TaxTMI 
TaxTMI 
2008 (3) TMI 486
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....pplications on board. 2. In each of these twelve applications, the applicant asserts that the applicant security agency was appointed under the instructions of the Official Liquidator to provide security arrangement in respect of immovable and movable assets of the concerned company in liquidation or in relation to those companies wherefor the Official Liquidator was appointed as Provisional Liquidator. According to each of these applicants they have provided security arrangement for sufficiently long time, which was duly approved by the Official Liquidator and also ratified by the Company Court. However, the charges payable for the said services have either remained unpaid in full or only paltry payment has been made; as a result, substantial amount is unpaid and is outstanding, payable by the Official Liquidator. The applicants have, therefore, approached the Company Court for a direction against the Official Liquidator to disburse the outstanding dues payable to them. 3. The principal reason cited for non-payment of the dues is on account of unavailability of funds in the account of the concerned company for whom the security services have been provided by the applicant. A....
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.... of the said ten agencies, Reliable Industrial Services, C.D. Securities Network Limited, Garuda Keepers (India) (P.) Ltd. and Bhagwati Allied Services are concerned, they have been engaged in 20 or more assignments respectively, unlike other six security agencies who have been engaged in far lesser number of assignments. In that, Crack Detectives (P.) Ltd. is engaged in respect of eight assignments; whereas Sadguru Security and Consultancy Services in five; Mahalaxmi Security Services in three, Guardian Facilities Management (Nagpur) (P.) Ltd. in two; Industrial Security and Fire Services Bombay (P.) Ltd. in one and Seven Star Security Services India (P.) Ltd. in one. To ascertain as to whether the security agencies are controlled by common persons in different names, during the course of hearing, counsel appearing for the parties were called upon to furnish information regarding the names of Directors/Proprietors/Partners of the respective security agencies. Pursuant thereto following information has been placed on record :- Sr. No. Name of the Security Agency Name of Directors/Proprietor/ Partners 1. C.D. Security Services Network Ltd. 1. P.P. Singh Ahluwalia -....
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....miss in the office of the Official Liquidator either on account of act of commission or omission with purpose or otherwise. Whether it is a case of laxity of the officials in the office of Official Liquidator or collusion by some of the officials to benefit selected security agencies, is not only a matter of serious concern but also requires deeper enquiry at the appropriate level. 9. Indubitably, the Official Liquidator is appointed to protect and preserve the properties of the company in liquidation for the benefit of the stake holders in that company. The role discharged by the Official Liquidator is similar to one of parens Patriae and in any case that of a trustee appointed under the orders of the Court for and on behalf of the stakeholders in the concerned company. The provisions of Companies Act, abundantly make it clear about the role and duty of the Official Liquidator, which he is expected to discharge, after being appointed by the Court in respect of the property of company in liquidation. Indeed, while discharging that role, the Official Liquidator has to avail of logistical support from different agencies, such as Chartered Accountants, Valuers and in particular sec....
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....he issues that may have to be considered during such enquiry, amongst others, ought to be :- I.Whether the number of security personnel deployed in the respective assignments was appropriate, having regard to the nature of assets (movable and immovable)? (It has been noticed in some cases that even in respect of insignificant assets of the company in liquidation, the number of security personnel engaged by the concerned security agency-purportedly under instructions of the Official Liquidator, appear to be disproportionately large.) II.Whether there was any justification for not expediting the process of sale of assets in question of the concerned company? III.Whether the assets which were available for sale, on account of long passage of time, have been siphoned off? This issue would arise in some of the cases where the creditors or other stakeholders have alleged theft or siphoning away of the assets inspite of security arrangement provided by the Official Liquidator. IV.Whether there is dispute about the fact that although the security agency has claimed charges for having deployed particular number of security personnel on the site, but in fact none or less number o....
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....which gives description of the movable properties lying in the disputed premises in four different rooms as follows :- Sr. Nos. Particulars Qty. Nos. Sr. No. In Valuation Report Room No. 1 1. Fire Extinguishers 10 1 2. Electrical Control Panels with Capacitors, Switch Boards etc. 1 2 3. Computer Tables size: 4'9"x2'x2½' 17 3 4. Steel Cupboards Size : 4'x2½'x11/2' 1 5 5. Slotted Angle Racks Size: 2'x4'x7' 3 6 6. Tube Light with Fittings 48 7 7. Type Writers : Make: Godrej 2 8 8. Chairs 10 9 9. Vacuum Cleaner 1 11 10. Screen Monitor Size : 11" and 12" Model: Essen Make; Wipro 48 12 11. Tower Cabinets Desk Top Model: Fact Girder 02 06 } 13 Sr. Nos. Particulars Qty. Nos. Sr. No. In Valuation Report 12. Printers with Key Board 3 14 13. Ceiling Fan Size....
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....y in liquidation, the Official Liquidator proceeded to appoint the applicant security agency to guard the property. Indeed, the Official Liquidator has taken approval of the Company Court for appointment of three guards per shift and two supervisors in all three shifts. The question is whether the recommendation to appoint such large number of security guards in relation to the property of the company in liquidation as referred to above was warranted? I will advert to this aspect a little later. (d)It is not in dispute that the movable properties referred to in the inventory belonging to the company in liquidation have been sold in December 2003. Thereafter the strength of security guards deployed at the site has been reduced to only one security guard per shift. Insofar as arrangement provided after December 2003 is concerned, there can be no difficulty in accepting the claim of the applicant in that behalf. (e)The question is, whether it was appropriate to permit deployment of three security guards per shift and additionally two supervisors for all the three shifts for the earlier period, having regard to the nature of property which was required to be protected. Significan....
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.... the observations made herein to determine the amount payable to the applicant in respect of the subject-matter in this application. That amount will be obviously payable from the sale proceeds of the immovable property of the company in liquidation, if any. In the event the company in liquidation has no funds, the Court may have to issue directions to the Secured Creditors to take over the liability for having provided the security to protect the property in question. At any rate, it is not possible to direct the Official Liquidator to pay the amount from the consolidated fund, which is the one of the request made on behalf of the applicant. (g)It is made clear that I am not expressing any opinion in respect of the claim of the M/s. Indra Optical Company who has taken out Company Application No. 1040 of 2007 for relief of possession of the self-same immovable property, which application will have to be decided on its own merits in accordance with law. 15. Re : Company Application No. 738 of 2007 (a)Insofar as the claim of the applicant in Company Application No. 738 of 2007, the winding up order in respect of respondent company was passed on 23-11-1998. The Official Liqui....
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....for tablet coating with motor and gear drive 1 33. Motor and wheel pulley mounted on a wooden table 1 34. S.S. Drum with tap at the bottom - capacity 200 and 300 litres each approximately 2 35. S.S. Vessel mounted on frame 1 36. Small pressure vessel with motor and pipes mounted on it with nozzles on a wheel trolley 1 37. Plastic drums without chemical 6 38. Cap Sealing Machine (manually operated) 1 39. Auto Clave (IRI 24) 1 40. Table manufacturing machine 1 41. Tablet strip punching machine 1 42. S.S. mixing horizontal vessel with extruder, Motor and gear drive 1 43. Auto clave 3 44. S.S. Vessel with motor and one agitator holder (vessel 300 litres and 100 litres each) with M.S. stand 1 The immovable property was handed back to the owner after the movable assets were sold on 4-6-2003. The sale proceeds from the movable assets is only a sum of Rs. 3,02,000, whereas the claim of the applicant towards security charges is in the aggregate sum of Rs. 12,18....
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.... the Official Liquidator in the reply filed to this application admitted the liability to pay the amount, does not preclude the Company Judge to enquire into the specific issue in the backdrop of the larger issue regarding the questionable conduct of the Officials at the relevant time. In my opinion, until proper enquiry is conducted and larger issues enquired, security charges from 23-11-1998 onwards may be disbursed to the applicant on the assumption that the agency had deployed only one security guard per shift on the site. The Official Liquidator shall then adjudicate the claim of the applicant on the basis of the observations made herein. (e)Significantly, the applicant has already received Rs. 3,18,010 by now towards outstanding bills. After giving adjustment of that amount, the Official Liquidator may take steps to pay the balance on the above basis, if any, to the applicant by recovering the same from the secured creditors in terms of order dated 22-6-2001 in the event of any shortfall. The secured creditors will be free to contest the said demand, if that is open to them in spite of order dated 22-6-2001. The Official Liquidator while considering the claim of the applic....
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....rawer 2'x6' 7 Broken Safeguard 1 4. Store on First Floor Steel Cabinet 2 Slotted Angle Rack 3'x8'x1' 8 Stock of Refractory feeder pipes Sr. Nos. Description Qty. (Nos.) 5. North Side First Floor 2 Rooms - Steel Cabinets 2 Sl Angle Rack 6'x6'x1' 2 6. East Mid Wing Ground Floor Stock of Bottles Approx. 2 truck load 13MT 7. North Side Ground Stock of Bottles - 1 Truck Load 8. Annealing Furnace without drive approx. 8 Mt Withdraw gears without motor and Electricals approx. 10MT 9. Bottle Elevator 100 Kgs. 10. Bottle Making Machine Double Sides 8 + 8 St. approx. 1.5 M.T. LOT 11. M.S. Recuperator connected to chimney approx. 2 MT 12. Box Furnaces condoned St.Wt. Approx. 200 kgs. Stock of bottles approx. 1 truck load 2 13. Manual Bottle Machine approx. 1 MT Single ....
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....rvisors) to protect the assets of the company in liquidation. Significantly, after the process of valuation was completed and report received, the movable assets of the company in liquidation were sold on 27-8-2003, only for a sum of Rs. 16.50 lakhs. Whereas, the applicant claims security charges from 15-6-1999 till December 2007 in the sum of around Rs. 64 lakhs. Out of the said demand, the Official Liquidator has already paid a sum of Rs. 16,50,843 to the applicant. Thereby the balance amount payable to the applicant is Rs. 46,58,297.46 ps. As aforesaid, the Official Liquidator could sell the movable assets of the company in liquidation only for Rs. 16.50 lakh and the sale proceeds so received have been made over to the applicant towards part payment. There is no other amount lying with the Official Liquidator. The fund in relation to the company in liquidation available with the Official Liquidator is only Rs. 21,858. As a result, the Official Liquidator is unable to pay the balance amount claimed by the applicant. (d)As in other cases, the question that needs to be addressed in this application is whether it was essential to provide such heavy security to protect the stated ....
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....nt pressed into service Official Liquidator's report which refers to the letter sent by the applicant dated 29-9-2001 placing on record the need for engagement of security on the Eastern side. None of these arguments commend me. For, in the earlier part of this order I have already adverted to the pattern which flows from each assignment. The inescapable conclu-sion is, it is an act of commission and omission of the officials in the office of the Official Liquidator with purpose, completely disregard-ing the interest of the stakeholders of the company in liquidation for whom the Official Liquidator was expected to act as Custodia Legis. Suffice it to observe that the claim of the applicant cannot be straightway accepted merely because of the communication from the Official Liquidator to arrange for seven guards for the first and second shifts and eight guards in night shift with one supervisor for each shift. Instead, all the aspects will have to be considered by the Official Liquidator while readjudicating the claim of the applicant. While doing so, the Official Liquidator shall permit the other stakeholders to participate in the proceedings who would be free to place on record th....
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....nbsp; (c) Spray Booth with drive arrangement for movement of job (d) Implnyorolised Bed arrangement with cyclodrive as additional accessory 4. Swing Machine for textile yarn etc., manufactured by M/s. Sodemetex, France, used for rubber covering the eleastic strips for Hosiery items such as undergarments consisting of : 1 No. Roll Winding Machine vertical position for wire products with red quear drive unit (3 Nos.) Pressing Machine suitable for pressing work with drive red gear etc., (1 No.) (Wire Drawing Processing Machine manufactured by M/s. Drucka Feinmechanic Wuppertal Barmer for wire process with dies and drive unit (1 No.) Wire drawing and processing machine with drive drain belt drive pulley and rolling attachment in closed cabine (6 Nos.) Winding drum for wire or textile yarn with stand bearings etc., 500 mm. Dia, 600 kg. drum (9 nos.) Winding accessory unit for textile or wire processing machine (1 No.)  ....
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....ed Accessories 4' bed-6'c/c dist. (k) Welding Transformer 100 amp. Cap. 2 Nos. (l) Welding Transformer 50 amps. 1 No. (m) Welding Machine - 300 amps. 1 No. (n) Control panel 1 No. MISCELLANEOUS 6. (a) Head tools, microscoping instruments etc. One set (b) Steel Cupboard (Almari) 6' high with files, records, small items 2 Nos. (c) Cabinet steel cupboard (almari) 4' high (local make) 1 No. Sr. Nos. Particulars Qty. Nos. (d) Pedestal Fan - Ralli Fan 1 No. (e) Wooden Work Tables 3 Nos. (f) Electric Oven - 1' x 9" x 1.5 size 1 No. (b)Insofar as immovable assets of the company in liquidation are concerned, the same is a Plot bearing No. A-2/1204, Panoli Industrial Area, GIDC, Ankleshwar, Gujarat State admeasuring about 1920 sq.mtrs.. The said plot is located near Mumbai-Ankleshwar Highway at a distance of 8 kms. from Ankleshwar where small and medium industries are located. The material....
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....lication No. 993 of 2006 (a)Insofar as Company Application No. 993 of 2006 is concerned, the same pertains to security charges offered in relation to M/s. Mohan Carpets (I) Limited (Company in Liquidation). The said company was ordered to be wound up on 17-11-1998. Consequent thereto, the Official Liquidator took possession of the immovable and movable assets of the company in liquidation. It appears that the immovable assets is a plot bearing No. 39, Sector-II, Kandla Special Economic Zone, Gandhidham, Kutch (Gujarat), admeasuring about 4,070 square metres or thereabout. Insofar as the movable assets are concerned, which consist of plant and machinery, stock, finished goods etc. lying on the said plot, have been valued to the extent of Rs. 3.85 crores. Obviously, having regard to the substantial value of the movable assets of the company taken over by the Official Liquidator, the security agency was called upon to provide three security guards per shift (nine guards per day) with one supervisor. The applicant security agency was appointed on 1-11-2001 to protect the movable and immovable assets of the company in liquidation. The applicant security agency has offered services si....
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....for want of payment after giving sufficient notice to the Official Liquidator in that behalf. On the above arguments, it was contended that the relief as claimed in the present application ought to be granted. (d)There can be no doubt that it is the primary responsibility of the Official Liquidator to appoint security guards as soon as possession of the assets of the company in liquidation is taken over by the Official Liquidator, in terms of section 457(2A) of the Act. There can also be no doubt that once the dispensation recommended by the Official Liquidator is ratified by the Court, no further enquiry into that matter would be necessary. However, that course is necessitated in cases dealt with in this order as it is noticed that although the movable assets were of insignificant value, the security arrangement provided was far excessive and unwarranted. That arrangement was, per se, not commensurate with the value of the movable assets involved. In fact, the security charges have far exceeded the value of the movable assets received by way of sale proceeds, as is demonstrated in the chart which forms part of this order. Moreover, it cannot be overlooked that ordinarily the Co....
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....)Indeed, this amount has not piled up in one year's time as outstanding dues, but allowed to get accumulated for several years without receiving any amount at all or part payment in respect of some assignment. It is inconceivable that the security agencies would continue to provide efficient and effective services by deploying adequate number of guards for all these years without receiving any payment at all. This does not stand to commercial wisdom of a prudent businessman. It is not necessary for me to burden this order with this aspect any further, except to observe, as has been found in the earlier part of this order that, if the totality of the situation prevailing in the office of the Official Liquidator is to be analysed, it gives an impression that all this was happening in connivance with the security agencies and the officials of the Official Liquidator. Those aspects will have to be addressed independently and taken to its logical end for which necessary directions are being issued in this order. (h)Insofar as the agreement of the learned counsel for the applicant that the security agency is given no option to discontinue the security arrangement - if no payment is re....
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.... were valued to the extent of around Rs. 3.85 crores. It is also seen that neither the movable nor the immovable assets of the company in question could be sold due to pending proceedings before the D.R.T. However, the amount which is payable to the applicant can be offered only from the sale proceeds. I am informed that the sale of the assets of the company in liquidation already notified for 17-3-2008 by the Debts Recovery Tribunal, Ahmedabad. In case the sale does not proceed further for some reason, the Official Liquidator shall forthwith submit report before this Court seeking direction to recover the outstanding dues payable to the applicant agency from the secured creditors in proportion to their claim amount. 19. Re.: Company Application No. 614 of 2007: (a)Insofar as Company Application No. 614 of 2007 for recovery of outstanding dues in relation to security charges provided to preserve the assets of Rajesh Dying & Bleaching Works Ltd. (company in liquidation) is concerned, it transpires from the record that the winding up order came to be passed on 19-2-1999. Consequent thereto the Official Liquidator took over possession of movable and immovable assets of the compa....
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....e Engine 1 17. Small washing m/c 1 18. Tricals main incoming out door transformer 11000 V-440V capacity KVA 750 (National Elect.) year 1966-wt.1421 kg. 1 19. Load distribution Panal (Capacity circuit breaker etc.) Near entrance gate 20. National Electrical Industries Ltd. a. Sr.No. SL-4/14 V-11000 m/c No. 2705 -"- b. Sr.No. SL/64/225 (for Kapal dying) One -"- c. Sr.No. 65/103 Rating : 500 KVAR m/c No. 2244. d. Vijay Synthesis Ltd. Sr. No. 62/042 One -'- e. The Mysore Electronic Company, Mysore. One -"- M/c N0.1035,KVA:630, Sr.No. 62/104, Wt.4800 kgs. Subhash Silk Mill Material (Transformer Sr. Nos. Items Qty. Location (Total mass with oil-2300 kg.) V : 11000, KVA : 640, Sr.No. 11008, Year : 198....
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.... on 13-8-2002. Eventually, the Official Liquidator was permitted to engage valuer in September 2002. Thereafter, valuation of the movable assets was done and the said assets were put to sale on 14-1-2003. After the movable assets were sold in the Court auction it fetched only Rs. 15.30 lakhs. After that sale, the security arrangement was reduced to only two security guards and one supervisor per shift totalling 6 guards and one supervisor round "O" clock. Significantly, the security charges claimed by the applicant for all this period has piled up over Rs. 34 lakh as on 31-12-2007. (c)The counsel for the applicant would contend that the applicant cannot be blamed for the situation as the applicant had no option but to provide sufficient number of security guards having regard to the situation prevailing at the factory premises. Indeed, this stand appears to be attractive if considered as an isolated case. However, as I have found earlier, the pattern which emerges from all the assignments and the steps taken by the Official Liquidator during the relevant period, is obviously an act of omission or commission with purpose, there was no reason for the Official Liquidator to not sub....
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....conclusion is that the concerned Official Liquidator was more than willing to spend on security charges in the guise of preserving the property, instead of taking prompt steps to sell the assets of the company in liquidation so as to ensure that fair returns/dividend is offered to the creditors and other stakeholders including the workers of the company in liquidation. (e)In my opinion, therefore, the claim becomes questionable, which aspect will have to be enquired into in appropriate proceedings. For the time being, suffice it to observe that it is not possible to straight-way accede to the claim of the applicant regarding outstanding dues on the assumption that services were offered for such high number of security guards deployed on the factory premises for the relevant period. All aspects will have to be considered by the Official Liquidator having regard to the observations made in this order. After appropriate enquiry, the Official Liquidator will be free to make payment of the amount determined to the applicant only from the sale proceeds of the assets of the company. 20. Re.: Company Application No. 615 of 2007 (a)Insofar as Company Application No. 615 of 2007 in ....
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....en appointed in terms of order dated 21-2-2001. Consequent to that order the Official Liquidator took possession of immovable properties situated at five different places belonging to the company in liquidation on different dates. Two properties are situate at Ratnagiri which consist of land and structures. The lands Gate Nos. 1761 and 1768 at TVA Lanja, Village Gawhane are 212 and 352 gunthas, i.e., five acres and over eight acres respectively, whereas area of room Nos. 205 and 206 (combined) is 225 sq.ft. Carpet area, 270 sq.ft. Built up area excluding furniture and fixtures. Besides, there are three other properties which have been taken over by the Official Liquidator situate at Dahivad Tal. Shirpur, Dist. Dhule, at Shirpur proper-District Dhule, at Murbad-District Thane. The land situate in Thane District is agricultural land and a bungalow and possession whereof has been taken recently on 9-5-2007. However, one security guard per shift has been appointed in respect of said property. Similarly, only one security guard per shift is appointed in respect of the property situate at Shirpur which admeasures about 1299 sq. ft.. Insofar as property as Dahivad is concerned, the same a....
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....ets of the company in liquidation on 26-6-2000 and simultaneously appointed the applicant as security agency to safeguard the assets of the company in liquidation. The applicant deployed two guards per shift in three shifts i.e. totally six guards round "O" clock. However, this strength of security guards has been reduced with effect from 25-8-2005 to only one guard per shift. The assets of the company in liquidation have been sold in Court auction on 4-5-2006. In view of the sale of the assets, the services of security agency was discontinued from 6-6-2006. It is seen that no payment has been made to the applicant since the date of appointment. To preserve the assets of the company which were originally estimated at around Rs. 10 lakhs, two guards per shift were deployed on the factory premises. Whereas, the claim as aforesaid of the applicant agency has piled up to around Rs. 14 lakhs towards security charges in respect of the said immovable assets. However, when both the movable as well as immovable assets were put to sale, the sale has fetched only Rs. 17 lakhs. The figures speak for themselves as to the manner in which the security services were continued for unreasonably long....
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....ty agency was not permitted to enter the premises on and from the date when the possession of immovable property has been taken over by the owner. That fact is conceded in the communication sent by the security agency dated 3-6-2007 addressed to the Official Liquidator. The security agency called upon the Official Liquidator to relieve them from their assignment and pay the outstanding dues. There is nothing to indicate as to what steps have been taken by the Official Liquidator in spite of said communication. The fact remains that originally nine security guards and three supervisors were appointed on 20-2-2002 to protect the movable property of the company in liquidation, the estimated valuation whereof is over Rs. 40.20 lakhs. However, strength of security guards came to be reduced to two guards per shift from 6-2-2005 after the owner took over possession of the immovable property and gave an undertaking to preserve the movable assets of the company in liquidation. As a matter of fact, after February, 2005, in what manner two security guards were providing security to the movable assets has not been placed on record. On the other hand, the communication sent by the security agen....
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.... 1 1 Lifting Trolley Insofar as immovable assets are concerned, the factory premises is situate at Survey Nos. 290/297, Village Kondle, Kudus Aghai Road, Tal. Wada, Distt. Thane. Initially nine security guards were appointed to safeguard the property to work in shifts namely two guards and one supervisor per shift. However, after deliberations with the secured creditors in the meeting of 13-6-2000, it was agreed that two security guards per shift and over all one supervisor, thus making the total strength to seven persons, would be more than sufficient. Going by the said report which is a conscious decision taken by the Official Liquidator at the instance of secured creditors. It is possible to take a view that the security strength provided at the site was necessary. However, the question that remains to be addressed is why appropriate steps were not taken by the Official Liquidator for disposal of the movable and immovable assets expeditiously although there was no impediment for such sale. Almost eight years have elapsed but no steps to sell the assets in question have been taken. The statement submitted by the Official Liquidator ....
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..... These aspects will have to be considered by the Official Liquidator in the light of observations made in the earlier part of this order while examining the claim of the applicant and to submit report seeking appropriate directions regarding payment to the applicant as well as sale of the immovable properties in question. GENERAL 26. That takes us to the nature of directions to be issued in the present set of applications so as to obviate further loss to the stakeholders of the company in liquidation. In that context I had called upon the Official Liquidator to furnish the names of companies where the secured creditors have set up their claims. Pursuant thereto the Official Liquidator has placed on record that there are about 37 companies in relation to which the secured creditors have registered their claims. Insofar as those companies are concerned, the Official Liquidator may be free to call upon the secured creditors to take over the liability of security services engaged for preservation of assets of the company in liquidation. The secured creditors may be called upon to deposit commensurate amount. If such deposit is made, the Official Liquidator may be free to disburs....
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.... can be satisfied or settled out of such amount to the extent it is found to be acceptable and legitimate. 30. In other words, in all cases, unless there is impediment in proceeding with sale of the assets of the company in liquidation, the Official Liquidator shall be obliged to take immediate steps for sale of the assets of the company in liquidation. While putting up the assets of the company in liquidation for sale, the Official Liquidator may have due regard to the fact as to whether it is possible to sell the same as one lot or separately so as to derive best returns therefrom. In case, the Official Liquidator is of the opinion that the movable assets should be put up for sale in separate lot, he may do so by seeking prior directions from the Court in that behalf at the earliest. In any case, once the movable assets of the company are sold and the sale of immovable assets is required to be deferred, depending on the nature of immovable property, the Official Liquidator shall issue instructions for reducing the number of security personnel so as to lessen the liability of the company in liquidation on that head. 31. It was argued on behalf of the applicants that the issu....