Court affirms workmen dues, criticizes Bank's challenge, directs interest details for adjusted distribution.

The Court upheld the Official Liquidator's determination of workmen dues totaling Rs. 7.45 crores, rejecting the Corporation Bank's challenge based on an advocate's report lacking credibility. The Bank's attempt to delay disbursement was criticized, affirming the fairness of the Liquidator's process. Both the Bank and workmen were entitled to pro-rata distribution under the Companies Act, ensuring preferential payment based on recovered assets. The Bank was directed to provide interest details to the Liquidator for adjusted distribution, with provisions for future recoveries and consideration of additional workmen separately.

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Issues: Determination of workmen dues, Dispute over amount payable, Challenge to determination process, Principles of pro-rata distribution, Interest accrual on recovered amount

Determination of workmen dues:
The Official Liquidator sought directions from the Court regarding the certified list of 121 adjudicated claims of ex-workers and the amount due to them, totaling approximately Rs. 7.45 crores. The determination was based on professional assessments and after granting all stakeholders, including the Bank and ex-directors, a fair hearing. The Corporation Bank disputed this amount, citing an enquiry report by an advocate suggesting an inflation of dues. However, the report was criticized for lacking expertise in accounting and not following due process, unlike the Official Liquidator's thorough examination.

Dispute over amount payable:
The Corporation Bank's challenge to the determined amount of Rs. 7.45 crores for the 121 workmen was based on the advocate's report, which was deemed self-serving and lacking credibility. The Bank's attempt to delay or obstruct the disbursement of workmen's dues was criticized as unfair and not in line with professional assessments made by the Official Liquidator and approved Chartered Accountants.

Challenge to determination process:
The Bank's reliance on the advocate's report was questioned, as it attempted to undermine the Official Liquidator's findings without proper expertise or due process. The Official Liquidator's initial determination was upheld as fair and comprehensive, and any doubts raised by the Bank were considered vague and unsubstantiated, especially concerning alleged chance discoveries of salary slips.

Principles of pro-rata distribution:
Both the Corporation Bank and the workmen were recognized to have a pari passu charge under Sections 529 and 529A of the Companies Act, entitling them to preferential payment. The concept of pro-rata distribution was explained, with calculations based on recovered assets and outstanding liabilities. It was emphasized that the dues payable to the workmen should be based on the original determination by the Official Liquidator and Chartered Accountants.

Interest accrual on recovered amount:
The Corporation Bank was directed to provide details of interest accrual to the Official Liquidator within four weeks. The distribution of recovered amounts, including interest, was to be made on a pro-rata basis, with adjustments for previous payments to the workmen. The possibility of further amounts being recovered from asset disposals was acknowledged for future consideration. The issue of additional workmen was to be treated separately, with the Official Liquidator granted liberty to file a fresh report if needed.

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