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2013 (1) TMI 642 - HC - Companies LawScheme of Compromise - Directors of company-in-liquidation submitted scheme of revival of company-in-liquidation - sanction to such scheme refused by Single Judge - The applicant preferred appeal before the Division Bench who passed interim order directing to implement the revival scheme and directing Official Liquidator (OL) to handover the possession within the prescribed time-limit - the applicant/appellant agreed to deposit the amount of Rs. 25,00,000 towards cost, since it was so demanded by the OL - matter carried in SLP by the OL before the Apex Court who directed the Division Bench for de novo consideration of the scheme in accordance with law who after hearing both the sides & the jugement and order, dated 7-10-2011 came to be passed - applicant sought for review of the decision of the Court, dated 7-10-2011 as OL had to recover the shortfall from the assets of the company-in-liquidation, since the Court rejected the revival scheme and the OL was not entitled to keep the balance of Rs. 25,00,000 - engagement of the advocate appearing for OL in the appeal was not approved by the Company Court - Whether judgment passed in appeal seeking scheme of revival of company-in-liquidation was to be reviewed or re called? Held that:- As out of the amount of Rs. 25,00,000, since the OL has already borne the expenses of Rs. 12,43,960 towards security expenses for preservation of property and amount of security expenses are already paid by the OL, the OL cannot be directed to refund the said amount. Further, after excluding the amount of security expenses already paid, net balance comes to Rs. 12,56,040. As against the same, the bills of security agencies deployed from 23-6-2003 to 20-3-2009 of Rs. 74,64,342 are pending, for which the matters are also pending before the Company Court and, hence, the order for refund of the amount of Rs. 12,56,040 does not deserve to be passed at this stage. But it is directed that the OL shall separately mark and maintain the fund of Rs. 12,56,040 and after the dispute with the security agencies towards the bill of Rs. 74,64,342 is finalized, the OL shall make use of the amount of Rs. 12,56,040, if required, and thereafter if any surplus balance remains, the same shall be refunded to the applicant. In the present case, the OL had engaged Advocate in view of the facts and circumstances that engagement of an advocate was required. If the Company Court has declined to ratify the action of the OL, the consequence may arise that the Advocate may not get his fees for his engagement, but thereby, per se, it cannot be said that all his action, including that of defending the proceedings on behalf of the OL would be vitiated. Considering the submissions on behalf of the OL, it cannot be said that any contentions of the OL on behalf of the company-in-liquidation, may be through Advocate appointed were against the interest of the company-in-liquidation. Thus merely because the Advocate was lacking authority, per se, is no ground to review and recall the order, more particularly when it is not found that any action is taken by the OL or by the Advocate engaged by the OL against the interest of the company-in-liquidation for opposing the appeal preferred by the applicant. Thus considering the facts and circumstances, it is found that no valid ground is made out to recall and review the order, dated 7-10-2011 as where appointment of advocate by OL against order refusing sanction of revival scheme was not approved by company court, same would not be valid ground to recall and review order passed in that appeal, but it is observed that the present order shall not operate as a bar to the applicant in resorting to appropriate proceedings for protecting the interest of the company-in-liquidation, as a shareholder of the company, if otherwise permissible in law.
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