Whether Reporters of Local Papers may be allowed to see the judgment ?
To be referred to the Reporter or not ?
Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
Whether it is to be circulated to the civil judge ?
========================================================= KOTAK MAHINDRA BANK LTD - Applicant(s) Versus OFFICIAL LIQUIDATOR OF STANROSE STEEL LTD & 2 - Respondent(s) ========================================================= Appearance :
MR NAVIN K PAHWA for Applicant(s) : 1, MR JS YADAV for Respondent(s) : 1, MRS MAUNA M BHATT for Respondent(s) : 2, MRHARSHITSTOLIA for Respondent(s) : 3, ========================================================= CORAM :
HONOURABLE MR.JUSTICE K.A.PUJ Date : 28/04/2011 CAV JUDGMENT The applicant, Kotak Mahindra Bank Ltd., has filed this Misc. Civil Application praying for review and recalling of the order dated 5.10.2010 passed by this Court in Misc. Civil Application No.201 of 2010, in the interest of justice and equity. The applicant has also prayed for direction for appropriation of the sale proceeds towards the dues of the workmen, if any, and dues of the secured creditors.
This Court has issued notice on 22.10.2010. An order was passed by this Court on 5.10.2010 in Misc. Civil Application No.201 of 2010 directing the applicant of that application, namely, Eva Group of Company, to deposit the amount with the Official Liquidator and if he has already paid the amount to Kotak Mahindra Bank then the said Bank was directed to deposit the amount of sale consideration with the Official Liquidator, forthwith. Since the said order was not complied with, the Court passed further order on 22.10.2010 granting time to the applicant to issue Fixed Deposit Receipt in favour of the Official Liquidator for the amount realized on the sale of the assets of the Company in liquidation. On 3.12.2010, the Court passed further order recording the statement of the learned advocate appearing for the applicant Bank that the amount received by the applicant Bank from the auction purchaser towards the sale consideration would be invested in the fixed deposit receipt in the name of Official Liquidator. The further prayer for appropriation of the amount was opposed by the Official Liquidator and hence the matter was adjourned for further hearing.
Mr.N.K.Pahwa, learned advocate appearing for the applicant Bank submitted that the applicant was permitted to sell the properties of the Company in liquidation under the SARFEASI Act being part of sale committee consisting of the applicant, GIIC and the Official Liquidator, vide order dated 29.2.2008 passed in Company Application Nos.318 of 2007 and 100 of 2008. He has further submitted that the applicant Bank accordingly took certain steps for sale/auction of the properties of the Company in liquidation. In the interregnum period some proceedings were taken out by the persons claiming to be guarantors of the Company in liquidation. However, the said proceedings came to be disposed of against the guarantors. He has further submitted that the applicant issued advertisement inviting bid in the daily newspapers and the auction was scheduled to be held on 13.7.2010 on the terms as were decided by the sale committee. The applicant filed Company Application No.192 of 2010 for confirmation of sale in favour of Eva Group of Company. This Court vide order dated 13.8.2010, however, directed the applicant to make one more attempt for fetching higher price. Accordingly, advertisements were published in the local newspapers by the Official Liquidator and the auction was held before this Court on 27.8.2010. The bid of the original auctioneer - Eva Group Company was approved by this Court at Rs.10.85 crores by an order dated 27.8.2010.
From perusal of this order it becomes clear that the sale was confirmed in favour of Eva Group Pvt. Ltd., on the terms and conditions as contained in the tender document issued by the sale committee. Clause-vii of the tender document provides that the sale consideration is required to be deposited with the applicant. Mr.Pahwa further submitted that, even otherwise, as per the settled legal position, the applicant is entitled to retain the amount of sale proceeds subject to compliance with the provisions of Section 13(9) of the SARFEASI Act. He has further submitted that the Official Liquidator was directed to invite claims and submit his report before this Court. He has further submitted that the applicant is ready and willing to make appropriate provision considering the permissible claim once the report is filed by the Official Liquidator before this Court. He has further submitted that similar issue was considered by this Court in the case of Bank of India Vs. Official Liquidator of Phar East Laboratories Ltd., in Company Application No.177 of 2005. He has, therefore, submitted that in view of the terms and conditions as approved by this Court as also in view of the judgment rendered by this Court and relevant provisions of the SARFEASI Act, the applicant is entitled to retain amount of sale proceeds subject to making appropriate provisions as mentioned in the judgment and order dated 9.3.2006 rendered by this Court in Company Application No.177 of 2005. He has further submitted that the applicant could not point out all these facts and circumstances when the order dated 5.10.2010 was passed by this Court, as all earlier orders and proceedings were not before the Court. He has further submitted that, even prior to this, the applicant has filed Company Application No.294 of 2010 before this Court seeking appropriate orders for permitting/directing disbursement of the amount. The said application was withdrawn with a liberty to file fresh application after present application for recall is considered and disposed of by this Court. He has, therefore, submitted that the relief prayed for by the applicant for appropriation of the amount of sale proceeds be granted and the application be allowed accordingly.
On behalf of the Official Liquidator Mr.J.S.Yadav, learned advocate appeared. The Official Liquidator has filed his report on 20.10.2010 as well as 20.1.2011. Based on these two reports, Mr.Yadav has submitted that by an order dated 24.12.2002 passed by this Court in Company Petition No.18 of 1998, the Company was ordered to be wound up by this Court and the Official Liquidator attached to this Court has been appointed as the Liquidator of the Company under the provisions of the Companies Act, 1956. He has further submitted that this Court vide its order dated 12.7.2010 passed in Company Application No.168 of 2010, directed the Official Liquidator to invite the claims of the creditors, secured as well as statutory creditors and also the workers and to file appropriate report before this Court. Pursuant to the said order, an advertisement was published on 31.7.2010 in 'Times of India' English daily and 'Sandesh' Gujarati daily. Pursuant to the advertisement published on 31.7.2010 in these two newspapers, the Official Liquidator has not received any claim either from the workers or from any other creditors till 30.8.2010. However, he has received the following uninvited claims:-
Sr.
No.
Claim / letter received on Claim filed by Amount (In Rs.) 1 10.2.2003 M/s.
Mohta Electric & Engg. Co.
43,627/-
9.1.2006 Sales Tax, Mahuva, Bhavnagar 3,75,01,270/-
6.2.2003 Central Excise, Mahuva Thereafter vide letter dated 11.5.2007 they informed that the claim is withdrawn.
2,39,18,408/-
Gujarat Urja Vikas Nigam, Vadodara Filed Civil Suit No.177/1998 before Civil Judge, Mahuva by Gujarat Urja Vikas Nigam and the same is still pending.
2,71,78,800.23 Mr.Yadav further submitted that the applicant Bank and GIIC have not yet filed affidavit of proof of debts alongwith all supporting documents. He has, therefore, submitted that this Court should direct the applicant Bank as well as GIIC to file their respective affidavits of proof of debts alongwith supporting documents, such as charge certificate issued by the Registrar of Companies, Form Nos.8 and 13 filed by them in the office of the Registrar of Companies and statement of account of the said Company. He has further submitted that the Official Liquidator has not yet appointed Chartered Accountant for verification of the claims and, therefore, at this juncture effort of appropriation of the entire sale consideration by the applicant Bank would frustrate the winding up proceedings. He has also raised the following objections against the applicant's prayer for appropriation of the amount of the sale consideration.
(a) The applicant bank allegedly is an assignee bank and is not a secured creditor, much less proved secured creditor.
(b) The applicant bank is not a "Securitization Company" and also not "Asset Reconstruction Company".
(c) There is no charge registered in favour of Kotak Mahindra Bank as per Section 125 of the Companies Act, much less, any first charge in its favour.
(d) The assignment in question, cannot confer status of a "Securitization Company" in terms of provisions of SARFEASI Act.
He has, therefore, submitted that the application moved by the present applicant deserves to be rejected and the applicant Bank may be directed to hand over the amount of sale consideration to the Official Liquidator.
Having heard learned counsel appearing for the parties and having considered their rival submissions in light of the statutory provisions and decided case law on the subject, the Court is of the view that the scope of present application is very limited. Two fold prayers are made in this application. Firstly, order passed by this Court on 5.10.2010 in OJ MCA No.201 of 2010 is sought to be reviewed and recalled. This prayer was granted on the basis of consent given by the applicant Bank and the amount of sale consideration received by the Bank was ordered to be invested in the Fixed Deposit Receipt in the name of the Official Liquidator.
So far as the second prayer regarding appropriation of sale consideration is concerned, several contentions are raised by the learned counsel appearing for both the parties. Various decisions have been cited in support of their rival contentions. However, it is premature to decide this issue and grant the relief as prayed for at this stage. The Official Liquidator has raised very strong objections against grant of relief regarding appropriation of sale consideration. The claims are invited but same are still not verified by the Chartered Accountant. The applicant Bank has also not lodged its claim with the Official Liquidator. As contended before the Court, an affidavit of proof of debt alongwith supporting evidence is not filed with the Official Liquidator. The status of the applicant bank as secured creditor is still not beyond any dispute. An issue regarding assignment of debt is yet to be settled in view of the pendency of O.J. Appeals before the Division Bench of this Court, after the same were remanded by the Supreme Court.
In the above view of the matter, the question of appropriation of the amount of sale consideration is kept open at large till the above issues are settled by the competent Court or forum. Till then, the present arrangement would continue and the amount would remain in Fixed Deposits in the name of the Official Liquidator. In the interregnum period, it is open for the Official Liquidator to refer the claims to the Chartered Accountant for their verification.
If all claims are invited by the Official Liquidator, the same shall forthwith be referred to the Chartered Accountant for verification and the Official Liquidator will see to it that the report of the Chartered Accountant is received as expeditiously as possible, preferably within the period of three months from the date of referring the claim to the Chartered Accountant.
In view of the fact that the Court takes this view in the present application, it is not necessary to deal with all other issues raised and judgments cited before the Court.
With this direction and observation, this application is accordingly disposed of without any order as to costs.
(K.
A. PUJ, J.) kks Top