2018 (2) TMI 1997 - HC - Companies Law

Direction to Official Liquidator to pay the amount of ₹ 17,04,09,403/- or as per ratio and as per the directions issued by this Hon ble Court - payment to 2,806 workers of the Commercial Ahmedabad Mills Ltd. (In Liquidation) - HELD THAT - The Court when issued direction for the payment to the workers and the secured creditors as per the ratio worked out between the workers and the secured creditors i.e. 55.97% and 44.03% respectively vide order dated 02.03.2005 passed in Company Application No.359 of 1998, also issued further direction to apply same ratio to any further distribution that may take place after realization of the sale proceeds of the land of the company. In respect of the ratio fixed between the workers and the secured creditors by the Chartered Accountant in the year 2004, no grievance has been made either by workers or secured creditors and such ratio was ordered to be applied for future distribution. The Court finds that since respondents no.3 and 5 have agreed for disbursement as per the same ratio and since other secured creditors have chosen not to appear, they could be taken to have no objection for disbursement of the amount as per the same ratio and since sufficient amount is available in company s account with the Official Liquidator, the permission as sought for by the Official Liquidator for disbursement of the amount between workers and secured creditors could be granted. The Official Liquidator is permitted to disburse the amounts to the eligible persons from the list of the workers submitted by the applicant to the Official Liquidator excluding respondents no.9 to 21 of Company Application No.99 of 2017 or any of their relative and to the secured creditors from the balance amount available in the account of the company in liquidation as on 29.01.2018 in proportion to the ratio of 55.97% and 44.03% fixed between the workers and secured creditors respectively. Such disbursement shall be after adjusting the past payment made to the workers and secured creditors - Application disposed off.

Summary

Issues:
1. Disbursement of funds to workers of a company in liquidation.
2. Application to be joined as a party respondent in the disbursement application.

Issue 1: Disbursement of funds to workers of a company in liquidation

The first application sought the Official Liquidator to pay a specified amount to 2806 workers of a company in liquidation. The applicant claimed disbursement based on a previous court order and a report by the Official Liquidator. The report indicated payments made to secured creditors and workers, with a fixed ratio between them. The Official Liquidator requested permission to disburse funds according to the court order and the ratio, subject to certain conditions. The Court noted agreements from some secured creditors for the disbursement and granted permission for the disbursement based on the existing ratio and the availability of funds in the company's account.

Issue 2: Application to be joined as a party respondent in the disbursement application

A second application was filed to allow the applicant to be joined as a party respondent in the first application. However, during the proceedings, it was revealed that certain workers were not included in the disbursement list submitted by the applicant. The applicant agreed not to press for the second application based on this information. The Court found that since the necessary funds were available and agreements were in place from some secured creditors, the disbursement could proceed as per the existing ratio without objections. The Court issued detailed directions for the disbursement process, including verification of claims, submission of documents, and compliance reports.

In conclusion, the Court permitted the Official Liquidator to disburse funds to eligible workers and secured creditors based on the specified ratio and conditions. The Court emphasized the need for proper verification of claims and compliance with the outlined procedures to ensure accurate disbursement. The applications were disposed of accordingly, with detailed instructions for the disbursement process to be completed promptly.