Gujarat Industrial Investment Corporation Ltd v. State Of Gujarat
2009-01-15
JAYANT PATEL
body2009
DigiLaw.ai
JUDGMENT : Jayant Patel, J. The short facts of the case appear to be that the petitioner is a financial institution governed by the provisions of State Financial Corporations Act (hereinafter referred to as the 'Act'. The respondent No. 6 had taken loan from the petitioner as well as from the other financial institutions, who are respondents No. 3, 4, and 5. As per the petitioner, respondent No. 6 made default in paying the loan amount to the petitioner as well as to the other financial institutions. Simultaneously there were also arrears of taxes of the State Government of luxury tax, etc. Since statutory taxes were recoverable by procedure as provided under the Bombay Land Revenue Code (hereinafter referred to as the 'Code'), the City Deputy Collector issued a notification dated 30th September, 2002 inviting offers from the public at large for disposal of the properties of respondent No. 6. In the very notification some details were mentioned for the claim of the petitioner as well as one Charotar Nagrik Sahkari Bank having charges over the properties. At that stage, the petitioner has approached this Court contending, inter alia, that as the petitioner has statutory power to recover its dues by invoking the provisions of Section 29 of the State Financial Corporations Act (hereinafter referred to as 'SFC Act'), the impugned notification issued by the City Dy. Collector for disposal of the properties be quashed. In the present petition, the challenge is also made by the petitioner for the legality and validity of the impugned action as well as of the powers with respondent No. 2 to recover the dues as per Code prior to the recovery of the amount by the petitioner under Section 29 of SFC Act. 2. It appears that this Court at the initial stage on 29.11.2002 had passed the interim order directing the authority not to finalise the offer. Thereafter, it appears that the auction proceedings were conducted before the learned Single Judge of this Court and thereafter before the Letters Patent Bench of this Court and ultimately, the offer was accepted of Rs. 15.10 crore and the amount of sale consideration is deposited with this Court.
Thereafter, it appears that the auction proceedings were conducted before the learned Single Judge of this Court and thereafter before the Letters Patent Bench of this Court and ultimately, the offer was accepted of Rs. 15.10 crore and the amount of sale consideration is deposited with this Court. There are further additional development in the present proceedings inasmuch as Civil Application No. 3363 of 2007 is filed in the present petition by respondent No. 3 herein for interim order to direct Financial Institutions to strictly abide by One-Time Settlement (OTS) by way of full and final settlement of their claims for sum of Rs. 91.40 lac for IFCI, Rs. 38.63 lac for IDBI, Rs. 65.77 lac for Assets Reconstruction Company (India) Limited (now Usha Merit Finance Limited) and Rs. 32.29 lac for GIIC. It is also prayed in the said Civil Application that respondents No. 2 and 3 be directed to recalculate the luxury tax due and the interest be charged at simple rate not exceeding 7.5% by waiving the other interest, if any, and the penalty wholly. In the very application, it is prayed to direct the Liquidator of Charotar Nagrik Sahkari Bank Limited (Opponent No. 7 herein), to accept the amount due and payable as per Reserve Bank of India Guidelines for OTS. The last prayer made in the application is to direct the Registry of this Court to hand over the balance amount from Rs. 15.10 crore after full and final settlement of the aforesaid dues, for the employees of the applicant Company and the dues of various unsecured creditors of the applicant therein-respondent No. 6 Company herein. 3. The Civil Application No. 8997 of 2007 is preferred by the petitioner herein for an interim direction to distribute the amount of sale proceeds together with interest amongst the applicants and other secured creditors considering the outstanding dues, as may be finalised by this Court. It is also prayed in the said application that the Collector be directed to determine the ratio of the amount to be distributed amongst the secured creditors. 4. The Civil Application No. 1733 of 2007 has been preferred by the Assistant Provident Fund Commissioner for interim direction to permit the applicant to be impleaded as party respondent in the main Special Civil Application. 5.
4. The Civil Application No. 1733 of 2007 has been preferred by the Assistant Provident Fund Commissioner for interim direction to permit the applicant to be impleaded as party respondent in the main Special Civil Application. 5. The Civil Application No. 11592 of 2008 is preferred by certain employees of respondent No. 6 Company to direct the District Collector/Chairman of the Sale Committee to distribute the amount amongst the workers/employees and the secured creditors, out of the sale proceeds. 6. Heard Mr.R.D.Dave, learned Counsel for the petitioner, Mr.Vinay Pandy, learned AGP for the State, Mr.Baiju Bhagat, learned Counsel for IDBI and IFCI, Mr.Dharmesh Shah, learned Counsel for OL of Charotar Nagrik Sahkari Bank Ltd., Mr.Shalin N. Mehta, learned Counsel for Empire Hotels and Resorts Ltd., and Mr.Prabhakar Upadhyaya, learned Counsel for the workers. 7. Three aspects broadly deserve to be considered in the present controversy, which can be stated as under:- (a) Scope and ambit of the rights of the petitioner under Section 29 of the SFC Act viz-a-viz the rights of the Revenue Authority to recover the arrears of tax. (b) The claim of respondent No. 6, if any, for directions to the Financial Institutions as well as to the State Authorities for acceptance of the amount as full and final settlement. (c) Entitlement of the distribution to the respective parties from the funds available with this Court. 8. Section 29 of the SFC Act reads as under:- "29. Rights of Financial Corporation in case of default.- (1) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof [or in meeting its obligations in relation to any guarantee given by the Corporation] or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the [right to take over the management or possession or both of the industrial concern], as the [right to transfer by way of lease or sale] and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation. (2) Any transfer of property made by the Financial Corporation, in exercise of its powers under sub-section (1), shall vest in the transferee all rights in or to the property transferred [as if the transfer] had been made by the owner of the property.
(2) Any transfer of property made by the Financial Corporation, in exercise of its powers under sub-section (1), shall vest in the transferee all rights in or to the property transferred [as if the transfer] had been made by the owner of the property. (3) The Financial Corporation shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods. (4) [Where any action has been taken against an industrial concern] under the provisions of sub-section (1), all costs, [charges and expenses which in the opinion of the Financial Corporation have been properly incurred] by it [as incidental thereto] shall be recoverable from the industrial concern and the money which is received by it shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto.] (5) [Where the Financial Corporation has taken any action against an industrial concern] under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of [the concern]." 9. The aforesaid provision shows that if there is failure on the part of the industrial concern to comply with the terms of the agreement with the Corporation, the financial corporation shall have the right to take over the management or possession or both of the industrial concern and it will also have the right of transfer on lease or sale of such industrial concern to realise the property mortgaged or hypothecated or assigned to the financial corporation. Sub-section (2) provides by deeming fiction that if transfer is made by the financial corporation, the property would vest to the transferee as if transferred by the owner of the property.
Sub-section (2) provides by deeming fiction that if transfer is made by the financial corporation, the property would vest to the transferee as if transferred by the owner of the property. Therefore, the statute has authorised the financial corporation to take over the management and the possession of the industrial concern and also to sell the property for realisation of the outstanding dues and by statutory fiction the transferee would acquire rights in the property, if sold by the financial corporation as if the transfer is effected by the owner of the property. The scheme of SFC Act if considered as a whole, it appears from Section 29 of SFC Act, that not only the financial corporation is clothed with the power of realisation of its dues as mortgagee, but is further conferred with extraordinary power as per Section 29 than that of the mortgagee under Transfer of Properties Act. In the present case the power under Section 29 of the Act has not been exercised for taking over the management and the possession of the property, but before such power could be exercised, respondent No. 2 being the revenue authority under the Code has issued notification for sale of property to recover outstanding taxes of the Government and at that stage, the financial corporation has approached this Court by the present petition. 10. It can hardly be disputed that the status of the financial corporation is not as that of the mortgagee of the property even if the power under Section 29 of the SFC Act is not considered for examining the claim of the petitioner Corporation. Therefore, the amount to be recovered by the petitioner from the respondent No. 6 Company shall be as that of the secured creditor coupled with the additional power under Section 29 of the SFC Act. Whereas, the taxes to be recovered by the Revenue Authority would fall in the category of Government dues. Respondent No. 6 is a company governed by the provisions of Companies Act, (hereinafter referred to as the 'Cos. Act'). Had it been the case of deciding the priority upon the winding up of the company as per the provisions of the Cos Act., the secured creditors and the workmen's dues would stand above all the taxes or the Government dues towards outstanding taxes etc..
Act'). Had it been the case of deciding the priority upon the winding up of the company as per the provisions of the Cos Act., the secured creditors and the workmen's dues would stand above all the taxes or the Government dues towards outstanding taxes etc.. Since, in the present petition, no dues other than that of secured creditors and the workmen's dues are to be considered and the challenge by the petitioner is the exercise of the power by the State Financial Corporation under the SFC Act viz-a-viz power of the Revenue Authority for recovering the outstanding dues, the other priorities may not have any relevance and, therefore, it may not be required for this Court to consider the same at this stage. Therefore, as per the provisions of Cos Act, the secured creditors will have priority, inter se, claim over the Government dues. Of course, such priority is to be considered as per the provisions of the Cos Act at the time of distribution of the assets of the company, which is ordered to be wound up. However, even if it is an on-going concern if the rights of secured creditors for realisation of the security comes in conflict with the Government dues, as per the provisions of the Transfer of Properties Act also the rights of the secured creditors would stand above the rights of Revenue Authority for recovering taxes. It may also be recorded that in case of the on-going concern the rights may be slightly different inasmuch as if the secured creditor has not realised its secured interest as per the provisions of the Transfer of Properties Act and prior thereto the recovery proceedings are already undertaken towards outstanding taxes under the Code and the property is attached, the revenue authority may be in a position to proceed for realisation of the assets until it is objected by the secured creditors for invoking their rights for recovering their dues. 11. In the present case, as such on account of the present litigation when the matter was preferred it was at the stage where the revenue authority was to exercise the power under Code for recovering of the outstanding taxes and the secured creditor objected to such exercise of the power claiming the priority of rights coupled with the statutory power under Section 29 of SFC Act.
However, pending the petition pursuant to the interim order passed by this Court, the sale was not finalized. Not only that, but thereafter the auction proceedings were conducted before this Court of the property of the respondent No. 6 Company and this Court ultimately has confirmed the offer for sale of the property of Rs. 15.10 crore. The amount, at the initial stage, was deposited with the revenue authority, but thereafter it has been deposited with this Court and then subsequently invested under the orders of this Court. Under these circumstances, while holding the priority of the claim of the petitioner in the assets of respondent No. 6 Company over the outstanding Government taxes for the recovery thereto, next aspects to be considered would be the distribution of the amount lying with this Court in the present proceedings. 12. Had it been a case where the auction did not take place at all before this Court and was only the question of deciding the priority in claim between the petitioner and the revenue authority, it might stand on a different consideration. However, the additional circumstance in the present case is that the sale has taken place pursuant to the auction conducted before this Court and this Court has ultimately approved the offer for sale of the property at Rs. 15.10 crore. If any circumstance has arisen on account of the interim orders passed in the present proceedings, the petition may not end by deciding the priority of the claims or priorities for exercise of power, but it would also be required to be considered for giving effect thereto, at the time when the petition is to be concluded by distributing the money lying with this Court on the basis of, inter se, claim of the respective parties to the extent legally permissible. 13. Mr.Mehta, learned Counsel appearing for the respondent No. 6 company contended that it is not a case in which the company is ordered to be wound up and this Court is to exercise the power as that of Company Court for distribution of money. It was submitted that until there is a conclusive proof for entitlement of a particular amount by a particular creditor, this Court may not pass order for distributing such money to the said creditor.
It was submitted that until there is a conclusive proof for entitlement of a particular amount by a particular creditor, this Court may not pass order for distributing such money to the said creditor. It was submitted that even as against the alleged outstanding amount claimed by the petitioner, respondent No. 6 company is yet to respond by raising the contention that the amount recoverable is not as per the demand by the petitioner Corporation. He also submitted that there is no proper adjudication for the taxation liability, which is sought to be recovered by the revenue authority and even if there is adjudication such is subject to the proceedings of appeal or revision before the higher authority. He also submitted that the other secured creditors, who are also parties to the proceedings, have also filed respective proceedings for recovery of the amount before the Debts Recovery Tribunal, wherein respondent No. 6 company has resisted the claim. He submitted that until there is adjudication or recovery certificate in favour of such secured creditors, this Court may not pass the order for making any payment from the amount lying with this Court to such secured creditors. So far as respondent No. 7 Charotar Nagarik Sahkari Bank Ltd., is concerned, he admitted that there is an award in favour of the Bank, however, the appeal is preferred by the respondent No. 6 Company before the Cooperative Tribunal and the appeal is pending, but he fairly conceded that no interim injunction has been granted in such proceedings of the appeal. It was, therefore, submitted that the amount may be retained by this Court until the proceedings are finally adjudicated at the appropriate stage and the award or the decree becomes final by the higher forum. It was submitted that till then no payment should be made to any parties to the proceedings. 14. It was alternatively submitted that the respective claimants/creditors had agreed for settling their respective dues as full and final settlement and, therefore, if such amount is taken into consideration as stated in the Civil Application No. 3363 of 2007, the petitioner may be required to pay the amount only to that extent and the balance amount deserves to be returned to the petitioner by this Court.
He submitted that as prayed in the civil application No. 3363 of 2007, if this Court is to direct the concerned respondents and the petitioner to accept the amount as full and final settlement of outstanding dues to respondent No. 6 company, he has no objection for distribution of the amount to that extent, but under such circumstance, it was prayed that the remaining balance be paid to respondent No. 6 company for meeting with the other liabilities of the respondent No. 6 company, including the unsecured creditors, etc. 15. If the contention of respondent No. 6 company is closely examined in light of the record of the civil application No. 3363 of 2007, it appears that as per the respondent No. 6 company following institutions had agreed for acceptance of the following amount as full and final settlement:- Sr. Particulars Amount (in lac) (i) I.F.C.I Rs. 91.40 (ii) I.D.B.I Rs.138.63 (iii) Assets Reconstruction Company (now Usha Martin) Respondent No. 5 Rs. 65.77 (iv) G.I.I.C ((Petitioner) Rs. 32.29 (v) Charotar Nagarik Coop. Bank Limited Respondent No. 7 Rs.376.73 To all Secured Creditors Rs.704.82 Government Taxes: Luxury Tax - Rs. 45.00 State Dues - Rs. 60.00 Total Rs. 809.82 16. The aforesaid details are apparent from the communication of respondent No. 6 company dated 8.12.2005, copy whereof is produced by respondent No. 6 company-applicant of Civil Application No. 3363 of 2007 in support of the prayer made in the application. It further appears from the letter dated 8.12.2005 produced in the record of civil application on page 82 of respondent No. 6 company. While submitting the proposal for OTS it was suggested by respondent No. 6 company that the valuation of the property of respondent No. 6 company is Rs. 7.50 crore and the buyer is available for purchasing of the property at Rs. 7.50 crore and the amount can be paid accordingly from the disposal of the property. The correspondence further shows that as per the petitioner the buyer is available for purchasing of the property for Rs. 7.50 crore, and as against the property to fetch Rs. 7.50 crore, respondent No. 6 company had agreed to pay the amount as full and final settlement towards Rs. 8.10 crore as per the details referred to hereinabove. The aforesaid further shows that respondent No. 6 had to pay Rs. 60 lac from its own fund.
7.50 crore, and as against the property to fetch Rs. 7.50 crore, respondent No. 6 company had agreed to pay the amount as full and final settlement towards Rs. 8.10 crore as per the details referred to hereinabove. The aforesaid further shows that respondent No. 6 had to pay Rs. 60 lac from its own fund. It is only on account of the intervention of this Court and the auction conducted and ultimately finalized, the property has been able to fetch much higher price and roughly double the price than the property was to be sold away by respondent No. 6 company i.e. the price realised is Rs. 15.10 crore. Since now more fund has been generated the claim is to be forwarded by respondent No. 6 company to get the surplus of the amount after paying the amount as was agreed in the proposed OTS Scheme as full and final settlement. It is with that purpose to get surplus of the amount and to direct the concerned financial institutions to accept OTS as offered by the petitioner, the application being Civil Application No. 3363 of 2007 has been preferred by the respondent No. 6 company. It deserves to be recorded that had the respondent No. 6 company acted as per the OTS and the property was to be sold away at Rs. 7.15 crore, no surplus would have remained, but on the contrary, respondent No. 6 company had to additionally deposit the amount of Rs. 50 lac towards such O.T.S. 17. Therefore, if the aforesaid aspect is taken into consideration, it appears that there is already an admission on the part of the respondent No. 6 Company as per the statement made in Civil Application No. 3363 of 2007 to the extent that if the concerned Financial Institution is ready to accept the amount as full and final settlement as per the details referred to herein above, the same can be paid to them. The aforesaid statement is made by the applicant with full consciousness that the matters are pending before the respective authority for adjudication on the aspects of ascertainment of the amount and fixation of the liability, including the ascertainment of the amount for luxury taxes, etc.
The aforesaid statement is made by the applicant with full consciousness that the matters are pending before the respective authority for adjudication on the aspects of ascertainment of the amount and fixation of the liability, including the ascertainment of the amount for luxury taxes, etc. Therefore, it is hardly fair on the part of respondent No. 6 to contend that until the adjudication is fully made by the Debts Recovery Tribunal or other forum, no amount whatsoever should be disbursed to the respective Financial Institutions and the disbursement may await till then. If the matter is considered in light of the aforesaid circumstances, the amount as stated by the applicant in Civil Application No. 3363/2007 and referred to herein above, can be permitted to be disbursed to the respective Financial Institutions, subject to the finalisation of any other amount by the concerned authority or the forum on all aspects, including the aspect of acceptance of the offer for OTS being full and final settlement of the concerned loan account of respondent No. 6 Company. As the matters are at large pending for consideration before the appropriate forum or the competent authority on the aspect of fastening of the liability and also ascertainment of the amount, respondent No. 6 company may put forward its case before such competent forum or authority, as the case may be, contending that the amount as was offered be accepted as full and final settlement towards the liability of respondent No. 6 company. It will be for the concerned forum or the authority to examine the material available on record and to finalise the question of liability and ascertainment of the amount and at that stage the concerned forum or the authority, as the case may be, may also examine the aspect of the proposal for full and final settlement as made by respondent No. 6 and any action by respective financial institutions or the Government authority in this regard. However, the facts and circumstances of the present case would not go to show that no amount whatsoever be disbursed to the respective financial institutions or the Government authority, when they have to recover, as stated by them, huge amount from respondent No. 6 company.
However, the facts and circumstances of the present case would not go to show that no amount whatsoever be disbursed to the respective financial institutions or the Government authority, when they have to recover, as stated by them, huge amount from respondent No. 6 company. If ultimately the competent forum or the concerned authority, as the case may be, holds in favour of respondent No. 6 company to the effect that the offer for full and final settlement was acted upon and it is not open to the financial institutions or the Government authority to back out from the same, it may uphold the defence or the contention of respondent No. 6 company and in such circumstances, the amount so disbursed to the concerned Financial Institutions or the Government authority may stand appropriated accordingly. But if such defence is not accepted by the concerned forum or the concerned authority, as the case may be, then under such circumstances, such financial institutions or the concerned authority, may have right to recover the amount from respondent No. 6 Company, after giving set off and/or adjustment of the amount already disbursed to them in the present proceedings and would be entitled to only recover the remaining balance amount from respondent No. 6 company through process known to law. Of course, the aforesaid shall be without prejudice to the rights of respondent No. 6 company or any aggrieved party to carry the matter before the higher forum and if any orders are passed by the higher forum, the rights of the parties shall stand governed accordingly. 18. The aforesaid disbursement, if any, made by this Court may also be required to be refunded by the concerned Financial Institutions to respondent No. 6 Company in the event appropriate forum, wherever the adjudication process is yet to be finalized, takes the decision that no amount is recoverable by the concerned Financial Institutions or the Revenue Authority, as the case may be, from respondent No. 6 Company.
Therefore, in order to see that such contingencies are also taken care of, it will be required for the concerned Financial Institutions or the Revenue Authority, as the case may be, to file an undertaking before getting disbursement from this Court of the aforesaid amount, which was offered by the petitioner towards proposal for full and final settlement, to the effect that in the event it is found by the concerned appropriate forum that no amount is recoverable by the concerned Financial Institutions from respondent No. 6 Company, then such amount so received by it shall be refunded to the respondent No. 6 company with interest at the rate of 8% p.a., within a period of two months from the date of the decision of such appropriate forum, unless the same is stayed, modified or reversed by higher forum known to law. 19. Hence, the contention raised on behalf of the respective Financial Institutions or the Government Authority, as the case may be, deserves to be allowed to the aforesaid extent, subject to the conditions as prescribed herein above and the contention raised on behalf of respondent No. 6 Company, subject to the aforesaid observations, cannot be countenanced to the extent of no disbursement whatsoever to the Financial Institutions or the Government Authority concerned. 20. As regards the remaining amount is concerned, the same, in any case, will have to be retained until the final adjudication is made by the competent forum or the concerned authority. Even otherwise also the rights of the parties are to be governed by the final decision, as may be taken by the appropriate forum/authority, including higher forum thereof. 21. The application preferred by the employees of respondent No. 6 Company to direct the District Collector/Chairman of the Sale Committee to disburse the amount amongst the workers/employees and the secured creditors out of the sale proceeds, if considered, the same would not be required to be entertained qua disbursement/distribution to the secured creditors, since the aforesaid aspects are already considered in the earlier paragraph having taken into consideration the claim of the Financial Institutions, who are secured creditors keeping in view the amount already offered by respondent No. 6 company while offering proposal for One-Time Settlement.
So far as the distribution of the amount to the workers/employees are concerned, it appears that the details of the claim lodged by the concerned employees are not stated in the application. Further, no authority/forum has examined the same or finally has ruled about the quantification of the amount to be recovered by such employees. Therefore, it will be for the applicant of Civil Application No. 11592 of 2008 to initiate appropriate proceedings before the concerned Court/Forum for recovery of the amount and upon the adjudication therefore, such amount shall be payable from the amount lying with this Court on the basis of pari passu priority with the amounts claimed by the secured creditors/Financial Institutions herein. 22. The applicant of Civil Application No. 1733 of 2007 is the Assistant Provident Fund Commissioner, who is desirous to be impleaded as party respondent in the main Special Civil Application No. 11524 of 2002. As per the said application, the applicant has to recover the amount of Rs. 16,78,638/- towards P.F. Dues. As observed earlier, P.F. Dues would stand included in the workers' dues to be considered on pari passu basis. Therefore, if the workers have claimed the amount, excluding the P.F. Contribution by the employees, the claim of Provident Fund Authority may be required to be considered. However, if the workers have excluded the P.F. Contribution, which remained unpaid in the workers' dues, separate enforcement of the P.F. Contribution may not be required. No details are available on record on the said aspects and the application is only to be impleaded as party respondent. The learned Counsel for the applicant has also made submission for being impleaded as party respondent. Therefore, if the applicant is permitted to be impleaded as party respondent, no prejudice will be caused. 23. In view of the aforesaid, following consequences:- (i) The impugned action of respondent No. 2 for publication of the notification dated 30th September, 2002-Annexure "A" is quashed and set aside, so far as it relates to enforcing the right to recover the amount of Government Taxes as per the Code by nullifying the mandate of the power conferred upon the petitioner under Section 29 of the SFC Act. (1) However, as the sale has taken place pending the petition before this Court and the sale is confirmed in the proceedings before this Court, including LPA, the said sale shall stand confirmed.
(1) However, as the sale has taken place pending the petition before this Court and the sale is confirmed in the proceedings before this Court, including LPA, the said sale shall stand confirmed. (ii) Out of the amount of sale proceeds with the accrued interest lying with this Court, the following amount as per the table hereunder minus the amount as ordered to be recovered by way of penalty vide order dated 31.03.2008 passed by this Court (Coram :C.K. Buch, J.) in Civil Application No. 12417/07 in Special Civil Application No. 11524/02 with Civil Application No. 1585/08 read with the order dated 29.12.2008 passed by the Division Bench of this Court (Coram : K.S. Radhakrishnan, C.J. & Akil Kureshi, J.) in Letters Patent Appeal No. 753/08 in Civil Application No. 12417/07 with Letters Patent Appeal No. 889/08 in Civil Application No. 12417/07 with Letters Patent Appeal No. 1261/08 in Civil Application No. 1585/08 shall be disbursed to the concerned Financial Institutions and to respondent No. 2 being Government Authority, subject to the final decision, as may be taken by appropriate forum/authority, for final adjudication of the amount to be recovered or recoverable by the concerned Financial Institutions or the Government Authority, as the case may be, from respondent No. 6 Company and also on condition that the concerned Financial Institutions and respondent No. 2 file undertaking before this Court to the effect that in the event it is found by appropriate forum/concerned authority that no amount is recoverable by such financial institutions or the Government Authority, as the case may be, the amount received by it shall be returned to respondent No. 6 company with interest at the rate of 8% p.a. within two months from the decision of such forum/concerned authority, unless such decision is stayed, modified or reversed by higher forum known to law. Sr. Particulars Amount (in lac) (i) I.F.C.I Rs. 91.40 (ii) I.D.B.I Rs.138.63 (iii) Assets Reconstruction Company (now Usha Martin) Respondent No. 5 Rs. 65.77 (iv) G.I.I.C ((Petitioner) Rs. 32.29 (v) Charotar Nagarik Coop. Bank Limited Respondent No. 7 Rs.376.73 To all Secured Creditors Rs.704.82 Government Taxes: Luxury Tax Rs. 45.00 State Dues Rs. 60.00 Total Rs.809.82 (iii) The claim of the workers/employees, if any, can be considered on pari passu basis with the secured creditors.
65.77 (iv) G.I.I.C ((Petitioner) Rs. 32.29 (v) Charotar Nagarik Coop. Bank Limited Respondent No. 7 Rs.376.73 To all Secured Creditors Rs.704.82 Government Taxes: Luxury Tax Rs. 45.00 State Dues Rs. 60.00 Total Rs.809.82 (iii) The claim of the workers/employees, if any, can be considered on pari passu basis with the secured creditors. However, as the quantification is not finalised by any appropriate forum, nor are the details thereof placed on record, the disbursement of the amount to the workers/employees shall await till the final adjudication by the concerned forum, if any. Hence, the order for disbursement to the workers/employees is not passed at this stage, but upon the quantification of the amount by appropriate authority, the proportionate amount on pari passu basis with the secured creditor shall remain set apart towards workers' dues. (iv) The balance of the sale proceeds together with the accrued interest with this Court shall remain as invested. (v) After the aforesaid adjudication process is finalised before the appropriate forum/concerned authority, it would be open to the concerned Financial Institutions/concerned Authority to move this Court for further disbursement, if any, in accordance with law, unless such decision of appropriate forum/concerned authority is stayed, modified or reversed by higher forum known to law. (vi) It will also be open to respondent No. 6 company to move this Court for refund of the amount in the event, out of the decision of the adjudication process by appropriate forum/concerned authority, no further amount is payable by respondent No. 6 company to the concerned Financial Institutions, unless such decision is stayed, modified or reversed by higher forum known to law. 24. In view of the above, Special Civil Application No. 11524 of 2002 shall stand allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs. 25. Civil Application No. 1733 of 2007 shall stand allowed to the extent that the applicant is permitted to be impleaded as party respondent in the main Special Civil Application No. 11524 of 2002. No order as to costs. 26.
Rule made absolute accordingly. No order as to costs. 25. Civil Application No. 1733 of 2007 shall stand allowed to the extent that the applicant is permitted to be impleaded as party respondent in the main Special Civil Application No. 11524 of 2002. No order as to costs. 26. In view of the orders passed in the main Special Civil Application No. 11524 of 2002, as the rights and contentions raised in Civil Application No. 3363 of 2007, Civil Application No. 8997 of 2007 and Civil Application No. 11592 of 2008 are also considered, all the three Civil Applications i.e. Civil Application No. 3363 of 2007, Civil Application No. 8997 of 2007 and Civil Application No. 11592 of 2008 shall stand disposed of accordingly. No order as to costs. 27. At this stage, Mr. Mehta, learned counsel for respondent No. 6 prays that the operation of the Judgement be stayed for some time so as to enable the respondent No. 6 Company to approach before the higher forum. 28. Considering the facts and circumstances, status quo shall be maintained for a period of 15 days from today. Petition partly allowed.