MEHTAB CHAND GOLCHA Vs. OFFICIAL LIQUIDATOR GOLCHA

JUDGEMENT

(1.) This is an application under Section 392 of the Companies Act, whereby some modifications are sought in the scheme which was approved by this court on December 15, 1975, in S. B, Company Petition No. 3 of 1971.

(2.) The company came under liquidation on May 10, 1968. Sarvashri Maharaj Kishan, New Delhi, and Suresh Chandra, New Delhi, made an application under Section 391 of the Companies Act read with Rule 67 of the Companies (Court) Rules, 1959, on or about March 24, 1971, which came to be registered as Company Petition No. 3 of 1971. These two petitioners sponsored a scheme for payment of the outstanding claims of the creditors of the company. During the period when this petition was pending before the court, a scheme was sponsored by the present applicant on October 11, 1974. On January 3, 1975, the court directed that a meeting be called on March 16, 1975, for consideration of the scheme. Shri M.M. Singhvi, advocate, was nominated to preside over the meeting. Shri Singhvi submitted his report on October 21, 1975. As per his report the meeting was attended by a requisite majority of creditors. The quorum was complete on the lines indicated in the order dated January 3, 1975. The meeting was attended also, among others, by the representatives of the I.T. Dept. In this meeting a scheme was unanimously adopted on March 16, 1975. When the matter came up for consideration before the court no objections were raised either on behalf of the creditors or on behalf of the official liquidator, except a few of a formal character. The court further ordered that the scheme as sanctioned would become operative from the date of the order of sanctioning, but in case an appeal was filed, it would become operative when the appeal was disposed of. Certain modifications were ordered by the court while finally sanctioning the scheme on December 15, 1975. It is not necessary to refer to those modifications as now the final order of the court dated December 15, 1975, is on record, and is available for ready reference. An appeal was, however, filed against the order of this court dated December 15, 1975. This appeal was registered as Appeal No. 4 of 1976. It has been contended on behalf of the petitioners that as a result of long and protracted negotiations, discussions and personal conferences held between the applicants on the one hand and the I.T. Dept. on the other, a compromise had been arrived at between them. This compromise was filed before the Division Bench on September 21, 1979. The Appeal No. 4 of 1976 came up for hearing on September 24, 1979. In view of this compromise, the appeal was not pressed, and the same was dismissed as withdrawn. It is in consequence of this withdrawal of appeal, that the scheme ordered by this court on December 15, 1975, has become operative. The company in liquidation has to pay income-tax dues and has also to make payment to the various creditors. The present compromise which has been arrived at between the applicants and the I.T. Dept. deals only with the problems of payment to the I.T. Dept. their dues. The creditors have already been paid 60% of their dues. 40% still remains to be paid. The applicants, I.T. Dept. and Shri Bhawani Shankar, purported to be the secretary of the creditor's association, moved a joint application for giving effect to the compromise which has been entered into between the petitioners and the I.T. Dept, Shri Bhawani Shankar, however, at a later stage, changed his stand and objected to the compromise which has been entered into between the petitioners and the I.T. Dept. His contention along with one or two other creditors who were present, is that the present compromise only settles the dispute regarding the payment of income-tax dues between the petitioners and the I.T. Dept., but has not cared for making payment of the dues to the creditors. Apart from this, the creditors have claimed interest from May 10, 1968, on their amounts.

(3.) The official liquidator, on the other hand, has opposed the modifications in the scheme dated December 15, 1975, sought by the petitioners and the I.T. Dept. in pursuance of the agreement entered into between them. The contention of the official liquidator is that after the sanction of the scheme dated December 15, 1975, this court has become functus officio, and cannot entertain any further application for modifications in the scheme already sanctioned. It was further contended by the official liquidator that the creditors are entitled to get interest at the rate of 12% on the amounts advanced by them. If interest were to be calculated at the rate of 12% it would come to about 90 lakhs of rupees. The official liquidator contends that a provision for this amount should be made before any modification in the scheme dated December 15, 1975, is made. It has been further contended on behalf of the official liquidator that he is to be paid the charges, costs and expenses before any modification is sanctioned. According to the official liquidator the interest which has accrued in favour of the creditors would also be included in the "term charges, costs and expenses". It was also contended by the official liquidator that, according to the terms of the agreement which have been entered into, a bank guarantee of Rs. 40 lakhs has been filed in favour of the Additional Registrar, Rajasthan High Court, Jaipur Bench, Jaipur. His contention is that the Additional Registrar should not be brought into the picture because it is the exclusive domain of the official liquidator to deal with the funds coming under the provisions of the Companies Act. The official liquidator has also contended that he has yet to decide certain claims of the I.T. Dept. which might be admitted to proof, and that advocates were engaged in various proceedings and their fees has to be paid. In substance, the contention of the official liquidator is that the proposed agreement entered into between the petitioner and the I.T. Dept. should stand over till the formalities are completed and till interest of the creditors at the rate of 12% is paid. In the alternative, it has been contended by the official liquidator that under Rule 179 of the Companies (Court) Rules, 1959, in the event of there being a surplus after payment in full of all the claims admitted to proof, creditors, whose proofs have been admitted shall be paid interest from the date of the winding-up order or of the resolution, as the case may be, up to the date of the declaration of the final dividend, at a rate not exceeding 4 per cent. per annum, on the admitted amount of the claim, after adjusting against the said amount the dividends declared as on the date of the declaration of each dividend. Even under Section 208(6) of the Companies Act the rate of interest shall, in no case, exceed four per cent. per annum or such other rate as the Central Govt. may, by notification in the official gazette, direct.