Interim disbursement to workers permitted after verification, while rival claims and final distribution ratio remained open.

Interim disbursement from the official liquidator's account was permitted in favour of workers after due verification and identification, because their dues had remained unpaid for a long period. The High Court allowed the fixed deposit to be encashed for this limited purpose and directed payment in equal proportion as an interim arrangement. The direction was expressly made without prejudice to the rights and contentions of the parties, and the disputed inter se distribution ratio between secured creditors and workers was left open for later adjudication.

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Issues: Whether interim disbursement of funds from the official liquidator's account could be directed in favour of the workers, and whether such payment could be made pending adjudication of the rival claims of secured creditors and workers.

Analysis: The order records that the workers' dues had remained unpaid for a long time and that a Chartered Accountant had worked out a distribution ratio, though the secured creditor disputed the same. In that background, the Court granted only an interim arrangement, directing payment to the workers after due verification and identification, and permitting the Official Liquidator to encash the fixed deposit for that limited purpose. The direction was expressly made without prejudice to the rights and contentions of the parties and the remaining dispute regarding the exact inter se ratio was left open.

Conclusion: Interim disbursement of Rs. 55,00,000 to the workers was directed in equal proportion after verification, without finally deciding the rival claims or distribution ratio.

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