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2015 (11) TMI 194 - HC - Companies LawSale after winding up - Deed of Assignment executed by exdirector - rights of secured creditor - whether Shashi Gopal, in his capacity as a subrogee, was entitled to sell any of the hypothecated securities without the leave of the Company Court? - whether the sale is liable to be set aside under Section 536(2) or 537(1)(b) of the Companies Act? - Held that:- After the introduction of Section 529-A which gave workers a pari passu charge along with secured creditors in mortgaged or hypothecated securities in a winding up, it is no longer open for a secured creditor to contend that it is entitled to enforce its securities without reference to or the leave of the Company Court. It was then contended on behalf of MMPL that the Official Liquidator having failed to adjudicate the claims of the workmen, no pari passu charge in their favour could be said to exist which would limit the right of the subrogee to deal with the hypothecated securities. This argument is clearly misconceived. The mere fact that the Official Liquidator has not yet adjudicated the claims of workmen would not disentitle them to a pari passu charge or leave a secured creditor free to deal with a security as he chooses. The circumstances of the present case leave little doubt that the sale itself, without the leave of the court and given the manner in which it was effected, was unlawful. Thus following Order would meet the ends of justice: a) The Deed of Assignment dated 14.03.2012 between Shashi Gopal and MMPL in respect of the hypothecated securities is set aside as illegal and void. b) MMPL shall on or before 2nd December,2015, deposit a sum of ₹ 25 lakhs with the Official Liquidator, being the difference between the amount already received by MMPL from Sony Music (₹ 1.75 crores) and the amount paid by MMPL to Shashi Gopal (₹ 1.5 crores). c) The Official Liquidator shall complete the adjudication of the claims of the workmen of the Company in Liquidation within a period of sixteen weeks from today. In doing so, the Official Liquidator shall also consider whether the claims are in fact by persons who are entitled to priority as workmen under Section 529-A of the Companies Act. He shall also verify the amounts paid by Shashi Gopal to UBI to which he is entitled to credit as a subrogee. d) On such adjudication and verification, the Official Liquidator shall place a report before this Court for a distribution pari passu of the amount so far generated from the hypothecated securities, i.e., ₹ 1.75 crores, between the workers and Shashi Gopal as subrogee. In that report, this Court shall consider the amount, if any, that Shashi Gopal would be liable to bring in to meet the amounts due to the workmen in such a distribution. e) Sony Music shall render accounts to the Official Liquidator of the revenue generated by it from the exploitation of the rights which are the subject matter of the Agreements in its favour. Any overflow which was payable to MMPL under the terms of the said Agreements shall be distributed pari passu among Shashi Gopal as a subrogee and the workmen of the Company in liquidation. f) On expiry of the tenure of the Agreements in favour of Sony Music; MMPL, Shashi Gopal and Sony Music shall hand over forthwith to the Official Liquidator all material and documents in respect of the repertoire which constitutes the hypothecated securities including but not limited to Masters, Link Agreements and publicity material. The Official Liquidator shall thereafter take steps under the directions and supervision of this Court to sell and/or license the rights which constitute the hypothecated securities. Any revenue generated by such sale/exploitation shall be distributed pari passu among Shashi Gopal and the workers of the company in liquidation. Any overflow shall be distributed in accordance with the Companies Act and the Company Court Rules.
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