Liquidation process directions on chartered accountants, valuation notice, and pro rata cost sharing by secured creditors.

The Court directed the Official Liquidator to invite further quotations from chartered accountants because the quotations already received were inadequate for the proposed books-writing and audit work. It also permitted the valuation exercise to proceed after notice to the union, allowed the union to nominate two persons, and authorised appointment of three valuers for the three units. The Court further directed secured creditors to bear the liquidation-related expenses, including accounts, audit, valuation, insurance and security costs, on a pro rata basis according to their secured dues.

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Issues: (i) Whether further quotations were to be invited from chartered accountants for writing the books and conducting the audit, (ii) whether the valuation exercise was to proceed with notice to the union and appointment of valuers, and (iii) whether the expenses were to be borne by the secured creditors in proportion to their dues.

Issue (i): Whether further quotations were to be invited from chartered accountants for writing the books and conducting the audit.

Analysis: The report disclosed that the quotations already received were inadequate for the contemplated work. The Court directed the Official Liquidator to invite quotations from additional chartered accountants, including names suggested by the union from the Official Liquidator's panel, so that the process could move forward.

Conclusion: Further quotations were to be invited from at least 20 chartered accountants.

Issue (ii): Whether the valuation exercise was to proceed with notice to the union and appointment of valuers.

Analysis: The Court accepted the prayer relating to valuation and directed that the union be notified through its counsel. The union was permitted to nominate two persons, and the Official Liquidator was authorised to appoint three valuers for the three units.

Conclusion: The valuation exercise was permitted to proceed with notice to the union and by appointment of three valuers.

Issue (iii): Whether the expenses were to be borne by the secured creditors in proportion to their dues.

Analysis: The Court recorded the need for the secured creditors to contribute towards the expenses arising from the proceedings, including the costs of accounts, audit, valuation, insurance and security arrangements, and directed pro rata sharing according to the extent of their secured debts.

Conclusion: The secured creditors were directed to bear the expenses pro rata in proportion to their dues.

Final Conclusion: The Court issued directions to facilitate the liquidation process, including further engagement of chartered accountants, valuation arrangements, and proportionate contribution of costs by secured creditors.

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