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TMI Blog2012 (6) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... mount available with the Official Liquidator amongst the secured creditors and the workers is to be accepted - COMPANY APPLICATION NO. 310 OF 2011 - - - Dated:- 28-7-2011 - K.M. THAKER, J. D.S. Vasavada for the Applicant. J.S. Yadav, Ms. Amee Yajnik, Ms. Paurami B. Sheth, Bharat Jani and Ms. Nalini S. Lodha for the Respondent. JUDGMENT 1. It was way back in 2001 that the Union representing the workmen of the company in liquidation had taken out judge's summons which was registered as Company Application No. 203 of 2001 wherein below mentioned relief/s were prayed for : "( a ) that this hon'ble court may be pleased to direct the official liquidator to invite offers by inserting advertisement in such newspapers as this hon'ble court deems fit and proper for sale of the properties of Maharana Mills Ltd. (in liquidation) either by outright sale and/or submitting a scheme under section 391 of the Companies Act, 1956, or in the alternative offers for scrapping the mill company or in such manner as this hon'ble court may decide. ( b ) this hon'ble court may be pleased to approve with or without . . ., the draft advertisement for sale and also the draft term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OLR giving the aforesaid details which was filed in Company Application No. 203 of 2001 was served on all respondents including State Bank of Saurashtra. 6. From the record of the said Company Application No. 203 of 2001 any objections or any affidavit disputing the said report was not filed though at initial stage an affidavit dated July 29, 2002, was filed by the bank opposing the application. 7. After the above referred report dated September 29, 2005, the official liquidator had filed another report dated August 30, 2005, in the said proceedings, wherein the official liquidator dealt with the dispute of one M/s. Shree Jagdish Oil Industries Ltd., who claimed to be the tenant of some part of the property of the company in liquidation. 8. Subsequently, another report dated January 23, 2006, came to be filed by the official liquidator in the said Company Application No. 203 of 2001 wherein the official liquidator stated, inter alia , in paragraph 1 as under : "That, this hon'ble court vide orders dated January 10, 2006, directed the official liquidator to check up and verify the calculations given in the official liquidator's report dated September 30, 2005 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to the extent of admissible limit and for the disputed claim, the matter shall be considered by the official liquidator and the same shall be finalised by this court at the time when the disbursement is ordered." 12. Thus, it was as back as in October, 2007 and after prolongation of the hearing of the said Company Application No. 203 of 2001 for about 6 years that the court had, at the relevant time directed, as regards admissible limit, that, "official liquidator shall consider the claim found to the extent of admissible limit", whereas, with regard to the disputed claim the court had observed that, "The matter shall be considered by the official liquidator and the same shall be finalised by the court at the time when the disbursement is to be ordered." 13. It does not emerge from the record that the said order dated October 3, 2007, was carried in appeal by any of the respondents, much less by any secured creditors including the respondent State Bank of Saurashtra. 14. Mr. Vasavada, the learned advocate appearing for the workers has submitted that the said order has not been carried in appeal. Thus, the said order has attained finality after four years since it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs : "(A) To please direct the official liquidator to work out the ratio as per sections 529 and 529A of the Companies Act, 1956, as per the guidelines issued by this hon'ble court in judgment dated May 12, 1999, in Company Application No. 360 of 1998 in the case of Textile Labour Association v. Official Liquidator of Jubilee Mills Ltd. [2000] 99 Comp Cas 189 ; (B) To please direct the official liquidator to disburse an amount of Rs. 37,59,75,625 to 2,908 workmen of Maharana Mills Ltd. (in liquidation) ; and (C) To please further direct the official liquidator to pay the further amount of Rs. 12,37,34,032 towards provident fund and interest thereon up to the date of winding up order inclusive of post closure interest at simple rate of 9.5 per cent. as contained in Payment of Gratuity Act, 1972 ;" 22. From the relief claimed by the workers by way of relief clause No. (C) it appears that in the claims considered by the chartered accountant in 2006, the claim towards provident fund was not taken into consideration and therefore the workers have now claimed, in addition to the other claim, further amount towards PF as well. It is submitted that in view of the subsequent d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below : Rs. (1) State Bank of India 5,73,99,210 (2) IDBI Bank Ltd. 4,44,77,730 (3) Central Bank of India 1,08,58,012 26. As per the said report, the claim of the workers is shown to the tune of Rs. 37,59,75,624. Whereas, the total sum of all the aforesaid three secured creditors would come to about Rs. 11,27,44,952. Thus, the claim of workers is 3 times more than that of the entire claim of all 3 secured creditors put together. 27. There prima facie appears to be some variation in the figure mentioned by the chartered accountant as admissible claim for the purpose of section 529, inasmuch as in report dated January 23, 2006, which reflected the figure to be Rs. 34,85,47,106 while the present report shows the figure to be Rs. 37,59,75,624. An explanation is sought to be tendered by the learned advocate for the workers in this count, however, at this stage it is not considered. 28. Even if the lowest figure out of the different figures with regard to the workers' claim is taken into account, i.e., Rs. 34,85,47,106 and the total claim amount of secured creditors is rounded up to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, 2011. ( ii ) It is clarified that in the event the chartered accountant's report with regard to tentative ratio for disbursement is delayed/not received by July 13, 2011, it would be open to the workmen and the secured creditors to decide, on ad hoc basis, tentative ratio for disbursement of the aforesaid amount and it would be open to the official liquidator to convene such meeting in case of need and submit the recommended ratio on the next date of hearing." 32. After the said order, the official liquidator filed another report dated July 20, 2011 and stated as follows : "(1) That, the official liquidator most respectfully submits that pursuant to the order dated July 7, 2011, passed by this hon'ble court directed the official liquidator to convene such meeting in the case of need and submit the recommended ratio. In this connection, the official liquidator has engaged M/s. Vibhakar J. Trivedi and Co., chartered accountant for fixing the ratio of secured creditors and workers of the company and the official liquidator has held a meeting on July 9, 2011, of secured creditors and workers of the company in which it was decided that the complete set of claim papers alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in paragraph 2 thereof, as follows : "I further submit that pursuant to the aforesaid order the official liquidator has supplied the official liquidator's report dated May 11, 2011. However, the copy of the report of the chartered accountant in respect of verification of the workers' claim in terms of the order dated July 7, 2011, has been not supplied to date." 38. In view of the said averments, counsel appearing for the respondent State Bank of India was requested to ask the concerned officers who attended the meeting to remain present before the court. They have now disputed the record of the minutes dated July 9, 2011 and also alleged that the report of the chartered accountant has not been served on them. 39. In this background it is necessary to recall that the two reports (given in 2005 and 2006) by the chartered accountant were placed on record of Company Application No. 203 of 2001. The details of the said report were also reflected in the reports filed by the official liquidator, i.e., official liquidator's reports dated September 29, 2005 and January 23, 2006. 40. Till then, i.e., until disposal of the said application any affidavits controverting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e report of the chartered accountant with respect to the claim of State Bank of India, respondent No. 3 reveals that the basis for computing the admissible claim of SBI is erroneous inasmuch as the CA has excluded the interest from the date of filing of the civil suit, i.e., February 7, 1985, till the date of winding up order, i.e., December 22, 1989, in terms of the decree passed on January 30, 1992. I, therefore submit that the CA is not justified in reducing the claim of SBI from Rs. 5,73,99,210 to Rs. 3,62,15,578 and the final ratio of distribution determined by the CA on the basis of reduced claim of SBI, cannot be accepted for the purpose of disbursement." 45. What emerges from the aforesaid narration is that : ( a ) The amount certified by the CA in 2006 was never objected by the State Bank of India at the relevant time in Company Application No. 203 of 2001 which came to be disposed of vide order dated October 3, 2007. ( b ) The said order dated October 3, 2007, whereby the court directed the official liquidator to take steps for considering the claim of the workers, has also not been challenged. ( c ) Even in the affidavit dated July 25, 2011, the quantific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made without prejudice to their contentions as regards their claim amounts and the final amount which may be taken into account as claim of workers, and without prejudice to the contentions regarding final ratio for disbursement, then they do not have any objection for such ad hoc disbursement. 48. In fact, learned counsel for two secured creditors, i.e., IDBI Bank Ltd., and Central Bank of India have, suggested below mentioned figures for the said purpose of ad hoc disbursement, subject to their aforesaid objections and contentions. Creditors Dues in crores Ratio % Amount in crores Workers (2,908) 37.60 76.93 9.23 SBI 5.74 11.74 1.41 IDBI 4.45 9.10 1.09 CBI 1.09 2.23 0.27 100.00 12.00 49. So far as the contention raised by learned counsel for the State Bank of India, on the strength of the provisions contained in rules 163 to 168 and 178 is concerned, learned counsel has submitted that the procedure prescribed under the Rules is required to be followed for the purpose of disbursement and for determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court has power to direct disbursement of the available amounts in accordance with the provision of sections 529, 529A and 530 then such power to direct final disbursement would include power to direct ad hoc disbursement as well, therefore, having regard to all of the above discussed aspects and also having regard to the fact that : ( a ) In response to the OLR dated September, 2005 filed in Company Application No. 203 of 2001 any objection either as regards the chartered accountant's report and/or the details with reference to the workers' claim eligible for the purpose of section 529 was not filed/raised by the respondent State Bank of India, ( b ) Similarly, any objection was not filed/raised by the respondent State Bank of India, at the relevant time, in connection with the details of the claim of the workers eligible for section 529A of the Companies Act, and/or with regard to the chartered accountant's report of which reference was made in the said OLR dated January 23, 2006, ( c ) The order dated October 3, 2007, was passed by the court wherein it was, inter alia , observed that : ". . . the official liquidator shall consider the claim found to the extent of admis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,73,99,210 to Rs. 3,62,15,578. In fact, the said respondent State Bank of India has also not raised any dispute with regard to the claim amount by other two secured creditors/financial institutions, viz., IDBI Bank and Central Bank of India, ( f ) And also having regard to the fact that though the winding up order came to be made in December, 1989 and almost 22 years have rolled by since then the workers have not been paid any amount until now, and ( g ) Also having regard to the fact that although the sale proceeds have been received since December, 2010, any order with regard to disbursement could not be passed until now and the amounts are lying idle, without disbursement, with the official liquidator. In view of the above noted facts and circumstances, it appears appropriate to pass order for ad hoc disbursement keeping alive all rights and objections of all the secured creditors including the respondent State Bank of India as well as all the workers, as regards the quantification of the final claim and/or disbursement ratio, and that therefore I am inclined to accept the request for ad hoc disbursement of the amount available with the official liquidator, amongst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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