d) of the Companies Act, 1956:
The company argued that under section 443(d) of the Act, the Court was empowered to make any order it deemed fit while considering winding-up petitions. The Court often allowed companies to pay debts in installments, which was not considered preferential payment.

7. Disbursement of Funds Held by Joint Special Officers:
The Court concluded that all creditors had notice and were at liberty to come before the Court. It was unjustifiable to deny relief to those who sought it. The fund, created by a Court order, was intended for creditor payment. The Court directed the joint special officers to disburse payments to willing creditors from the fund, with interest computed at agreed rates till 23-12-1996, and thereafter at 12% per annum till payment.

Conclusion:
The application was allowed, directing payment to creditors from the fund held by joint special officers. The company was to ascertain creditor details and the joint special officers were to notify and disburse payments. Creditors not agreeable to receive payment would have their claims set aside, and no further interest would accrue on their principal dues. The petition of creditors who received payment would be permanently stayed, and the application was disposed of accordingly.

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