1.00. As common question of law and facts arise in these appeals and as such they are against the impugned common order passed by the learned Single Judge / learned Company Court in Nos.311 of 2009 and 422 of 2008, all these appeals are heard, decided and disposed of together by this common judgement and order. 2.00. O.J. Appeal Nos.8 and 9 of 2011 have been preferred by the common appellant – Union Bank of India claiming to be one of the secured creditors of the Company (in Liquidation) and O.J. Appeal No.51 of 2010 has been preferred by the appellant – IDBI Bank Limited, also one of the secured creditors of the Company (in Liquidation), challenging the impugned common order passed by the learned Company Court in Company Application Nos.311 of 2009 and 422 of 2008, by which the learned Company Court has passed an order directing the secured creditors to deposit total amount of Rs.73,02,800/- which have been paid to the secured creditors of the Company (in Liquidation) in excess.
3.00. Facts leading to these appeals, in nutshell, are as under:-
3.01. Pursuant to the order dtd. 12/11/2003 passed by the Company Court in Company Petition No.222 of 2001, M/s. Maheshwari Mills Ltd. has been taken into liquidation and the order of winding up has been passed and the Official Liquidator attached to this Court was appointed as Official Liquidator of the said Company with a direction to take charge of the assets of the said Company and accordingly, the Official Liquidator took the possession of the entire assets of the Company (in Liquidation).
3.02. It appears that thereafter order dtd.11/3/2004 was passed in OLR No.10 of 2004 appointing Sale Committee for disposal of the assets and properties of the Company (in Liquidation) under the Chairmanship of the Official Liquidator, secured creditors and workers’ union. It appears that by order dtd.28/2/2005 passed by this Court in OLR No.9 of 2005, sale of the assets of the properties of the Company situated at Ahmedabad, was confirmed in favour of one Sayona Land Corporation at the consideration of Rs.12.51 Lacs. It appears that the said purchaser deposited entire sale consideration and pursuant to the order passed by this Court / Company Court, he was handed over the possession of the said properties barring the area admeasuring 702 sq.mtrs. (for which there was dispute). Company Application No.204 of 2005 was submitted by the lead bank - IDBI Bank and Judges Summons was taken out by it for appropriate order directing the Official Liquidator of the Company (in Liquidation) to disburse and pay, with the permission of this Court, a sum of Rs.12.51 Crores realised from the sale of the assets of the properties of the Maheshwari Mills Ltd. in appropriate proportion between the secured creditors and workmen or the amount which is found due and payable after deducting the advertisement expenses and expenses towards Valuer’s bills. That in the said Company Application No.204 of 2005, OLR dtd.5/8/2005 was submitted wherein the Official Liquidator submitted that he has received workers claim from Textile Labour Association Ahmedabad and the same has been sent to the Chartered Accountant for verification and the report of the Chartered Accountant is still awaited. The Official Liquidator also stated that the claim received from the IFCI, Union of India, IDBI and ARCIL were being sent to the Chartered Accountant for verification. It appears that it was stated before the learned Single Judge that the secured creditors will themselves inter-se work out the ratio and their claims are not required to be sent to the Chartered Accountant and therefore, by order dtd.5/8/2005, the learned Single Judge passed an order that the claim of the secured creditors is not required to be referred to the Chartered Accountant to work out the inter se ratio.
3.03. At the time of hearing of the aforesaid Company Application, on 5/8/2005 it was prayed by the workers as well as secured creditors that as far as ad-hoc disbursement is concerned, the same should be made and Rs.10 crores should be disbursed dividing equally among the workers and secured creditors i.e. Rs.5 crores to secured creditors and Rs.5 crores to workers and the learned advocates appearing for the workers as well as secured creditors were also directed to place on record the exact working of the amount of disbursement for workers as well as secured creditors and the learned Single Judge passed order that after placing the said details, amount Rs.10 crores shall be disbursed by way of ad hoc disbursement and the matter was adjourned to 9/8/2005 and thereafter it was adjourned to 2/9/2005. That at the time of hearing of the aforesaid Company Application No.204 of 2005 on 2/9/2005, pursuant to the order dtd.5/8/2005 learned advocates for the IDBI, which is a lead secured creditor, placed on record the inter-se ratio amongst the secured creditors for disbursement of Rs.5 crores the learned advocates for the respective secured creditors accepted and agreed the said inter-se ratio, which was submitted before the Court. It was reported by the Official Liquidator that the report from the Chartered Accountant with respect to the claim of the workmen is awaited and therefore, the Official Liquidator was directed to get report from the Chartered Accountant and place it on record latest by 22/9/2005 with a copy to the workers’ union. It was also directed that after the report of the Chartered Accountant is received, the matter will be further considered for actual disbursement of the amount of Rs.5 crores. However, the Official Liquidator was directed to disburse the amount of Rs.5 crores to the secured creditors as per the ratio set out in the communication dated 20/8/2005, which was placed on record by the IDBI, as lead secured creditors and the learned Single Judge further passed an order that amount of Rs.5 crores would be given to IDBI, which is the lead secured creditor for distribution amongst all other secured creditors as per the communication dated 20/8/2005 which was placed on record and on usual undertaking by the each secured creditors to redeposit the amount, if any, found to have been paid in excess, as may be ordered by this Court and consequently and on filing usual undertaking by the secured creditors, amount of Rs.5 Crores was disbursed amongst them as per the ratio stated in the communication dtd.20/8/2005 on ad-hoc basis and amount of Rs.5 Crores which was towards the workmen dues was postponed till the claim of the workers are verified by the Chartered Accountant and the Official Liquidator.
3.04. It appears that thereafter Official Liquidator submitted report dtd.22/9/2005 inter-alia stating in para 2 of the said report that as per the report of the Chartered Accountant, amount of Rs.24,99,05,307/- will rank pari passu with the secured creditors. That along with the said report, report of the Chartered Accountant with respect to the verification of the claims of the respective workers was also placed on record. It is also required to be noted at this stage that even workers’ union also raised objection against the report of the Chartered Accountant in so far as excluding and/or not considering the Leave Salary of Rs.6,23,325/- excluding qualified rank of pari passu of the secured creditors with the workmen dues. It is also required to be noted that none of the secured creditors, inclusive of the IDBI, which is a lead secured creditor, raised any objection against the report of the Chartered Accountant considering the claims of the respective workers at Rs.24,99,05,307/-. It appears that thereafter with respect to the 13 workers whose claims were ordered to be reverified, actual claim of the concerned workers was considered at Rs.25,90,24,203/-. Considering the above, the learned Single Judge / Company Court by order dtd.28/9/2005 disposed of the said Company Application No.204 of 2005 by directing the Official Liquidator to distribute amount of Rs.5 Crores which was set apart as per the order dtd.2/9/2005 to the concerned workmen in proportion to their dues (considering the report of the Chartered Accountant). Thus, even in the year 2005 none of the secured creditors, inclusive of any of the appellants herein, raised any objection against the report of the Chartered Accountant with respect to verification of the claims of the workers at Rs.24,99,05,307/- and Rs.25,90,24,203/- for the purpose of distribution with pari passu with the claims of the respective secured creditors. Accordingly, amount of Rs.5 Crores came to be distributed amongst the concerned workmen on ad-hoc basis. It appears that thereafter workers’ union - TLA submitted Company Application No.422 of 2008 and took out the Judges Summons for appropriate order to direct the Official Liquidator to do fresh valuation of the remaining land owned by Maheshwari Mills Limited, admeasuring 702 sq.mtrs, which was left out and/or for which earlier no order was passed and also for appropriate order directing the Official Liquidator to work out final ratio between the secured creditors and the workers as that exercise was not undertaken by the Official Liquidator. Somewhat similar Judges Summons was also taken out by IFCI Ltd, being Company Application No.311 of 2009. Both the aforesaid applications were heard together by the learned Single Judge / learned Company Court. That in Company Application No.422 of 2008, Official Liquidator submitted report dtd.8/8/2008 submitting that in view of the order dtd.5/8/2005 passed by this Court in Company Application No.204 of 2005 dues of the secured creditors as on the date of the winding up order may be taken at Rs.14,09,75,000/- out of which an amount of Rs.5 Crores has already been paid to them. It was also submitted that in terms of the earlier order dtd.28/9/2005 passed in Company Application No.204 of 2005 Official Liquidator has disbursed an amount of Rs.5 Crores to 1198 workmen. It was also submitted that total claim of the workman as verified by the Chartered Accountant is Rs.24,99,05,307/-, which is considered pari passu while making payment to the secured creditors. It was also submitted that the Official Liquidator has accordingly worked out the ratio of distribution to be distributed to the secured creditors as well as workmen, and Rs.14,09,75,000/- for the claim of the secured creditors and Rs.24,99,05,307 for the claim of the workers and on that basis radio of distribution amongst the secured creditors and workers of the company worked out in the ratio of 36.06 : 63.94. Therefore, it was requested to approve final ratio of distribution amongst the secured creditors and workers of the Company in the ratio of 36.06 : 63.94. It is required to be noted that notice of Company Application No.422 of 2008 as well as Company Application No.311 of 2009 were served upon all the secured creditors, inclusive of the appellants herein and appellants of OJ Appeal Nos.8 and 9 of 2011 – Union Bank of India did not appear and did not challenge the aforesaid OL Report dtd.8/8/2008 and did not challenge claim of the workmen as verified by the Chartered Accountant at Rs.24,99,05,307/- And even proposed final ratio of distribution amongst secured creditors and workers of the Company in the ratio of 36.06 : 63.94. That Affidavit-in-Rejoinder was filed on behalf of the workers’ Union with respect to wages in lieu of unutilized privilege leave as wrongly rejected by the Chartered Accountant and to that even a further report was submitted by the Official Liquidator on 24/8/2009.
3.05. That a further report was also submitted by the Official Liquidator on 12/8/2009 stating that in terms of the order dtd.28/9/2005 passed in Company Application No.204 of 2005, Official Liquidator has disbursed Rs.5 Crores to 1198 workmen out of total claim of Rs.24,99,05,307/- as verified by the Chartered Accountant. It was also stated that in terms of the order dtd.24/7/2008 passed in OLR No.99 of 2008, Official Liquidator has disburse an amount of Rs.3,76,760/- to 13 workmen out of total claim of Rs.80,82,855 as verified by the Chartered Accountant. It was further stated that thereafter in terms of the order dtd.27/4/2009 passed in Company Application No.160 of 2009, Official Liquidator has disburse an amount of Rs.27,221 to one worker out of total claim of Rs.1,36,038/- as verified by the Chartered Accountant. It was stated that therefore, the total claim of the workmen as verified by the Chartered Accountant works out to Rs.25,19,24,303/- which is considered pari passu while making payment to the secured creditors. It is also required to be noted at this stage that even the said report was not even objected by any of the secured creditors, inclusive of the appellants herein. Under the circumstances and considering the reports submitted by the Official Liquidator dtd.8/8/2008, 12/8/2009 and 24/8/2009, the learned Single Judge / learned Company Court has passed order accepting the final ratio for distribution amongst secured creditor and workers of the Company in the ratio of 35.88 : 64.12 and it was found that while disturbing Rs.10 Crores, amount of Rs.4,26,97,200/- would be available to the secured creditors, whereas, amount of Rs.7,63,00,800/- would be available for workers and the workers are only paid Rs.5 Crores and balance as available at Rs.1.90 Crores would be required to be distributed to the workers only and an amount of Rs.73,02,800/- which is paid to the secured creditors in excess will be required to be called back from the secured creditors who were paid amount earlier upon the undertaking filed before this Court and therefore, and consequently the learned Single Judge has passed the impugned order directing the Official Liquidator to disburse balance amount of Rs.1.90 Crores amongst the workers on pro rata proportionate basis and has further directed that amount of Rs.73,02,800/- paid in excess, shall be redeposited by the concerned secured creditors with the Official Liquidator within a period of six weeks. It is reported that except IIBI, all the secured creditors have redeposited the excess amount paid to them pursuant to the earlier order passed by this Court in present appeals. It appears that thereafter being aggrieved by and dissatisfied with the impugned Judgement and Order dtd.7/9/2009 passed by the learned Single Judge / learned Company Court in Company Application Nos.422 of 2008 and 311 of 2009, Union of India – one of the secured creditor preferred OJ Appeal before the Division Bench and the Division Bench disposed of the said OJ Appeal by relegating the said appellant to prefer review applications and accordingly Union of India preferred two review applications being Misc.Civil Application Nos.4 and 5 of 2010 which came to be dismissed by the learned Single Judge and that thereafter the Union of India – one of the secured creditor has preferred these OJ Appeal Nos.8 and 9 of 2011 challenging the impugned judgement and order passed by the learned Company Court in Company Application Nos. 422 of 2008 and 311 of 2009 and IDBI bank, which is a lead secured creditor has also preferred OJ Appeal No.51 of 2010 challenging the impugned order passed by the learned Single Judge / learned Company Court in Company Application No.422 of 2008 by which the learned Single Judge / learned Company Court has directed the secured creditor to redeposit an amount of Rs.73,02,800/- which was paid in excess, considering the final ratio between the secured creditors and workmen in the ratio of 36.06 : 63.94, considering the claim of the workers at Rs.25,90,24,203/-.
4.00. Ms.Nalini Lodha, learned advocate has appeared on behalf of the Union Bank of India - appellant of OJ Appeal Nos.8 and 9 of 2011 and Mr.Bharat Jani, learned advocate has appeared on behalf of IDBI – lead secured creditor – appellant in OJ Appeal No.51 of 2010, Ms.Amee Yajnik, learned advocate has appeared on behalf of the Official Liquidator of Company (in Liquidation) and Mr.D.S. Vasavada, learned advocate has appeared on behalf of the workers’ union and Singhi & Company has appeared on behalf of one of the secured creditor – IDBI.
4.01. Ms.Nalini Lodha, learned advocate appearing on behalf of the Union of India, Mr.Bharat Jani, learned advocate has appeared on behalf of IDBI, and learned advocate appearing on behalf of the respective appellants have vehemently submitted that as such the learned Judge has materially erred in considering the claim as admissible by the Chartered Accountant of workmen at Rs.25,90,24,203/- and consequently considering the share of the workers at 64.12%. It is submitted that as such report of the Chartered Accountant considering the claim of the workers at Rs.25,90,24,203/- as admissible was not given to the secured creditors and therefore there was no opportunity to the appellants to dispute the report of the Chartered Accountant considering the workers claim admissible at Rs.25,90,24,203/-. It is further submitted by the learned advocate appearing on behalf of the appellants that even the learned Judge has not approved the final ratio between the secured creditors and the workers in the ratio of 35.88 : 64.12. It is submitted that as such even the prayer of the workers union in Company Application No.422 of 2008 was to direct the Official Liquidator to work out the final ratio between the secured creditors and workers and therefore, unless and until order is passed by the Company Court approving the final ratio between the secured creditors and the workers, the learned Judge ought not to have passed order directing the secured creditors to redeposit amount of Rs.73,02,800/- which was alleged to have been paid to the secured creditors of the Company (in Liquidation) in excess, which is based on considering the final ratio between the secured creditors and the workers in the ratio of 35.88 : 64.12 and that too considering Rs.25,90,24,203/- as admissible claim of the workers. Therefore, it is requested to allow the present appeals and to remand the matters to the learned Single Judge / learned Company Court to work out and/or approve the final ratio between the secured creditors and the workers, after giving an opportunity to the secured creditors to raise objections against the report of the Chartered Accountant, by which Rs.25,90,24,203/-. Is found to be admissible towards the workers claim.
4.02. It is further submitted by the learned advocates appearing on behalf of the secured creditors that the Official Liquidator may be directed to expedite disposing of and/or selling the remaining 702 sq.mtrs. of land and thereafter amount which is realised can be disburse amongst the secured creditors and the workers.
4.03. Mr.Singhi learned advocate appearing on behalf of the IIBI, which has gone in Liquidation now, has stated at the bar that the IIBI shall deposit excess amount, which is due and payable by them, pursuant to the impugned order passed by the learned Single Judge / Company Court with the Official Liquidator within a period of two weeks. The learned advocates appearing on behalf of the respective secured creditors have stated at the bar that pursuant to the interim order passed by this Court in these Letters Patent Appeals, all the secured creditors (except IIBI) have deposited the excess amount due and payable by them under the impugned order passed by the learned Single Judge / learned Company Court.
5.00. All these appeals are opposed by Ms.Amee Yajnik, learned advocate appearing on behalf of the Official Liquidator as well as Mr.Vasavada, learned advocate appearing on behalf of the workers’ union. It is submitted that as such the report submitted by the Chartered Accountant considering the claim of the workers at Rs.25,90,24,203/- as admissible has never been objected by any of the secured creditors. It is submitted that in Company Application No.204 of 2005 when the learned Single Judge / learned Company Court passed an order to disburse Rs.10 Crores on ad-hoc basis amongst secured creditors and the workers, more particularly Rs.5 Crores to the secured creditors and Rs.5 Crores to the workers, Official Liquidator submitted report/s and even in Company Application No.422 of 2008 also the Official Liquidator submitted report along with the report of the Chartered Accountant and even Official Liquidator submitted final ratio between the secured creditors and the workers in the ratio of 35.88 : 64.12. However, none of the secured creditors ever objected to report of the Chartered Accountant considering Rs.25,90,24,203/- as admissible towards workers claim. It is submitted that even Union Bank of India (appellants herein) though served nobody appeared on its behalf in any of the Company Applications, and therefore, it is not open for the Union Bank of India now to challenge the final ratio worked out by the Official Liquidator which came to be considered by the learned Single Judge / learned Company Court and on the basis of which the impugned order has been passed. It is submitted that even IDBI, which was lead secured creditor also did not challenge the report of the Chartered Accountant considering Rs.25,90,24,203/- as admissible towards workers claim. It is submitted that therefore, it is now not open for the appellants and/or any of the secured creditors to challenge the report of the Chartered Accountant which was earlier never challenged and thereby accepted by the concerned creditors which came to be relied upon by the learned Single Judge. It is submitted that only when pursuant to the impugned order, the concerned secured creditors are required to return the excess amount considering the ratio between the secured creditors and workers in the ratio of 36.06 : 63.94, for the first time in these appeals, they have raised such an dispute, which is not permissible. Ms.Amee Yajnik, learned advocate appearing on behalf of the Official Liquidator has further submitted that at every time Official Liquidator submitted report along with the report of the Chartered Accountant and considering the report of the Chartered Accountant which was never objected by any of the secured creditors, Official Liquidator submitted report submitting final ratio worked out between the secured creditors and Official Liquidator which was not objected by any of the secured creditors and therefore, the learned Single Judge has passed the impugned order, which is not required to be interfered with by this Court.
By making above submissions it is requested to dismiss these appeals.
6.00. Heard the learned advocates appearing on behalf of the respective parties at length.
7.00. At the outset, it is required to be noted that for the first time before this Court in these appeals only two secured creditors, more pare particularly Union Bank of India and IDBI have tried to oppose / challenge the report of the Chartered Accountant considering Rs.25,90,24,203/- as admissible towards workers claim. It is also required to be noted that so far as the Union Bank of India – appellant of OJ Appeal Nos.8 and 9 of 2011, they never appeared before the learned Single Judge / learned Company Court in any of the proceedings though served and never raised any objection and there by never objected the report of the Chartered Accountant or Official Liquidator considering Rs.25,90,24,203/- as admissible towards workers claim. From the chronological events stated hereinabove it appears that the Official Liquidator in its report dtd.2/2/2005 submitted in Company Application No.204 of 2005 stated that as per the report of the Chartered Accountant amount of Rs.24,99,05,307/- will rank pari passu with the secured creditors. Along with the said report, report of the Chartered Accountant with respect to the verification of the claims of the respective workers was also placed on record. It is to be noted that only workers’ union raised objection against the report of the Chartered Accountant in so far as excluding and/or not considering the Leave Salary of Rs.6,23,325/-. However, none of the secured creditors, inclusive of the IDBI, which is a lead secured creditor, raised any objection against the report of the Chartered Accountant considering the claims of the respective workers at Rs.24,99,05,307/- as admissible. It appears that thereafter with respect to the 13 workers whose claims were ordered to be reverified, actual claim of the concerned workers is considered at Rs.25,90,24,203/-, which has never been objected by any of the secured creditors, inclusive of the appellants herein. As stated above, considering the report dtd.22/9/2005, the learned Single Judge / Company Court by order dtd.28/9/2005 disposed of the said Company Application No.204 of 2005 by directing the Official Liquidator to disburse amount of Rs.5 Crores which was on ad-hoc basis which was set apart as per the earlier order dtd.2/9/2005 to the concerned workmen in proportion to their dues (considering the report of the Chartered Accountant). The said order dtd.28/9/2005 passed in Company Application No.205 of 2005 has attained finality. It is required to be noted that in the said applications, secured creditors (IDBI) submitted final ratio worked out amongst the secured creditors and it was, therefore, submitted that the claims of the concerned secured creditors are not required to be sent to the Chartered Accountant for working out inter-se ratio amongst the secured creditors. That thereafter workers’ union submitted Company Application No.422 of 2008 for appropriate orders directing the Official Liquidator to sell remaining 702 sq.mtrs. of land and directing the Official Liquidator to work out final ratio amongst the secured creditors and workers, so that further amount can be paid to the workers as well as secured creditors. One of the secured creditor (IFCI) also submitted Company Application No.311 of 2009 for appropriate order to disburse the remaining amount available with the Official Liquidator amongst the secured creditors and workers. It appears from the record of the Company Application Nos.422 of 2008 and 311 of 2009 that in the said applications, Official Liquidator also submitted reports dtd.8/8/2008 and 24/8/2009 submitting that the claim of the workers as verified by the Chartered Accountant is Rs. Rs.24,99,05,307/- and the claim of the secured creditors is Rs.14,09,75,000/- and consequently final ratio worked out amongst the secured creditors and workers of the Company is in the ratio of 35.88 : 64.12. None of the secured creditors inclusive of the appellants herein submitted any objection to the said reports and/or did not oppose the said reports and therefore, considering the final ratio of distribution amongst the secured creditors and the workers of the Company in the ratio of 35.88 : 64.12, the learned Single Judge has passed order observing that Rs.73,02,800/- is paid in excess to the secured creditors and therefore, considering the earlier undertakings filed by the respective secured creditors, which were given by the respective secured creditors, when they were paid Rs.5 Crores on ad-hoc, when the learned Single Judge / learned Company Court has passed the impugned order directing the secured creditors to return the excess amount of Rs.73,02,800/- which have been paid to the secured creditors of the Company (in Liquidation) in excess, it cannot be said that the learned Single Judge / learned Company Court has committed any error and/or illegality. Considering Rs.25,90,24,203/- as admissible towards workers claim and Rs.14,09,75,000/- towards the secured creditors, and arriving at the final ratio for the distribution amongst the secured creditors and the workers in the ratio of 35.88 : 64.12 (which was never objected by any of the secured creditors right from 2005), when the impugned order has been passed by the learned Single Judge / learned Company Court, the same is not required to be interfered with. As stated above, when earlier at no point of time any of the secured creditors challenged the report of the Chartered Accountant considering Rs.25,90,24,203/- as admissible towards workers claim and even Union Bank of India- appellants in OJ Appeal Nos.8 and 9 of 2009 never appeared before the Company Court in any of the proceedings though served, it is not open for the appellants now to challenge the final ratio worked out between the secured creditors and workers considering Rs.25,90,24,203/- as admissible towards workers claim and Rs.14,09,75,000/- towards the secured creditors It appears that only when pursuant to the impugned order has been passed by the learned Single Judge / learned Company Court, when the secured creditors are directed to return the amount of Rs.73,02,800/- which is found to be paid to them in excess, the respective appellants (some of the secured creditors) have raised objection for the first time in these appeals, which is not permissible. It is required to be noted that on the basis of the report of the Chartered Accountant which was never objected by any of the secured creditors, the amounts have been disbursed amongst the workers on pro rata and pari passu with the secured creditors. Under the circumstances, as such there is no merits and there is no substance in these appeals and the same deserve to be dismissed.
8.00. In view of the above and for the reasons stated above, these appeals fail and they deserve to be dismissed and are accordingly dismissed. IIBI to comply with the impugned order passed by the learned Single Judge / learned Company Court and deposit the excess amount due and payable by it with the Official Liquidator within a period of two weeks from today.
So far as the request of the learned advocates appearing on behalf of the respective parties to direct the Official Liquidator to sell 702 sq.mtrs. of remaining parcel of land is concerned, the Official Liquidator is hereby directed to expedite the process of selling the said parcel of land, after following due process as required and all best efforts should be made to see that maximum amount is fetched / realised, after obtaining appropriate orders from the learned Company Court.
With these all these appeals are dismissed. In the facts and circumstances of the case, there shall be no order as to costs.
Sd/-
(M.R.SHAH, J.) rafik Sd/-
(S.H.VORA, J.)