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of <h1>Court orders secured creditor to deposit Rs. 5,00,000 for liquidation proceedings</h1> <h3>Official Liquidator of Vajra Cements & Minerals (P.) Ltd. Versus Karnataka State Industrial Investment & Development Corpn. Ltd.</h3> Official Liquidator of Vajra Cements & Minerals (P.) Ltd. Versus Karnataka State Industrial Investment & Development Corpn. Ltd. - TMI Issues:1. Application filed by Official Liquidator under section 446 of the Companies Act for directing respondent to furnish details of interest accrued on sale proceeds and to deposit a specific amount.Analysis:The Company in liquidation was wound up, and the respondent, a secured creditor, sold assets for Rs. 75,00,000. Various amounts were appropriated by different creditors, leaving a balance of Rs. 19,42,000. The court directed the respondent to deposit Rs. 5,00,000 with the Official Liquidator for further proceedings of the liquidation to invite claims and decide dividends under Section 529A of the Companies Act. The respondent was allowed to retain the remaining balance to meet other liabilities and statutory obligations once the company is wound up.Conclusion:The court clarified that after paying Rs. 5,00,000 to the Official Liquidator, the respondent could retain the balance. If claims from workmen arise, the Official Liquidator will request details of profits earned from the appropriated amounts by all creditors to decide dividends. If the remaining balance can cover workmen's claims, the respondent must deposit the required amount. If more funds are needed, all creditors must proportionately deposit the necessary amounts. The respondent was directed to deposit Rs. 5,00,000 within four weeks, and the application was partially allowed.
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