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TMI Blog2005 (9) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the second prayer made for handing over the instalment of Rs. 5 crores with interest does not now survive and as on today the Official Liquidator has retained the amount of Rs. 63.52 lakhs only. Therefore what is required to be considered in the present application is only to the extent of lawful liability of the applicant company or in the alternative whether the Official Liquidator is justified in deducting the said amount or not. 4. It appears that the communication is made to the applicant company by the Official Liquidator as per letter dated 8-6-2004 which inter alia provided that the total amount of Rs. 63,53,898 is deducted for various bills which includes Rs. 14,41,530 for the expenses of security deployed at the factory premises, Rs. 54,000 for valuation charges to be reimbursed to the Centurian Bank, Rs. 41,000 to be paid towards professional fee of Mr. N.K. Shah, the Government approved valuer, Rs. 15,02,400 towards the fees of Central Government Rs. 77,968 towards advertisement charges and Rs. 32,37,000 towards workers dues as per statement of affairs subject to final verification and confirmation by this Court. 5. Mr. Singhi, ld. advocate for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the sale the Court may in a given case in view of the statutory provisions direct the secured creditors to deposit or bear the proportionate share on the basis of their security interest. However, as the money is already realised, the applicant has already received the full consideration of the immovable property. It appears that the money is also realised by disposal of stock/movables over which Centurian Bank as well IndusInd Bank were also claiming the charge. The money realised from the disposal of the factory is of Rs. 23.80 crores and in comparison to the said amount if the amount of Rs. 29 lakhs is considered, it comes to approximately 1.3 per cent. Therefore, keeping in view the said aspects, it is directed that out of the amount of Rs. 14,46,530 being security expenses, the amount forming 1.3 per cent shall be borne by the other secured creditors who are claiming their first charge over the movable for which the money realised is of Rs. 29 lakhs. Considering the facts and circumstances, as the sale of movables as well as the factory has already taken place, I find it proper to apportion and fix the liability for payment of security expenses between the applicant ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no bills are submitted nor it appears that the bills are placed in the present proceedings. Therefore, for the present amount of Rs. 41,000 shall remain as it is and it will be for the Official Liquidator to submit separate report by producing the bills of professional fee of Shri N.K. Shah and the justification thereof. 13. So far as the advertisement charges are concerned, no bill is produced on record. However, it has been stated by the Official Liquidator that the payment is already made. Therefore, it will be for the Official Liquidator to move appropriate report for ratification of such expenses by producing the proof for bill of advertisement etc. 14. As regards the workmen claim is concerned, as per the statement of affairs the Official Liquidator has received the claim of Rs. 32,37,000 and therefore the amount is deducted and retained with the Official Liquidator. It will be for the Official Liquidator to examine the claim and to communicate to the applicant bank regarding admissibility or otherwise of such claim of the workmen. Such exercise shall be undertaken and completed as early as possible preferably within a period of three months from today. After th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct the said fees as expenses. He also submitted that the amount of fee is deducted in accordance with rule 291 (2)( i ) and, therefore, the contention raised on behalf of the applicant-bank may not be accepted by this Court. 17. To appreciate the contentions raised on behalf of the applicant, it is necessary to take into consideration the provisions of section 529 of the Companies Act (hereinafter referred to as "the Act"). As per section 529 of the Act, same rule is to prevail in the proceedings of winding-up as prevailing in the insolvency proceedings as per the Provincial Insolvency Act, 1920 (hereinafter referred to as "Insolvency Act"). Section 47 of the Insolvency Act deals with security of the secured creditors. Therefore, two modes can be said to be available to the secured creditor, namely, ( i ) claiming the amount by remaining outside the winding-up, and ( ii ) to remain inside the winding up and to realise the security interest. However, even if the security interest is to be realised in a property of the company which is in liquidation and when it is under the possession of the Official Liquidator, it may not be possible for the secured creditors to realise the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred by any instrument for such purpose. Therefore, in such a situation with a view to see that the money is realised by disposal of the property of the company in liquidation which is in possession of the Official Liquidator, at the time when the secured creditor is interested to realise the value of the security interest by disposal of the said property, in normal circumstances, the Court is appointing the Sale Committee under the Chairmanship of the Official Liquidator attached to this Court and in the said Committee the representative of secured creditor as well as the workmen and other parties which the Court finds it proper are allowed to be made. Not only that, but after the report of the Sale Committee the report is being submitted to the Court by the Official Liquidator and the sale is confirmed or rejected by this Court. The sale deed is also being executed by the Official Liquidator on behalf of the company in liquidation and at the most the secured creditor may be the confirming party at the time when the conveyance is executed in favour of the purchaser. Therefore, it cannot be said that no duty is being discharged by the Official Liquidator or no power is exercised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lisation of the property of the company in liquidation which are required to be performed in normal course by the Official Liquidator had there been participation of secured creditor or no participation. Therefore, even if the matter is considered for quantification of the fees as per sub-rule (6) of rule 291 by this Court, in view of constitution of the Sale Committee and the sale through the Sale Committee, it would not be a case where the Official Liquidator only remains, as Chairman of the Sale Committee and thereafter renders no other work or duty in capacity as Official Liquidator of the company in liquidation. After the proceedings of the Sale Committee as in normal case report is to be submitted to the Court and all procedure as required for disposal of the property of the company in liquidation for realisation as required under the Companies Act read with relevant Rules are required to be followed and undertaken by the Official Liquidator. Therefore, keeping in view the said aspects even if this Court is to quantify the fees of the Official Liquidator the work to be considered may be in addition to the statutory duty imposed upon the Official Liquidator by the Act read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to be carried by the applicant-company which was holding the security interest in the property. 21. The contention appears to be attractive but on close scrutiny it cannot be accepted for the reasons stated hereinafter. 22. Even if under the Securitisation Act any person having security interest in the property can realise the interest if there is consent of the secured creditor representing more than 3/4th of the interest. Not only that but it was not a case where the rights under the Securitisation Act were pressed in service, after getting the consent of the secured creditors representing more than 3/4th of share. In any event the possession of the property in question was with the Official Liquidator and, therefore, unless the possession was handed over by the Company Court to the applicant-bank it could not have realised the security interest nor could it take further steps under the Securitisation Act. It is on account of arrangement made by the Court by exercising its powers under the Companies Act the sale is effected and the property of the company in liquidation is realised. Therefore, it is not a matter where the applicant-bank has realised the securit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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