The two creditors of the company (in liquidation), both claiming that they are secured creditors, have filed the captioned two applications. The Company Application No.535 of 2011 has been filed by the Bank of Baroda whereas the Company Application No.576 of 2011 is filed by the Peoples Cooperative Bank Limited, Dholka. As mentioned above, both claim to be the secured creditors of the company.
2. The applicant-Bank of Baroda has taken out Judge's Summons dated 16.11.2011 seeking below mentioned relief/direction:-
"(A) Your Lordship may be pleased to allow the present application and further be pleased to direct the Official Liquidator of M/s. Printpack Industries Ltd. (in Liquidation) to disburse the amount of sale proceeds realised by the Official Liquidator by disposing of the immovable properties of the Company being land, factory building situated at Plot No.512-513, G.I.D.C. Estate, Dholka, Ahmedabad which was confirmed by this Hon'ble Court alongwith accrued interest thereon as the applicant Bank of Baroda is the sole secured creditor for the aforesaid properties of the Company in Liquidation on such terms and conditions which the Hon'ble Court may deem fit for the reasons stated in the accompanying affidavit-in-reply of Judges' Summons and in the interest of justice and fairness of things;"
2.1 Whereas the applicant - Peoples Cooperative Bank Limited has taken out Judge's Summons dated 23.12.2011 seeking below mentioned relief/direction:-
"(A) Your Lordships may be pleased to allow the present application and further be pleased to direct the Official Liquidator of M/s. Printpack Industries Ltd. (In Liquidation) to disburse the part of amount of sale proceeds realized by the Official Liquidator by disposing of the immovable properties of the Company being land, factory, building situated at Plot No.512-513, GIDC Estate, Dholka, Ahmedabad which was confirmed by this Hon'ble Court along with accrued interest thereon as the applicant as share of applicant was worked out 11.09% as per report of Chartered Accountant and after adjusting adhoc disbursement made of Rs.14.50 Lacs each to applicant Bank and Bank of Baroda in view of order passed in company application No.316 of 2011 by this Hon'ble Court from the property of the company in Liquidation on such terms and conditions which the Hon'ble Court may deem fit for the reasons stated in the accompanying affidavit in support of Judges' Summons and in the interest of justice and fairness of things."
3. Bare reading of the relief/direction prayed for by the applicant banks reveal that both the applicants seek disbursement from the amounts lying with the OL which have been realised after auction sale of the properties and assets of the company in liquidation.
3.1 It is an admitted position on the part of both the applicants - banks and the OL that all assets and properties of the company have been sold and now any sale process is not required to be undertaken since any properties or assets of the company are not available or pending for disposal.
4. It is claimed by the OL in one of the reports that the final amount available with the OL for the purpose of disbursement is Rs.2,43,70,000/-. The applicant - banks have alleged that the said amount does not reflect the interest received on the said amount at the end of the financial year, i.e. 31.12.2011. After mentioning the details about the total fund received from the sale of assets, i.e. Rs. 2,43,70,000/-, the OL has mentioned details about the amount which the OL, in the facts of the case, would need to retain with him and the final figure available for disbursement are as follows:-
Fund Available in the Company's account.
Rs.
2,43,70,000/-
Outstanding Security Expenses has to be paid (as stated in para-16 of this report) Security Bill (February 2011 to January 2012 @ Rs.6750 per month) Rs.81,000/-
Expenses yet to be deducted (approximately) I.T.Dues Rs.1,00,00,000/-
Misc.
Expenses (Contingent) etc. Rs.89,000/-
Total Rs.1,01,70,000/-
(-) Rs.1,01,70,000/-
New amount available in the company's account Rs.1,42,00,000/-
4.1 Therefore, according to the OL, a sum of Rs.1,42,00,000/- is available for disbursement.
It is noticed from the aforesaid details that the OL wants to retain a sum of Rs.1,00,00,000/- towards contingency liability of Income Tax Department.
The said request is made in light of the communication received by the OL from the Chartered Accountant, i.e. the communication dated 16.1.2012 addressed by Kiran Shah & Associates, Chartered Accountant.
The OL has also requested that he may be allowed to retain a sum of Rs.81,000/- so as to make payment of security charges and a sum of Rs.89,000/- may be allowed to be retained so as to meet with the contingency expenses which may be necessary for concluding the dissolution/winding-up proceedings.
5. The secured creditors, i.e. both the applicants banks, have expressed their reservation with regard to the request retaining sum of Rs.81,000/- towards security charges and a sum of Rs.1,00,00,000/- towards contingency liability of Income Tax Department.
6. So far as the OL's request for retaining a sum of Rs.81,000/- for paying the security charges is concerned, it is necessary to note that as per the sale confirmation order, the successful bidder was to make the payment of the entire amount of sale consideration on or before October-2010 and the OL was also supposed to hand over the possession of the property in question to the successful bidder in or before October-2010, of course, after receipt of full amount from the successful bidder. The OL has admitted that the full sale consideration was received by the OL from the successful bidder in or before October-2010. It prima facie appears that thereafter, i.e. after October 2010 the OL had no reason or occasion or need or justification to continue to hold the possession of the property and incur further security charges. The OL ought to have handed over the possession on payment of sale consideration and as per the sale confirmation order and in any case, ought not to have incurred security expenses. However, when such security expenses are incurred, the OL would not be justified to adjust the same against the sale proceeds from the sale of the properties and assets of the company in liquidation. At this stage, any final view or decision with regard to the said request of the OL is not passed, particularly without hearing the successful bidder. However, it would not be in propriety to allow the OL to retain any amount to pay the security charges for the period after 1.10.2010 from the amounts received from the sale of the properties and assets of the company in liquidation.
6.1 It is also noticed from the record that workers of the company have raised their claim in a sum of Rs.1,37,436/- and the Provident Fund Department has claimed a sum of Rs.2,79,563/- towards the provident fund dues. Thus, a total claim from the side of workers and provident fund comes to about Rs.4,17,000. The applicant banks have jointly submitted that they have no objection if appropriate and necessary amount is retained or paid towards claim of workers and provident fund. Under the circumstances, below mentioned order/direction is passed:-
[A] The OL is allowed to retain a sum of Rs.4,50,000/- to discharge the dues of the workmen. From the said amount, the OL will, after following the procedure and after taking out appropriate separate report seeking permission of the Court, be permitted to disburse the amount claimed by the workers, after due verification of the identity, etc. Likewise, in such separate report after considering the details, the OL will be permitted to make payment of the claim by the Provident Fund Department in the sum of Rs.2,79,563/- out of the aforesaid amount of Rs.4,50,000/-. The balance amount may be retained to meet with any contingency demand/claim if such further claim is made/arises from the side of workers.
However, the OL shall have to take out separate report seeking permission to make payment.
[B] The OL is allowed to retain a further sum of Rs.1,20,000/- to meet with the contingency expenses towards advertisement, etc. which may have to be issued for the purpose of concluding the winding up proceeding. Besides this, the OL can retain a sum of Rs.6.23 lakhs towards adjudicated demand which shall not be paid over as the appeal is pending and the claim would prima facie qualify under Section 530 of the Act. Hence, a sum of Rs.12.00 lakhs can be retained by the OL.
In addition to the aforesaid amounts, i.e. Rs.12.00 lakhs, for the present, the OL is also allowed to retain a sum of Rs.50,00,000/- towards the contingency liability of Income Tax Department in respect of which, subsequently, further appropriate orders may be passed after hearing the learned counsel for the Income Tax Department and the counsel for the OL.
The balance amount may be disbursed amongst the two secured creditors. It is necessary to mention that the OL had invited Chartered Accountant's report. The details of Chartered Accountant's report dated 15.10.2010 are mentioned which are mentioned below :-
Name of Bank Total O/s. As on 15.07.2004 Secured Against.
Amount (Rs.) Percentage People's Co.Op.Bank Ltd.
66,51,528/-
11.09% Plant & Machinery.
Bank of Baroda 5,31,94,521/-
88.68% Stock, Book Debt. Factory Land & 2nd Charge on Plant & Machinery.
One worker claim U/s. 529A of the Companies Act, 1956 1,37,463/-
0.23% 100% Thus, the distribution ratio suggested by the Chartered Accountant i.e. 88.68 and 11.09 amongst the two secured creditors. Hence, the balance amount may be disbursed amongst the two secured creditors in the said ratio.
[C] The secured creditors shall file usual undertaking declaring, stipulating and assuring that in the event the OL demands refund or repayment of any amount out of the amounts disbursed to the secured creditor/s so as to discharge any liabilities, the same shall be immediately refunded/repaid by the secured creditor/s. The undertaking shall contain additional stipulation and declaration that in the event any demand from the Income Tax Department is made and any amount is required to be paid, in that event also, both the secured creditors, shall, in same proportion in which they received the amount, refund the amount to enable the OL to discharge the liabilities so that any liability towards interest may not accrue until the proceedings, if initiated are concluded.
With the aforesaid observation, clarification and direction, present applications stand disposed of.
(K.M.Thaker, J.) kdc Top