AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 617
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....harge holders, pending final adjudication of the claims of workmen and others. 2. Brief facts of the case are that vide orders dated 11.12.2006 in C.P. No. 108 of 2001, this Court was pleased to direct the winding up of the respondent company M/s. Allwyn Watches Limited and appointed the official liquidator as its provisional liquidator. Thereafter, the land and buildings situated at Patancheru, Medak District and Plant & Machinery situated at Penukonda, Ananthapur District, were put to sale as per the directions of this Court and an amount of Rs. 136,19,22,000/- was realized from the auction of the said assets. Thereafter, the official liquidator invited the claims of the creditors by publishing the same in the newspapers on 05.04.2011 and the last date of submission of claims was fixed as 04.05.2011. Some of the claims have been submitted by the creditors. However, since the official liquidator was not recognizing the creditors as the secured creditors of the company in liquidation, the secured creditors filed C.A. No. 955 of 2012. This Court vide orders dated 15.02.2013 held that the petitioners therein are the secured creditors of the company in liquidation and accordingly, ....
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....priate applications for permission for disbursement within one week thereafter. The official liquidator, thereafter, issued Form-71. 4. Aggrieved by the said orders dated 19.03.2014, the secured creditors filed OSA No. 19 of 2014 and vide orders dated 27.03.2014, this Court directed the official liquidator to disburse an amount of Rs.12,19,55,087.56 paise on pro-rata basis against each of the claims admitted and the official liquidator accordingly disbursed the said amount amongst the secured creditors in respect of the admitted claims. It is submitted that in spite of repeated directions of this Court to complete the adjudication of claims, the official liquidator had not been adjudicating the claims. It is submitted that sale proceeds will not cover even 25% of the claims of the secured creditors even after considering the sale proceeds from the last lot i.e., the plant and machinery of Patancheru unit of Allwyn Watches Limited (AWL) which were sold for an amount of Rs.5 Crores. It is submitted that the maximum amount that may be available for distribution before the first interim disbursement by the official liquidator was only around Rs.150 Crores (including the sale proceed....
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....efore the said Chartered Accountants/Auditor and cooperate with them. The official liquidator submitted the report of the Chartered Accountants/Auditor on 17.06.2025 and the applicant No. 1 has filed its objections to the Auditor's report on 17.02.2026. 6. The COMPA No. 1212 of 2014 was filed by LIC of India, one of the secured creditors, who was not paid any interim disbursement. The COMPA No. 73 of 2025 was filed by the official liquidator representing the company-in-liquidation (i) to take the application on record; (ii) to direct the respondents No. 1, 4, 5, 6, 8 and 11 to return the excess payment of Rs. 22,55,39,676/- together with interest @ 8% per annum from the date of order of second interim payment i.e., 27.03.2014 till the date of realization; (iii) to appoint M/s. T.Badarinath & Associates, Chartered Accountants or any other Chartered Accountant to give suggestion for disbursement of dividend to the eligible creditors including workmen of the company as ordered by this Court vide orders dated 09.01.2025 in C.A. Nos. 1212 of 2014 and 815 of 2017 and also to permit the official liquidator to pay an amount of Rs. 80,000/- + GST; (iv)....
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....total amount admitted was Rs. 3,24,02,70,064.49/-, whereas amount rejected was Rs. 9,15,77,08,089.67. The list of cases pending before this Hon'ble High Court i.e., 8 companies, to whom interim disbursement was made as per the orders of this Court is given as Annexure-II and the total amount paid to them was Rs. 71,38,56,609/- against the admitted secured debt of Rs. 2,68,96,92,750/-. The Annexure-III contains the list of workmen to whom payment was made of a sum of Rs. 5,40,44,219.96/-. The details of the charged assets/freehold assets are given in Annexure-IV and it is noticed that 16 creditors have paripassu first charge on movables/immovable assets. The Annexure-V is the table showing the proportionate share of secured creditors and workmen, who are having charge against the immovable assets based on admitted amount and the proportionate realized amount is Rs. 57,08,71,033/-. The Annexure-VI is the table showing the proportionate share of secured creditors and workmen, who are having charge against the movable assets based on admitted amount and the proportionate realized amount is Rs.10,03,055/-, as against the amount admitted as secured debt of Rs. 3,12,53,29,396/- @ 0.032094....
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....itlement on the charged property and 8 secured creditors have not received any amount on the charged properties till date. 10. The official liquidator on the basis of the report of the Chartered Accountants/Auditor is therefore claiming refund of the excess amount paid to the six creditors along with interest @ 8% thereon and by taking the said amount into consideration is proposing the payment of the third interim dividend. The official liquidator is also proposing to keep aside a sum of Rs. 19,89,51,259/-, to satisfy ten belated claims which are pending for adjudication due to non-submission of condonation delay orders from the Hon'ble High Court as well as non-submission of required information. 11. The learned counsel appearing for the SUUTI and also SBI have submitted that the proposal to keep a sum of Rs. 19,45,74,261/- in respect of secured creditors who not even filed applications for condonation of delay of this Court is not justified. It is submitted that by keeping aside, a sum equivalent to 100% of their claim, while secured creditors who approached this Court are granted only a proportion of their claims is unjust and unwarranted. It is submitted that if at all, ....
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....ere is no cause for refund of the said amount or the interest thereon. The parties have also filed their objections in writing. 15. Having gone through the material on record and having regard to the rival contentions, this Court finds that the official liquidator is in possession of certain funds and the same is to be disbursed amongst the secured creditors in equal proportion. Some of the creditors have charges against the movable and immovable properties and it is the claim of the official liquidator that six creditors have been paid in excess of their charge. The details of the debts and the value of the charged assets and their realization are not available before this Court. For coming to the conclusion about the excess of the amounts paid, a notice would have to be given by the official liquidator and the said excess amount would have to be determined after giving an opportunity of hearing to the concerned parties. It is noticed that no such notice has been given by the official liquidator so far and it is only at the stage of disbursement of the third interim dividend that the official liquidator has taken this stand. Therefore, this Court is of the opinion that the part....