2008 (5) TMI 705

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of Rs. 2,82,59,800/- from the Secured Creditors. 3. This Court has issued notice on 20.11.2006. Vide order dated 09.02.2007, Textile Labour Association was joined as a party - respondent. The Official Liquidator has filed his further report on 26.02.2007. Affidavit-in-reply is filed on behalf of Textile Labour Association on 07.03.2007. Affidavit-in-reply is filed on behalf of Kotak Mahindra Bank Limited on 22.03.2007. The Official Liquidator has filed further report on 02.04.2007. Affidavit-in-rejoinder is filed on behalf of Textile Labour Association in response to the affidavit-in-reply filed by Kotak Mahindra Bank Limited. On behalf of ICICI Bank Limited, an affidavit-in-reply is filed on 28.11.2007. Similarly, on behalf of IFCI Bank Limited, an affidavit-inreply is filed on 21.01.2008. Further affidavit was filed on behalf of Textile Labour Association on 08.04.2008. After completion of pleadings, matter is taken up for hearing. The Court has heard at length Mr. J. S. Yadav, learned advocate appearing for the Official Liquidator, Mr. B.H. Bhagat, Mr. Sandeep Singhi, Mr. N. K. Pahwa, Ms. Nalini Lodha and Mr. D. S. Vasavada, learned advocates are heard in the matter on behal....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... after having examined the documents submitted by ICICI & IDBI and also after examining the record maintained at the office of Registrar of Companies, has determined the position of the Secured Creditors having first charge on the properties of the Company as under :- A) "A charge of Rs. 2.50 Crores is created in immovable properties of the Company and registered in favour of ICICI as Debenture Trustee on 14.05.1987. Another charge of Rs. 10 Lacs is also created on immovable properties of the Company and registered in favour of ICICI as a debenture trustee on 29.11.1988. Therefore, ICICI is a Secured Creditor to an extent of Rs. 2,60,00,000/- as a debenture trustee holding first charge on immovable properties of the Company pari passu with other joint first charge holder financial institutions. B) It is further seen that a loan of Rs. 3,30,00,000/- was sanctioned to the Company by a consortium of financial institutions and the disbursements were made by them to the Company as under :- Sr. No. Name of the Financial Institution Loan Sanctioned (Rs.) Loan disbursed (Rs.) 01. ICICI 55,00,000/- 51,00,000/- 02. IDBI 1,65,00,000/- 1,53,00,000/- ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on to the Secured Creditors to refund the amount as indicated in the prayer clause. 10.Mr. J. S. Yadav, learned advocate appearing for the Official Liquidator and Mr. D. S. Vasavada, learned advocate appearing for the Textile Labour Association have strongly urged that the direction sought for by the Official Liquidator in the present report are required to be granted. Mr. Yadav has taken the Court through the various reports filed by the Official Liquidator as well as the judgment of the Hon'ble Supreme Court in the case of ICICI Bank Limited (now substituted by Standard Chartered Bank) V/s. SIDCO Leathers Limited and others, 2006 (10) SCC 452. He has also distinguished the order passed by this Court in Company Application No. 667 of 2006 decided on 26.10.2007. 11.Mr. D. S. Vasavada, learned advocate appearing for Textile Labour Association has referred to various affidavits filed on behalf of Textile Labour Association. He has specifically invited the Court's attention to the last affidavit which was filed on 28.04.2008 wherein he has raised several issues and submitted before the Court that United Bank of India's claim should not be taken into consideration as ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r of M/s. Rustom Mills & Industries Limited and others passed in Company Application No.657 of 2006 decided on 26.07.2007, it was strongly urged that for the purpose of working out the ratio amongst the Secured Creditors and workers, the Secured Creditors having second charge should also be taken into consideration. It was further submitted on behalf of the Secured Creditors that the debts due on the date of winding up is required to be taken into consideration and not only the principal amount as considered by the Official Liquidator. Learned advocates have, therefore, submitted that no amount is required to be refunded by the secured creditors. On the contrary, secured creditors are entitled to further disbursement of the funds lying with the Official Liquidator. 14.Having heard learned advocates appearing for the respective parties and having considered their pleadings contained in the reports, affidavits and documents produced before the Court as well as having minutely examined the relevant statutory provisions and the case law on the subject, the Court is of the view that the prayer made by the Official Liquidator in the present report cannot be granted and at this stage, ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e secured creditors and further, the workmen would not be entitled to additional amount on the basis of the claim of the secured creditors having second charge be excluded. The Court, therefore, clearly held that the said decision should not help either the Official Liquidator or to the Textile Labour Association. 16.This very issue was dealt with by the Delhi High Court and after elaborate discussion, the Delhi High Court has taken the view that there is no question of excluding the secured creditors having second charge while working out the ratio between the secured creditors and the workmen. This Court is in respectful agreement with the view taken by the Delhi High Court as well as by this Court in its earlier decision. The Court, therefore, holds that the claim of the secured creditors having second charge is not required to be excluded while working out the ratio between the secured creditors and the workmen. The Court is also not accepting the submissions made on behalf of the Official Liquidator and Textile Labour Association that only the principal amount is required to be taken into consideration while determining the amount for the purpose of working out the ratio. T....