GOVERNMENT OF KARNATAKA Vs. NGEF LTD.

JUDGEMENT

(1.) Perused C.A. No. 278 of 2016 and the memo dated July 11, 2016, filed by the State Government.

(2.) The workmen dues have been recalculated by the State at Rs. 22,46,71,526 with 8 per cent, simple interest payable from Dec. 20, 2002 (effective date of the scheme) to July 15, 2016, vide annexure A1 of the memo dated July 11, 2016. In the alternative, vide annexure A2, the amounts so calculated with 8 per cent, interest per annum from Dec. 20, 2002 to Aug. 3, 2004 (the date of winding up order) and interest at the rate of 4 per cent, from Aug. 4, 2004 to July 15, 2016, i.e., today, the said amount of workmen dues has been calculated at Rs. 17,31,51,308. The chart of these calculations have been produced with the said memo before this court.

(3.) Mr. K.G. Raghavan, learned senior counsel for the State has relied upon the decision of the Kerala High Court in the case of Official Liquidator Vs. Federal Bank Ltd., Aluva and others (AIR 1997 Kerala 352) and [1997] 88 Company Cases 178 (Kerala), in which, the learned single judge of the Kerala High Court dealing with almost similar circumstances, held that rule 179 of the Companies (Court) Rules, 1959, providing a rate of interest at 4 per cent, per annum is not a straight-jacket formula and depending upon the facts and circumstances of the case, the court has discretion to approve payment on higher rate of interest in such circumstance to the workmen at par with the one paid to the secured creditors. The Kerala High Court in the aforesaid case, found a via media to approve the payment of interest to the workmen at 6 per cent. The relevant portion of the judgment in the said case of the Kerala High Court is quoted below for ready reference.