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TMI Blog1979 (10) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On January 3, 1975, the court directed that a meeting be called on March 16, 1975, for consideration of the scheme. Shri M.M. Singhvi, advocate, was nominated to preside over the meeting. Shri Singhvi submitted his report on October 21, 1975. As per his report the meeting was attended by a requisite majority of creditors. The quorum was complete on the lines indicated in the order dated January 3, 1975. The meeting was attended also, among others, by the representatives of the I.T. Dept. In this meeting a scheme was unanimously adopted on March 16, 1975. When the matter came up for consideration before the court no objections were raised either on behalf of the creditors or on behalf of the official liquidator, except a few of a formal character. The court further ordered that the scheme as sanctioned would become operative from the date of the order of sanctioning, but in case an appeal was filed, it would become operative when the appeal was disposed of. Certain modifications were ordered by the court while finally sanctioning the scheme on December 15, 1975. It is not necessary to refer to those modifications as now the final order of the court dated December 15, 1975, is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme already sanctioned. It was further contended by the official liquidator that the creditors are entitled to get interest at the rate of 12% on the amounts advanced by them. If interest were to be calculated at the rate of 12% it would come to about 90 lakhs of rupees. The official liquidator contends that a provision for this amount should be made before any modification in the scheme dated December 15, 1975, is made. It has been further contended on behalf of the official liquidator that he is to be paid the charges, costs and expenses before any modification is sanctioned. According to the official liquidator the interest which has accrued in favour of the creditors would also be included in the "term charges, costs and expenses". It was also contended by the official liquidator that, according to the terms of the agreement which have been entered into, a bank guarantee of Rs. 40 lakhs has been filed in favour of the Additional Registrar, Rajasthan High Court, Jaipur Bench, Jaipur. His contention is that the Additional Registrar should not be brought into the picture because it is the exclusive domain of the official liquidator to deal with the funds coming under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already accepted and to be accepted up to the date of the company going out of liquidation by the official liquidator, in full and final satisfaction of their dues against the company. It has been further contended by the learned counsel for the petitioners that the amounts to be paid to the creditors have been quantified to be Rs. 41,89,072.53 in the scheme dated December 15, 1975. This represents the balance of 40% of the ordinary creditors, as the preferential creditors have already been paid in full and the ordinary creditors have been paid to the extent of 60%. The learned counsel for the petitioners have further contended that in the scheme dated December 15, 1975, no interest was contemplated to be paid to the creditors. It was also contended that after the scheme has been sanctioned, it has a statutory force, and the creditors are not entitled to claim any interest whatsoever after having consented to the scheme dated December 15, 1975. It was also contended that the petitioner alone filed an appeal before the Division Bench, and neither the creditors nor the official liquidator filed any appeal before the Division Bench. The appeal filed by the petitioners has also been di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full and that a company is striving to go out of liquidation. It was contended that, as a matter of fact, the official liquidator, who looks after the interests of the ex-management, should co-operate in the final shape of things to come rather than to raise fictitious and exaggerated claims against the company in liquidation. It was also contended that in clause 1( b ) of the scheme dated December 15, 1975, full payment to the creditors of the company, as per the claims already accepted and to be accepted up to the date of the company going out of liquidation by the official liquidator, means only such other claims which were not admitted to proof before the official liquidator till this scheme was drawn up. It was contended that by no stretch of imagination this sub-clause ( b ) of clause 1 of the scheme dated December 15, 1975, could mean interest to be paid to the creditors in terms of rule 179 of the Companies (Court) Rules. The learned counsel for the official liquidator has contended that in sub-clause ( b ) of clause 1 of the said scheme, the claims to be accepted up to the date of the company going out of liquidation by the official liquidator would include the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is provided that where a High Court makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it ( a ) shall have power to supervise the carrying out of the compromise or arrangement; and ( b ) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement. If any modification is to be made, then, it is not necessary to issue a fresh notice to the Central Govt. Section 394A provides that the court shall give notice of every application made to it under section 391 or section 394 to the Central Govt., and shall take into consideration the representations, if any, made to it by that Government before passing any order under any of these sections. Thus, it is clear that section 394A does not apply to the proceedings under section 392 of the Act. Under section 392 of the Companies Act, the court possesses ample powers to supervise the carrying out of the compromise or arrangement, or to make such modifications and alterations as may be necessary. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix, a report on the working of the said compromise or arrangement. On a consideration of the report, the court may pass such orders or give such directions as it may think fit. 87. Liberty to apply. (1) The company, or any creditor or member thereof, or, in the case of a company which is being wound up, the liquidator, may, at any time after the passing of the order sanctioning the compromise or arrangement, apply to the court for the determination of any question relating to the working of the compromise or arrangement. (2) The application shall in the first instance be posted before the court for directions as to the notices and the advertisement, if any, to issue, as the court may direct. (3) The court may, on such application, pass such orders and give such directions as it may think fit in regard to the matter, and may make such modifications in the compromise or arrangement as it may consider necessary for the proper working thereof, or pass such other order as it may think fit in the circumstances of the case". The position of law thus crystallised is that under section 392 of the Companies Act this court has ample powers of supervising the carrying out of the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dator. The official liquidator, on October 15, 1979, filed a statement of account under the directions of this court, according to which there would be shortfall of Rs. 5,30,000 in full payment to the creditors with the amount which is available with the official liquidator after taking into consideration 7 lakhs of rupees which would be realised from the bank guarantee. This amount of Rs. 5,30,000 would include the costs, charges and expenses of the official liquidator's office, advocates' fees and other charges which the official liquidator claims. The other question that the bank guarantee ought not to have been given in favour of the Additional Registrar, Rajasthan High Court, Jaipur Bench, Jaipur, and ought to have been given in favour of the official liquidator, is not of much significance. In supervising the scheme and carrying it out, the court has the absolute discretion to ask any responsible officer of this court to assist the court in carrying out or supervising the scheme. This is really unfortunate that there should have been such a great misunderstanding between the ex-management and the official liquidator. As a matter of fact, the official liquidator in distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses, demand of the I.T. Dept. and the payment of dividend and interest to the creditors. It, thus, appears that the official liquidator thinks it proper that the assets of the company should be sold and that he should be permitted to carry on the business of the said company for the beneficial winding-up of the same, viz ., the continuance of the running of two cinemas, Marathan Mandir Cinema and Golcha Cinema, Delhi, as the same was considered to be the most beneficial mode of realisation of the valuable assets of the company in liquidation. As the company has been in liquidation for more than 11 years, the official liquidator thinks it proper that permission should be accorded to him to sell these cinemas so that such interest may be paid to the creditors as might have accrued to them. As stated earlier, the present agreement or arrangement between the petitioners and I.T. Dept. only changes the mode of payment of the I.T. Dept. dues and does not at all affect the rights of the creditors which were determined by the scheme dated December 15, 1975. According to the present arrangement, the I.T. Dept. is likely to be paid 30 lakhs of rupees, and the creditors are to be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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