2019 (12) TMI 1610 - Tri - Insolvency and Bankruptcy

Recovery of dues - priority of claims - whether the second charge holder has any right to claim priority over the first charge holder? - HELD THAT - This question has already been answered in the court itself and the Liquidator is directed to distribute the funds strictly adhering to the ratios as arrived by him for the first charge holder as per the Code. If at all any grievance on the part of the second charge holder, they may approach the competent court but they have no authority to approach this Bench. Application disposed off.

Summary

Issues involved: Priority of charge holders in distribution of funds by Liquidator, Legal bar on public sector undertaking in paying to relief funds, Effect of previous orders on subsequent applications.

Priority of charge holders in distribution of funds by Liquidator:
The Tribunal considered the issue of whether the second charge holder has the right to claim priority over the first charge holder in the distribution of funds by the Liquidator. The Tribunal noted that this question had already been addressed by the court, directing the Liquidator to distribute the funds according to the ratios determined for the first charge holder as per the Code. The Tribunal emphasized that if the second charge holder had any grievances, they should approach the competent court rather than the Tribunal. The Tribunal clarified that the Liquidator's decisions must be followed, and any disputes should be resolved through the appropriate legal channels.

Legal bar on public sector undertaking in paying to relief funds:
In the case of MA 2622/2019, the Tribunal observed a legal restriction on public sector undertakings regarding payments to relief funds. Consequently, the order was modified to reflect this legal constraint. The Tribunal allowed the application in MA 2622/2019, adjusting the order accordingly and relieving the applicant from the obligation to pay any costs. This decision highlights the importance of complying with legal restrictions and modifying orders accordingly to align with the applicable laws and regulations.

Effect of previous orders on subsequent applications:
Regarding MA 3346/2019, the Tribunal deemed the application as infructuous due to the order issued in MA 520/2019. This illustrates the principle that subsequent applications may become irrelevant or unnecessary if previous orders have already addressed the relevant issues. The Tribunal's decision in MA 520/2019 had a consequential impact on the viability of the application in MA 3346/2019, emphasizing the significance of considering the implications of prior judgments on subsequent legal actions.

In conclusion, the Tribunal's judgment delves into the priority of charge holders in fund distribution, the impact of legal restrictions on public sector undertakings, and the effect of previous orders on subsequent applications. By addressing these issues comprehensively and providing clear directives on the appropriate legal recourse for grievances, the Tribunal ensures the effective administration of justice and adherence to legal principles in the resolution of financial matters.