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Gujarat High Court · body

2023 DIGILAW 134 (GUJ)

O. L. Of Ahmedabad Eagle Engg. v. Manager GSFC

2023-01-13

BHARGAV D.KARIA

body2023
ORDER : 1. Heard learned advocate Ms. P.J. Davawala for the applicant, learned advocate Mr. A.S. Asthavadi for respondent no.1 and learned advocate Ms.Nalini S. Lodha for respondent no.2. 2. By this report, the Official Liquidator has prayed for the following reliefs: “(A) This Hon’ble Court may be pleased to hear GSFC and Bank of Baroda before passing any order of Disbursement/recovery from the concerned secured creditors of the company in liquidation. (B) This Hon’ble Court may be pleased to permit Official Liquidator to pay an amount of Rs. 20,00,000/- or such amount as may be permitted by the Hon’ble High Court to GSFC in this regard. (C) This Hon’ble Court may be pleased to direct Bank of Baorda to refund an amount of Rs. 15.53/- lacs plus applicable rate of interest to the Official Liquidator.” 3. This Court vide order dated 14.06.2017 passed in Official Liquidator Report No.37 of 2016 directed the Official Liquidator to get a report from the Chartered Accountant for reverification of the claim of Gujarat State Financial Corporation (GSFC) as the Official Liquidator prayed for refund of Rs.8,87,772/- in terms of order dated 23.06.2009 passed by this Court in Company Application No.420/2007 along with interest at the rate of 12% from 23.06.2009 till date of payment from the GSFC. This Court observed the following facts in the said order dated 14.06.2017: “3. It appears from the record of the application that as per Order dated 23.6.2009 passed by this Court in Company Application No. 420 of 2007, directions were given to the Official Liquidator for disbursement of the amount to the workmen and secured creditors of the company under liquidation named Ahmedabad Eagle Engineering Private Limited. The record further indicates that as per the order passed by this Court, the Official Liquidator was not attended by the respondent No.1 - The Manager, GSFC. The record further indicates that as per the report submitted by M/s. K.K. Patel & Company, Chartered Accountants, the secured creditors and workmen were entitled to the amount: Sr. No. Particulars Amount (Rs.) 1. Bank of Baroda 15,53,059/- 2. GSFC 15,53,059/- 3. Workers 8,80,465/- Total 39,86,583/- It further appears from the record that on due consideration of the final claim, the Chartered Accountant has filed a report stating that the respondent No.1 has received an amount of Rs. No. Particulars Amount (Rs.) 1. Bank of Baroda 15,53,059/- 2. GSFC 15,53,059/- 3. Workers 8,80,465/- Total 39,86,583/- It further appears from the record that on due consideration of the final claim, the Chartered Accountant has filed a report stating that the respondent No.1 has received an amount of Rs. 8,87,772/- in excess, and therefore, this application is preferred by the Official Liquidator, for refund of the said amount. The record also indicates that lastly by communication dated 7.7.2015, the respondent No. 1 informed the Official Liquidator that no order has been passed for such a refund and there is no basis to restrict the claim of the respondent No.1 only to the tune of Rs. 6,65,287/-. By the very said communication, the respondent No.1 asked for a report of the Chartered Accountant; Minutes of the Sale Committee meeting held on 6.8.2009, and any order of the Court to make refund. The record further indicates that the said letter was replied to by the Official Liquidator vide communication dated 20.7.2015 giving all the details to the respondent No.1. It again appears from the record of the application that by further communication dated 12.8.2015, the respondent No.1 informed the Official Liquidator that this Court had passed no orders for refund of the amount. The Official Liquidator again reiterated its demand for refund by further letters dated 19.8.2015 and 7.9.2015. The said communication was responded to by the respondent No.1 through their learned advocate by communication dated 17.11.2015. In the aforesaid facts of the case, the present report is filed with a prayer, directing the respondent No.1 to refund the amount so claimed. 5. In response to the notice issued by this Court, the respondent No.1 has reiterated its stand, which was focused in the earlier correspondence as well as in their reply given by the learned advocate for the respondent No.1. 6. Having heard learned Counsel appearing for the parties and on perusal of record of this application in the opinion of this Court, the interest of justice would be served, if the Official Liquidator is directed to take another opinion based upon the report earlier submitted by the Chartered Accountant. Such opinion may be placed on the record by filing a separate report. 7. Mr. Such opinion may be placed on the record by filing a separate report. 7. Mr. A.S Asthavadi, learned Counsel appearing for the respondent No. 1 has candidly submitted that the respondent No. 1 shall have no objection for such a course being adopted to ascertain the correctness of the amount. The Official Liquidator was directed to give names of three Chartered Accountants. On such names having been given to the Court, in the facts of this case so as to avoid any controversy, the following directions are given :- (1) The Official Liquidator shall send the documents pertaining to the payment made alongwith copy of all orders passed by this Court, to M/s CR Jain & Company within a period of 15 days from the date of receipt of this order. (2) The Official Liquidator shall call for any further details from the respondent No.1, if the same is required by learned Chartered Accountant to ascertain the issue and the respondent No.1 shall be obliged to give such details, if the same is with and/or within the knowledge of the respondent No.1. (3) Such exercise shall be carried expeditiously as possible and on receipt of the report from M/s. C.P. Jain & Company, learned Chartered Accountant, the Official Liquidator shall submit a separate report.” 4. Pursuant to the aforesaid order, the Official Liquidator by letter dated 9.02.2018 addressed to M/s. C.P. Jain & Company, Chartered Accountants requested to give a reverification report with regard to claim of GSFC. Accordingly, Chartered Accountants M/s. C.P. Jain & Company by report dated 23.07.2018 submitted that the amount of outstanding of GSFC, Bank of Baroda and Dena Bank as mentioned in the report of M/s. K K Patel & Co., Chartered Accountants which was relied upon by the Official Liquidator in Official Liquidator Report No.37/2016 is not correct and the Chartered Accountants, M/s. C.P. Jain & Company, was of the opinion that GSFC had first charge over the land, building, plant and machineries and hence disbursement should have been made accordingly. 5. 5. On the basis of above report of the Chartered Accountants, the Official Liquidator has filed this report with a prayer to permit the Official Liquidator to pay an amount of Rs.20,00,000/- or such amount as may be permitted by this Court to GSFC and to direct the Bank of Baroda to refund an amount of Rs.15.53 lakhs plus applicable interest to the Official Liquidator. 6. For making such prayers, the official Liquidator has made the following averments in the report : “(5) That, the Official Liquidator has vide letter dated 01.08.2018 forwarded copy of the said report to GSFC to seek their opinion/objection/consent of the said report. In response of the said report, the Official Liquidator has received a letter dated 21.08.2018 from Mr. A. S. Asthawadi, Ld. Advocate appointed by GSFC. In the said letter, Ld. Advocate informed that as on 08.06.2018, the outstanding dues of GSFC is Rs.3,69,84,659/- and the Office of the Official Liquidator realized an amount of Rs.1,08,71,920/- towards sale proceeds and out of that an amount of Rs.8,80,465/- paid towards workers dues. Ld. Advocate further informed that out of the remaining amount of Rs.99,94,455/-, the Official Liquidator disbursed an amount of Rs.15.53 Lacs each to Bank of Baroda and GSFC respectively. In the said letter, Ld. Advocate further informed that being exclusive first charge over assets and properties of the company in liquidation, the Official Liquidator has to recall amount of Rs.15.53 Lacs disbursed to Bank of Baroda and the entire remaining sale proceeds of Rs.199,94,455/- is required to be disburse along-with interest earned on said amount to GSFC. A copy of letter dated 01.08.2018 & 21.08.2018 are annexed herewith and marked as Annexure "E" (Colly.).” 7. The Official Liquidator further stated that out of the sale proceeds, the Official Liquidator has disbursed the amount as under : Sr. No. Particulars Order Date Amount(Rs.) 01 Bank of Baroda 15,53,059/- 02 GSFC 15,53,059/- 03 Workmen 8,80,465/- 04 Bank of Baroda 23.06.2009 47,67,000/- 05 Dena Bank passed in COMA No. 420 of 2007 2,33,000/- Total 89,86,583/- 8. The aforesaid disbursement was made pursuant to the order passed by this Court on 23.06.2009 in Company Application No. 420/2007. According to the Official Liquidator, the fund position of the account of the company (in liquidation) as on 15.02.2019 is Rs.24,21,965.23. 9. The aforesaid disbursement was made pursuant to the order passed by this Court on 23.06.2009 in Company Application No. 420/2007. According to the Official Liquidator, the fund position of the account of the company (in liquidation) as on 15.02.2019 is Rs.24,21,965.23. 9. The Official Liquidator therefore, without obtaining any report from the Chartered Accountant, has made prayers for disbursement of Rs. 20,00,000/- to the GSFC on the basis of letter of the advocate of the GSFC as stated here-in-above in paragraph no.5 of the report. 10. This report is therefore, not entertained at this stage and it is disposed of with a direction to the Official Liquidator to file an appropriate report after referring the matter to the Chartered Accountant so as to determine the amount to be disbursed to the GSFC, Bank of Baroda and other secured creditors in appropriate ratio. Merely because the GSFC has first charge over the property, entire amount could not have been disbursed to GSFC without there being any verification report from Chartered Accountant to that effect. After obtaining fresh report and after giving an opportunity by the Chartered Accountant to all the secured creditors before giving report, the Official Liquidator may file appropriate report with appropriate prayers for disbursement. 11. Official Liquidator Report No.27/2019 is accordingly disposed of. 12. Company Application No.21/2019 is filed seeking disbursement of entire remaining amount of sale proceed of Rs.99,91,455/- with interest in view of report of Chartered Accountant dated 23.07.2018 wherein Chartered Accountants, M/s. C.P. Jain & Company, was of the opinion that GSFC had first charge over the land, building, plant and machineries and hence disbursement should have been done accordingly. 13. However, in Official Liquidator Report No.27/2019, this Court observing that merely because the GSFC has first charge over the property, entire amount could not have been disbursed to GSFC without there being any verification report from Chartered Accountant to that effect, has given direction to the Official Liquidator to obtain fresh report after giving an opportunity by the Chartered Accountant to all the secured creditors and thereafter, to file fresh report, and therefore, Company Application No. 21/2019 would not survive and is disposed of accordingly.