SYNDICATE BANK Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THESE applications arise from the order of winding up of Wester Works Engineers Limited. As the applicants have prayed for similar reliefs and as the same questions of law arise in the matter, they are being disposed of by this common order.

(2.) THE applicants in Company application No. 116 of 1998 have prayed that the respondent No. 1 be ordered and directed to pay to the applicants a sum of Rs. 19, 48, 552/- together with interest thereon at the rate of 19. 13% per annum from 27th November, 1997 till payment and/or realisation. The expenses were incurred by the applicants towards sale of securities given by Company in liquidation pursuant to the order passed by Board of Industrial and Financial Reconstruction. A further direction which is sought is, that a sum of Rs. 7,76,75,000/- being approximately 75% of the amount due and payable by the Company in liquidation to the applicants be paid to them. Similarly, in Company Application No. 117 of 1998 the Applicants have prayed that the 1st respondent be ordered and directed to pay a sum of Rs. 6,65,00,000/- being approximately 75% of the amount due and payable by the Company in liquidation to the applicants.

(3.) ON behalf of the Official Liquidator it is pointed out that the sum of Rs. 22,24,38,315/- excluding an amount of Rs. 50,57,080/- towards T. D. S. has been deposited with the Official Liquidator on 3rd November, 1997. An affidavit in reply has been filed by Shri Ujjwal Roy, Official Liquidator to meet the contentions as raised in the application. It is therein set out that an amount of Rs. 22,24,00,000/- has been invested in Fixed Deposits with various banks, out of the sum of Rs. 22,24,38,318/- alongwith interest to his credit as on 10th December, 1998. It is thereafter set out that the claims received by his office are Rs. 73,33,10,668. 34 Ps. which includes claims by workers and employees amounting to Rs. 41,89,68,067. 38. The claims of Syndicate Bank and Oriental Bank of Commerce works out to Rs. 21 lakhs and odd. There is also a claim in an amount of Rs. 6,13,50,193/- being claim of Income Tax Department and Rs. 58,93,163/- being the claim of Sales Tax Department. The claims of the Income Tax were received pursuant to letter dated 18th November, 1996 of the Dy. Commissioner of Income Tax and of the Sales Tax on receipt of copy of the Form No. 66 dated 13th December, 1996. The applicant Banks were secured creditors in respect of the property situated at Bhandup from which an amount of Rs. 14. 5 crores were realised as sale proceeds. The applicants are not secured creditors in respect of other properties which have been sold. The Official Liquidator out of the said sum of Rs. 14. 5 crores has to set aside the sum of Rs. 6,13,50,193/- towards Income Tax dues and a sum of Rs. 12,12,901/- towards Sales Tax dues. After deducting these amounts it is claimed only an amount of Rs. 8,24,36,906/- will be available subject to other deductions. On behalf of the applicant it is contented that they are secured creditors in respect of the proceeds arising from sale of Bhandup property and as such the amount which the Official Liquidator purports to pay towards Income Tax and Sales Tax demand cannot have preference over the claims of secured creditors.