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TMI Blog2011 (9) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... ondone the delay in communicating the set off amount to the Court Receiver." 2] It is the case of the Official Liquidator that by an order passed on 26th September 2005 in this petition, the company (Pal Peugeot Limited) was ordered to be wound up. The company had borrowed monies and had financial transactions and dealings with Industrial Credit and Investment Corporation of India, (for short ICICI). ICICI bank was a secured creditor and Debenture trustee and had filed a suit in this Court being Suit No.3636 of 1999 and claimed a decree against the company. In this suit, an order was made on 4th December 2006 and 6th May 2008 decreeing the claim of the debenture trustees in the sum of ₹ 6,85,82,98,695/-. 3] Relying upon these orders it has been stated that the property of the company in liquidation viz., Part A and B were sold to M/s.Metropolitan Infrahousing Ltd. (for short Metropolitan) for ₹ 6,01,00,00,000/- and ₹ 1,25,01,00,000/- respectiely. The orders passed by this Court to that effect are relied upon and it is stated that under the same, the Court directed the Official Liquidator to transfer the set off amount to the Court Receiver, High Court, Bombay on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of winding up i.e. Upto 236th September 2005 and the amount due to the above named party would amount to ₹ 547,28,34,538/- being 95.69% and the set off may be considered to the extent of this amount. 7] The said Chartered Accountants have further stated in their report that the claimant company's representative has also brought to their notice that the orders dated 4th December 2006 and 6th May 2008 passed by this Court were passed after the date of winding up and the office of liquidator was made defendants in the said suit No.3636 of 1999. In the said order the amount due to the debenture trustees was quantified at ₹ 6,85,82,98,695/-. 8] However, in the report, it is stated that the set off amount in the sum of ₹ 5,47,28,34,538/- be approved and the liquidator be permitted to communicate the same to the Court Receiver. It is this estimate of set off and report of the Official Liquidator accepting it, which is disputed by M/s.Metropolitan and they urge that the same should not be accepted. 9] Mr.Devitre, learned Senior Counsel appearing on behalf of Metropolitan submits that the debenture Trust deed is dated 21st February 1996. ICICI filed a suit being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einafter referred to as the Rules and the Rules do not give him unlimited and unrestricted powers so as to grant interest beyond the stipulations therein. Therefore, this is a case where interest as submitted and stated in the report at the rate specified therein only can be granted. Further, the set off also will be in that said sum. He relies upon rule 154 of the Company Court Rules 1959 read with 529A of the Companies Act, 1956 and the following decision of this Court:- (a) 2011 All M.R. 770 (IDBI Ltd. And Ors. Vs. Official Liquidator High Court of Bombay Nagpur Bench) 11] For properly appreciating these contentions, a reference will have to be made to the Company (Court) Rules 1959. These rules have been framed in exercise of powers conferred by sub-sections 1 and 2 of Section 643 of the Companies Act, 1956 and all other powers enabling the Supreme Court of India after consulting the High Courts. That is why in these Rules, Rule 2 is titled as "Interpretation". While, it is true that these rules are not to be read in such a manner as to render the provisions of the Act nugatory, yet, these rules also deal with some of the matters, which cannot be treated as merely procedural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company or where before the presentation of the petition for winding up a resolution has been passed by the company for voluntary winding up at the date of the passing of such resolution." A bare perusal of the same would indicate that the value of all debts and claims against the company shall as far as possible, be estimated according to the value thereof at the date of the order of winding up of the company or where before the presentation of the petition for winding up, a resolution has been passed by the company for voluntary winding up at the date of passing of such a resolution. Rule 156 deals with interest and reads thus:- "156: On any debt or sum certain, payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the winding up order, or the resolution as the case may be, the creditor may prove for interest at a rate not exceeding four per cent per annum up to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an is that a set off for the full amount due to it as per the decree must be awarded. This is because the decree was passed after the winding up order and with full knowledge of the winding up order. The decree was passed in the suit to which the liquidator was a party. The company in liquidation is bound by this decree and it is final. In any event, the metropolitan is entitled to full interest upto the date of payment as decreed. The interest was part of agreement and in any event is reserved, agreed and ordered in the decree. Therefore, Rule 156 and other rules referred to by the official liquidator are inapplicable to the dues of Metropolitan. Further the Metropolitan being secured creditor is entitled to payment of interest at the contractual agreed rate. The rate of 4% prescribed under Rule 179 does not apply in the facts of the present case. Rule 179 reads as under:- "179: Payment of subsequent interest:- In the event of there being a surplus after payment in full of all the claims admitted to proof, creditors whose proof have been admitted shall be paid interest from the date of the winding up order or of the resolution as the case may be, upto the date of the declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator for transfer of the same in its name. It is on the request of Liquidator that this Court directed the Liquidator to transfer and register in favour of Metropolitan 2,95,65,700 and 13,15,800 debentures of the company in liquidation. All this was because the company was wound up on 26th September 2005. Once the company was wound up that the plaint and proceedings in the suit came to be amended by adding/ substituting the liquidator along with the company in liquidation, as a party defendant. Thus, when the decree was passed on 4th December 2006, it is apparent that it was passed against the liquidator, representing the company in liquidation. Therefore, all that the liquidator had permitted the Metropolitan was to apply or rather the liquidator applied on their behalf for transfer of debentures. That does not mean that the liquidator has in any way given a go by to the rules or the intent and object thereof. At no stage, has the liquidator conceded that the sum under the decree would be entitled to be set off and the consequences flowing from the aforementioned rules or the purpose thereof should not be taken into account. There was no case of requesting or pleading set off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deposit in the office of Receiver the appropriate amount and this exercise should be completed. However, merely because the order states that the calculations of the set off amount should be done by the liquidator as per the terms of the decree dated 4th December 2006, yet, there is nothing in the said order nor in the claim of Metropolitan which would enable the liquidator to grant full set off as claimed by M/s. Metropolitan. The Chartered Accountants' report may have been referred to by the Liquidator, yet, when the claims are made against the Liquidator, I do not see how the Liquidator could be called upon to pay anything by ignoring the consequences of winding up. Once the winding up order was passed on 26th September 2005, the computation of principal amount of the non-convertible debentures and the interest thereon upto the date of winding up order cannot be said to be erroneous or improper. In fact, the date of decree is 4th December 2006 but the claim is reckoned from a prior date. The question of set off arises because M/s.Metropolitan is the successful bidder and it had to tender the bid amount or purchase price, that it requests for adjustment or set off. Just be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been made on joint petition of a creditor and all contributories. The Liquidator acts in furtherance of this statutory mandate and, therefore, exercises the powers under section 457 so as to protect and safeguard the interest of all. It is in this backdrop that the liquidator, without in any manner giving up the power to compute and calculate the debts and claims, permitted Metropolitan to apply for and obtain transfer of the debentures in their name. Metropolitan purchased the debentures from time to time but it applied for transfer, on its own showing and in any event after the winding up order and in pursuance of the decree dated 4th December 2006, knowing fully well that it was passed against a company in liquidation. In these circumstances and when Metropolitan also places its bids for the properties of the company all that was permitted after the bid was accepted, is to claim a set off. Once the set off was permitted to be claimed that by itself does not mean that the computation and calculations of the said set off as made by the Metropolitan is final and conclusive. If this was not the case and M/s. Metropolitan made a request in that behalf to the Liquidator through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould it be utilised for payment of principal dues of the unsecured creditor and only thereafter, if a surplus is still available, it may be utilised for repayment of interest to the unsecured creditors was the question for determination. It is in that context and also while determining the rate of interest payable to workmen along with principal dues, in the absence of agreement for payment of interest, that the learned Single Judge referred to all the provisions together with factual details and some of the rules. Therefore, he concluded that the entitlement of SBI to be paid interest at the contracted rate from the date of winding up till the sale of assets of which it is sole charge holder, cannot be denied on the doctrine of estoppel or waiver. This was on the basis of the finding that SBI has not waived its interest on the contracted rate. This judgement is, therefore, of no assistance. 20] It is not necessary to consider any wider question or controversy and particularly whether the Liquidator is bound by the rules or not. The competency of the liquidator to restrict the claim was never in doubt. Before the learned Single Judge R.K.Deshpande, J., the issue in the case of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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