2003 (10) TMI 411 - HC - Companies Law

Summary

Issues:
Application for direction to Bank of India to release Rs. 15 lakh to official liquidator under Companies Act.

Analysis:
The official liquidator filed an application seeking a direction against Bank of India to release Rs. 15 lakh, which belongs to the company in liquidation and is held in the form of FDR. The official liquidator argued that the amount is an asset of the company in liquidation under sections 446 and 456(2) of the Companies Act. Despite requests, the Bank did not remit the amount to the official liquidator. The Bank contended that the FDR was attached for realization of dues by ex-workers and that they have filed a dispute under the DRT Act as secured creditors.

Upon hearing all parties, the Court found that the application by the official liquidator deserved to be allowed. The Court emphasized that all assets of the company in liquidation must be distributed as per the provisions of the Companies Act. The Rs. 15 lakh held in the FDR was considered a moveable asset of the company, capable of distribution among those entitled to receive their share upon final winding up.

The Court asserted its overriding powers in winding up proceedings, stating that it can direct the Bank to release the sum to the official liquidator despite any attachment proceedings under Labour Laws. Such a direction was deemed necessary to ensure proper distribution of assets as per the Companies Act's objectives in winding up cases.

Consequently, the Court allowed the application and directed Bank of India to release Rs. 15 lakh along with accrued interest on the specified FDRs to the official liquidator within one month, in accordance with the agreed rate and banking norms applicable to the official liquidator.