TaxTMI 
TaxTMI 
2023 (5) TMI 1085
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....ted 16th July, 2009, the company was ordered to be wound up and the Official Liquidator came to be appointed as the Liquidator of the company in liquidation. (b) The Official Liquidator, based on the inspection of the records maintained by the Registrar of Companies, claimed to have had correspondence with the secured creditors of the company, the Ex-directors of the company and meetings with the Ex-directors and secured creditors of the company in liquidation. Kotak Mahindra bank Ltd., ("the Bank"), the Noticee, informed the Official Liquidator under cover of the letter dated 16th February, 2009 that ICICI Bank Ltd., IDBI and State Bank of India, the secured creditors of the company in liquidation, had assigned their rights to the Noticee. The Official Liquidator claims despite repeated requests the Bank had not shared the Deeds of Assignments. (c) In the meanwhile, the Official Liquidator has adjudicated the claims of workers. The Official Liquidator claims a certified list of Proof of Debts of claims of workers as of 3rd October, 2017 aggregating to Rs. 86,89,421/-, has been filed. It is further asserted that the Official Liquidator was apprised of the proceedings before the....
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....s, a sum of Rs. 18,06,210/- by way of rent, which was deposited pursuant to the order of this Court in Suit No .4928 of 1993 and interest thereon, and Rs. 49,24,375/- towards reimbursement of expenses. Out of this a sum of Rs. 90,50,124/-, was received by Bank from the sale of the other properties of the company in liquidation on 29th April, 2008 and a sum of Rs. 18,06,210/-, was paid to Bank by the Tribunal-Receiver on 12th November, 2008. 8) In response to the additional affidavit, the Official Liquidator filed an additional affidavit-in-reply. It was contended that in the meeting held on 25th April, 2022 to compute the ratio of the secured creditors and the workmen as also the workmen's portion over the security sold by the Bank, the ratio of workmen's dues was arrived at 0.35%. The workmen's portion thus comes to Rs. 2,95,769.427/-. The liability of the Bank in the ratio of 85.87% comes to Rs. 2,53,977.20/- and the balance amount, in the ratio of 13.71%, is to be contributed by IFCI Ltd. 9) It was further contended that two sale certificates, dated 23rd March, 2009 and 19th May, 2009, were executed after the date of the appointment of the Provisional Liquidator. Since the ful....
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....e put in contest, urged Mr. Pimple. 13) Mr. Gupta, countered the submissions on behalf of the Official Liquidator. It was urged that all the assets of the company in liquidation were sold and proceeds realised prior to the date of the appointment of the Provisional Liquidator, except the sum of Rs. 18,06,210/- which was received on 12th November, 2008. Controverting the character of the said amount, as the asset of the company in liquidation, Mr. Gupta would urge that the said amount came to be deposited with the receiver appointed by this Court in Suit No .4928 of 1998, instituted by ICICI Ltd., the Assignor of the Bank. Therefore, the rent so received by Court Receiver can not be said to have retained the character of the property of the company in liquidation. 14) Mr. Gupta would further urge that the fact that sale certificate came to be issued subsequent to the date of the appointment of the Provisional Liquidator and the amount was actually transmitted later is of no significance. It is the date of the sale which is determinative and since all the assets of the company in liquidation were sold before the appointment of the Provisional Liquidator, the provisions contained in....
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....he provisions contained in Section 529 and 529A of the Act, 1956 were enunciated as under:- "..........16. Our conclusions on interpretation of the provisions of Sections 529 and 529A of the Companies Act, therefore, are as follows: 16.1 A secured creditor has only a charge over a particular property or asset of the company. The secured creditor has the option to either realize his security or relinquish his security. If the secured creditor relinquishes his security, like any other unsecured creditor, he is entitled to prove the debt due to him and receive dividends out of the assets of the company in the winding up proceedings. If the secured creditor opts to realize his security, he is entitled to realize his security in a proceeding other than the winding up proceeding but has to pay to the liquidator the costs of preservation of the security till he realizes the security. 16.2 Over the security of every secured creditor, a statutory charge has been created in the first limb of the proviso to clause (c) of sub- section (1) of Section 529 of the Companies Act in favour of the workmen in respect of their dues from the company and this charge is pari passu with that of the....
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....e extent of the workmen's portion. This would imply that the workmen become entitled to distribution of sale proceeds in the ratio as explained in the illustration appended to Section 529 (3) (c) of the Act, 1956. The moot question is as to at what point the workmen become entitled to distribution of sale proceeds ? 22) A three Judge Bench judgment of the Supreme Court in the case of Bank of Maharashtra Vs. Pandurang Keshav Gorwadkar and Others (2013) 7 SCC 754 wherein the legal position was expounded by the Supreme Court, illuminates the path. The propositions read as under:- ".........67. In light of the above discussion, we sum up our conclusions thus: 67.1. If the debtor company is not in liquidation nor any provisional liquidator has been appointed and merely winding up proceedings are pending, there is no question of distribution of sale proceeds among secured creditors in the manner prescribed in Section 19(19) of the 1993 Act. 67.2. Where a company is in liquidation, a statutory charge is created in favour of workmen in respect of their dues over the security of every secured creditor and this charge is pari passu with that of the secured creditor. Such statutory c....
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....ery certificate after securing an indemnity bond of restitution of the amount to the extent of workmen's dues as may be finally determined by the liquidator of the debtor company and payable to workmen in the proportion set out in the illustration appended to Section 529(3)(c) of the Companies Act. The other, DRT may set apart tentatively portion of the undisbursed amount towards workmen's dues in the ratio as per the illustration following Section 529(3)(c) and disburse the balance amount to the applicant bank or financial institution subject to an undertaking by such bank or financial institution to restitute the amount to the extent workmen's dues as may be finally determined by the liquidator, falls short of the amount which may be distributable to the workmen as per the above illustration. The amount so set apart may be disbursed to the liquidator towards workmen's dues on ad-hoc basis subject to adjustment on final determination of the workmen's dues by the liquidator.........." 23) The Supreme Court has ruled in clear and explicit terms that if the company goes into the liquidation, before the sale proceeds are fully and finally disbursed, Section 529A read with Section 52....