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2020 (3) TMI 528 - HC - Companies LawWinding up process - disbursement of amounts in discharge of debt - priority of charge of secured creditors - HELD THAT:- In present case, it is undisputed that some amount, out of sale proceeds of assets of the Company, already stands released in favour of Secured Creditors without taking into consideration the provisions of Sections 529 and 529A of the Companies Act, wherein statutory charge has been created in favour of workmen in respect of their dues from the Company over the security of every Secured Creditor and also workmen’s dues have been categorized as ‘overriding preferential payments’. It is evident that under Section 529A(1)(b), the Secured Creditors shall be entitled for overriding preferential payments of debts to the extent these are governed under clause (c) of proviso to Section 529(1), pari passu with workmen’s dues, if the Secured Creditor, instead of relinquishing his security and proving his debts, opts to realize his security without participating in the winding-up proceedings, and in case he participates effectively in the winding-up proceedings then Section 529A(1)(b) will not be available to the Secured Creditor for want of applicability of clause (c) of proviso to Section 529(1) of the Companies Act. Payment under Sections 529A(1)(a) and 529A(1)(b) shall be made in priority to all other dues. Amount of debt payable under Section 529A(1)(b) is to be determined, in terms of clause (c) of the proviso to Section 529(1). As held by the Apex Court, for such debt ranking pari passu with the workmen’s dues for the purpose of Section 529A, two limbs of proviso to Section 529(1) are to be satisfied - In absence of security and exercise of option by Secured Creditor to realize the same, there will not be any debt equivalent to workmen’s portion, realization whereof could not be made by the Secured Creditor and in such eventuality there will be no right of overriding preferential payments under Section 529A(1)(b) in favour of Secured Creditor. In the present case, there is no debt due to the Secured Creditors, falling in the category of ‘debts’ defined under clause (b) of Section 529A(1) of the Companies Act, to be paid as overriding preferential payments under Section 529A(1)(b) to them. So far as workmen’s dues under Section 529A(1)(a) are concerned, the Official Liquidator has submitted report of Chartered Accountant dated October 10, 2014, wherein except three claims of workmen, all claims have been verified as workmen’s dues and the claims of the remaining three applicants have been got verified by the Official Liquidator lateron, after passing of order, of condonation of delay in filing of those claims, in Company Application No.36 of 2014. Therefore, workmen’s dues of workmen, who had filed the claims before the Official Liquidator, stand duly verified. Fee of Chartered Accountant, in present case, is to be governed by the order dated 9.10.2007, passed by this High Court, wherein it is ordered that remuneration of the Chartered Accountant will be on case-to-case basis, depending upon the nature and quantum of work to be performed/assigned. Application disposed off.
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