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2015 (4) TMI 886 - CALCUTTA HIGH COURT

2015 (4) TMI 886 - CALCUTTA HIGH COURT - TMI - Winding up - Claim of secured creditor rejected by Official Liquidator - Discriminatory treatment to one creditor - Held that:- In the present case, the earlier transferees were aware of the change. They agreed to the change, however, formality might not have been completed that might debar the Bank to claim the money on the basis of such subsequent charge. However, the earlier transferees were not entitled to raise such issue and their consent reco .....

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, we adjourned the matter and directed the Official Liquidator to pay, whatever according to them would be payable to the Bank. We directed so when we noticed, others were paid in ad hoc to the total exclusion of the Syndicate Bank. Official Liquidator paid only poultry a sum of ₹ 8 lakhs. When we asked Mr. Tilak Bose to explain, he would contend, in absence of appropriate papers, the Official Liquidator could not calculate the interest over the claim amount and thus they made prorata paym .....

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s per the direction of the learned Company Judge in his administrative capacity. - Decided partly in favour of appellant. - A.P.O. No. 168 of 2014, BIFR 52 Of 1988 - Dated:- 17-4-2015 - Ashim Kumar Banerjee And Shivakant Prasad JJ. For the Appellant : Mr. Rajsekhar Mantha, Senior Advocate, Ms. Gopa Chakraborty, Advocate, Ms. Paromita Purkait, Advocate For the Respondent : Mr. Tilak Bose, Senior Advocate, Mr. Anupam Das Adhikari, Advocate Ashim Kumar Banerjee, J. INCIDENT THAT GAVE RISE TO THE PR .....

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BIFR formulated a scheme and asked the Syndicate Bank and Indian Overseas Bank to invest further sums to revamp the company s financial position. Syndicate Bank and Indian Overseas Bank thus invested further sums approximately ₹ 4.68 crores on condition that they would have pari-passu charge covering the further financial support that the other financial institutions should have agreed. The BIFR accordingly approved the scheme. Syndicate Bank would claim, they registered the charge coverin .....

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cent per annum. The Official Liquidator sold the assets of company for a sum of ₹ 4.01 crores. The present dispute would start from there. Official Liquidator invited claims from the creditors. By an order dated November 30, 2007, the Official Liquidator admitted the claim of the Bank to the extent of ₹ 15,46,60,497. Nobody objected to such settlement. IFCI also got their claim settled to the extent of ₹ 4.4 crores as a preferential claim. Disbursements were also made on ad hoc .....

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ial Liquidator also could not give any plausible explanation as to how those payments were made to the exclusion of Syndicate Bank. The Official Liquidator in its report would contend, the Bank did not make any claim to the extent, it had any charge on the land and building. Surprisingly, the learned advocate appearing for the other financial institutions namely, IDBI, IFCI appeared before the learned Company Judge and pointed out that the claim of the Syndicate Bank over the security was restri .....

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ected an investigation to be made. Syndicate Bank was also permitted to take appropriate steps in the matter. The matter appeared before the other Company Judge on change of determination. Vide order dated September 2, 2011, the learned Company Judge directed fresh determination after hearing all the secured creditors giving a reasoned decision. Accordingly, the Official Liquidator conducted a fresh adjudication and rejected the claim of the Bank beyond ₹ 20 lakhs. According to the Officia .....

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in rejected the claim of the Bank vide order dated April 22, 2013 appearing at page 361-363 of the paper book. The reasoning was all the more same. Significant to note, although the Official Liquidator was having a consistent view on the priority to the extent of ₹ 20 lakhs, they paid nothing to the Syndicate Bank, despite substantial payments made to the other secured creditors. The discriminatory treatment is apparent on the face of the record. We wonder, how a public authority acting un .....

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d with the consent of the other secured creditors they extended further financial support with the understanding that they would be registering the charges pari-passu with the other secured creditors covering the enhanced financial support. They would heavily rely on the letter of the other financial institutions through the lead institution being IFCI appearing at pages 293-295 and the Certificate of Registration appearing at page 296-299. The other financial institutions would contend, they di .....

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utions. The leaned Judge also considered Section 48 of the Transfer of Property Act and observed, in absence of consent from each of the first charge holders, the findings of the Official Liquidator could not be interfered with. The learned Judge imposed heavy cost on IFCI, IDBI and permitted those financial institutions to recover such sum from their counsel if they so like. Being aggrieved, Bank filed the appeal. CONTENTIONS: Mr. Rajsekhar Mantha, learned Senior Counsel advanced his argument o .....

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d, however, in view of change of determination, the said financial institutions got the same restored in a different way that made the situation complex. He would rely upon page 307 of the paper book where the claim of the Syndicate Bank was shown. They had been settled at ₹ 15.48 crores and the Official Liquidator suggested payment to the Bank to the extent of ₹ 1.84 crores. Even then, no payment was made although the other secured creditors were duly paid on ad hoc basis. He would .....

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sent, there was no occasion to take any further step in the matter at least, IFCI or its group members would be precluded from questioning the authority of the Bank to claim security pari-passu on the extended financial support. He would submit, pursuant to the order of the BIFR, Bank changed its status and acted upon the said order. Hence, they could not be denied the proportionate reimbursement. He would submit, he was already handicapped because of the indifferent treatment on the part of the .....

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creditors would have any hand in it. The parri-passu charge that the secured creditors would be having was as per the deposit of Title Deeds and compliance of the requirement in law. Section 48 of the Transfer of Property Act would not permit one of the creditors to claim better right than the others on the basis of the modified charge in absence of the consent being obtained from the other secured creditors who were ranking parri-passu with them. He would rely upon the Apex Court decision in t .....

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r attention to the Certificate of Charge that would also have restriction up to ₹ 4.98 crores as would be appearing from page 297 and would lastly submit, this Court should pass an appropriate order that the Official Liquidator would comply with. OUR VIEW The conduct of the Official Liquidator is not above Board. We still wonder, how the order dated January 15, 2010 could be passed. Even if the financial institutions would try to obtain the said order the Official Liquidator should have br .....

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would ad best support his claim to the extent of ₹ 4.99 crores approximately. The letter dated September 24, 1991 clearly recorded, the other financial institutions agreed to have pari-passu charge for the additional loan of ₹ 25 lakhs and working capital loan of ₹ 173.41 lakhs in favour of the Syndicate Bank. The relevant extract is quoted below: The mortgage and charge of IFCI, IDBI, ICICI, IRBI and LIC shall in all respects rank pari-passu with the mortgages and charges cre .....

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our Loan Agreements/Letter of Sanction etc. for all purposes and to all intents. In the later part of the said letter, the financial institutions also agreed, undertook and confirmed that they would enter into a parri-pasu agreement with the Syndicate Bank and obtain necessary permission from the company to such arrangement. We wonder, how the financial institutions could take the plea of Section 48 of the Transfer of Property Act at this stage, that would be too much and it would be a dishonest .....

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ld rely upon paragraphs 17, 40, 41 and 49. In that case, the Punjab National Bank granted loan to the company knowing that the ICICI Bank had a first charge. In the instant case, the Syndicate Bank was having the charge over the assets to the extent of 20 lakhs. However, the extended financial support was given at the direction of BIFR a statutory authority and that too, with concurrence from all the financial institutions particularly IFCI group that would be apparent from the said order dated .....

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been completed that might debar the Bank to claim the money on the basis of such subsequent charge. However, the earlier transferees were not entitled to raise such issue and their consent recorded in the said letter would preclude them to do so. The Official Liquidator would thus be obliged to take into consideration the entire situation and treat the modified charge as a valid one at least, to the extent as recorded with the Registrar of Companies. Our conscience would prick if we uphold such .....

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