2007 (12) TMI 290

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....rse 50 per cent of the amount of the balance Sale Proceeds towards the dues of interest on the basis and ratio of Principal outstanding to the Applicants being Secured Creditors pending adjudication of proof of claims after retaining balance 50 per cent of the sale proceeds towards workmen dues, if any. 2. The three applicants are secured creditors of M/s. A.P. Scooters Limited. The said company was ordered to be wound up by this Court by an order dated 18-8-1994 in RCC No. 5 of 1993. Official Liquidator (OL) attached to this Court was appointed as liquidator, who took possession of the assets on 24-1-2006 from the Receiver appointed by High Court of Judicature, Mumbai. As ordered by this Court, the OL sold the assets of the company in l....

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....ct, no further amount can be released or disbursed to the secured creditors. He would like this Court to take into consideration that the entire amount of principal advanced by IFCI, IDBI and Standard Chartered Bank was already paid and therefore he would urge that they have to await final adjudication. 5. The point for consideration is whether secured creditor as of right is entitled to be paid any amount due, even before adjudication claim by liquidator? 6. The application is moved by the applicant under sections 457 and 529A of the Act. A careful perusal of these provisions would show no such power inheres either in the Court or in OL to make interim payment out of liquidation assets to the secured creditors even before claims of s....

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....uidation of the company and the assets of the company would remain charged for the payment of the workers' dues and such charge will be pari passu with the charge of the secured creditors. There is no other statutory provision overriding the claim of the secured creditors except section 529A. This section overrides preferential claims under section 530 also. Under section 529A the dues of the workers and debts due to the secured creditors are to be treated pari passu and have to be treated as prior to all other dues." (p. 795) 8. In view of the above legal position, payment of moneys to secured creditors by way of interim disbursement ignoring section 529A of the Act does not arise. Furthermore, admittedly, the claims made by the secured....