2002 (11) TMI 350 - HC - Companies Law

Summary

Issues:
1. Ratification of appointing security guards for safeguarding company assets.
2. Dispute over payment of security charges by secured creditors.
3. Legality of appointing private security guards agencies.
4. Direction on engagement of security guards and payment procedures.

Analysis:
1. The official liquidator sought ratification for appointing 98 security guards to safeguard the assets of the company in liquidation. A committee decided that 45 guards were sufficient. The Bank of Baroda refused to bear security expenses, while the IDBI agreed to pay. The court directed IDBI to bear charges for 45 security guards and RMMS to provide the guard list within two weeks for IDBI to pay wages from November 16, 2002. The official liquidator was relieved of security responsibility, with IDBI tasked to protect the property and pay bills until November 15, 2002.

2. Some secured creditors opposed paying for security guards due to excessive bills. The court noted similar objections in other cases. One creditor requested discontinuation of protection as the property value was less than the security bill. Complaints included guards' absence leading to thefts. The court emphasized the importance of overseeing security measures to prevent such incidents and ensure protection of assets.

3. The court highlighted that private security guard agencies were prohibited under the Maharashtra Private Security Guards Act, 1981. The official liquidator was directed to engage security guards through the Security Guards Board or employment exchanges where applicable. For properties like mills or factories with internal security, preference should be given to their security staff. The official liquidator should involve secured creditors in appointing, supervising, and paying security guards to reduce the burden on their office.

4. Payment to workers should be facilitated through union identification to avoid unnecessary expenses. The official liquidator was instructed to strictly adhere to the court's directions and seek further orders in case of difficulties. These measures aimed to streamline the engagement and payment processes for security guards and ensure effective protection of company assets under liquidation.