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Issues Involved
1. Lawful liability of the applicant company regarding the expenses deducted by the Official Liquidator. 2. Proportionate share of security expenses among the applicant bank and other secured creditors. 3. Deduction of valuation charges and professional fees. 4. Deduction of advertisement charges. 5. Deduction and admissibility of workmen's dues. 6. Deduction of fees for the Central Government by the Official Liquidator. 7. Realisation of security interest under the Securitisation Act. Detailed Analysis 1. Lawful Liability of the Applicant Company The applicant sought relief to direct the Official Liquidator to account for Rs. 75,000 and pay any surplus after adjusting statutory expenses. The court noted that the Official Liquidator retained Rs. 63.52 lakhs. The primary issue was whether the Official Liquidator was justified in deducting this amount. The court directed the Official Liquidator to provide detailed expenses for the security deployed within six weeks. 2. Proportionate Share of Security Expenses The applicant argued that other secured creditors should share the security expenses. The court observed that the property was sold for Rs. 23.80 crores, and the security expenses were Rs. 14,46,530, approximately 1.3% of the sale amount. The court directed that 1.3% of the security expenses be borne by other secured creditors, Centurian Bank, and IndusInd Bank. Additionally, 1.5% of the security expenses should be deducted from the workmen's dues of Rs. 32,37,000. The Official Liquidator was instructed to refund the respective amounts to the applicant. 3. Deduction of Valuation Charges and Professional Fees The applicant contended that Centurian Bank should bear the valuation charges. The court directed that the applicant bear the valuation expenses except for 1.3%, which should be borne by Centurian Bank and IndusInd Bank. Regarding the professional fee of Shri N.K. Shah, the court noted the absence of bills and directed the Official Liquidator to submit a separate report with the bills and justification. 4. Deduction of Advertisement Charges The court noted that no bill for advertisement charges was produced. However, since the payment was already made, the Official Liquidator was directed to move an appropriate report for ratification by producing proof of the advertisement expenses. 5. Deduction and Admissibility of Workmen's Dues The Official Liquidator retained Rs. 32,37,000 for workmen's dues. The court directed the Official Liquidator to examine the claim and communicate the admissibility to the applicant bank within three months. The applicant bank could then resort to appropriate legal proceedings. Until the final decision, the Official Liquidator was not directed to refund the amount. 6. Deduction of Fees for the Central Government The applicant objected to the deduction of Rs. 15,02,400 as fees for the Central Government, arguing that they remained outside the winding-up and realized the security interest independently. The court referred to Section 529 of the Companies Act and Rule 291 of the Companies (Court) Rules, stating that fees are payable upon the realization of assets of the company in liquidation. The court concluded that the Official Liquidator performed necessary duties for the realization of the property, and thus, the fees were justified. The Official Liquidator was instructed to calculate and deposit the fees with the Central Government. 7. Realisation of Security Interest under the Securitisation Act The applicant argued that under the Securitisation Act, they could have realized the security interest without court intervention. The court noted that the property was in the possession of the Official Liquidator, and the sale was effected under the court's arrangement. Thus, the realization of the security interest involved court intervention, justifying the deduction of fees. Conclusion The court directed the Official Liquidator to provide detailed expenses, share security expenses proportionately among secured creditors, and submit bills for valuation and advertisement charges. The Official Liquidator was also instructed to examine workmen's dues and calculate fees for the Central Government. The application was disposed of accordingly.
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