Ramesh Ranganathan, J. - (1.) THE questions which arise for consideration, in this application, are (1) Whether the sum available, from the sale proceeds of the security of a secured creditor, after meeting the principal dues of the secured creditor with interest at the contracted rate till the date of winding up, and the dues of the workmen, can be utilized to pay the secured creditor interest at the contracted rate from the date of winding up till the date of sale of the secured assets or should it be applied for repayment of the principal dues of the unsecured creditors and, only thereafter, for payment of interest at 4% p.a. to all creditors, both secured and unsecured? and (2) the rate of interest payable to the workmen, along with their principal dues, in the absence of an agreement for payment of interest?
(2.) THE company in liquidation availed a loan from State Bank of India, (S.B.I.) for Rs. 160 Lakhs against the mortgage of immovable properties comprising of land and buildings i.e., the fixed assets belonging to the company situated at Pendurthi in Visakhapatnam District. Form Nos. 8 and 13, for registering the charge of land and buildings in favour of S.B.I, were filed with the Registrar of Companies, vide registration No. 3240 dated 24.02.2000. The company under liquidation failed to repay the debt due resulting in S.B.I. filing O.A. No. 739 of 2007 before the Debt Recovery Tribunal, Visakhapatnam on 18.12.2001 for recovery of Rs. 1,69,10,978.62 ps, (the then outstanding dues), and for interest thereon at 15% per annum compounded quarterly from the date of the application till realization, for the sale of the immovable properties of the company under liquidation charged in their favour by way of first charge, and to pay them the sale proceeds. Industrial Development Bank of India (I.D.B.I) filed O.A. No. 382 of 2001 before the Debt Recovery Tribunal, Hyderabad against the Company under liquidation impleading the guarantors of the sanctioned loan as defendants 3 to 5. S.B.I. was impleaded as the 6th defendant. The Debt Recovery Tribunal, in its order in O.A. No. 382 of 2001 dated 16.12.2003, allowed the application filed by I.D.B.I. subject to the rights of S.B.I. C.A. No. 1457 of 2007 is filed by the Official Liquidator seeking permission of this Court to declare 100% dividend to the secured/preferential creditors, 86.56% divided to the unsecured creditors of the company in liquidation whose claims had been adjudicated and for other consequential reliefs. In the affidavit filed in support of the application it is stated that the assets of the company were segregated into two lots of which the first lot comprised of land and buildings of the Company, and the second -lot comprised of plant and machinery, that the assets were brought to sale in two lots, and the land, buildings, plant and machinery of the company were sold for Rs. 530 lakhs, that the sale was confirmed by the High Court in June, 2006, that pursuant to the order of this Court, in C.A. No. 1400 of 2006 dated 11.10.2006, (whereby the official liquidator was directed to invite claims), the Official Liquidator had invited claims, that 23 claims from various creditors including secured creditors, unsecured creditors, preferential creditors were received and that, on these claims being adjudicated, Form No. 71 was filed which was taken on record by order of this Court in C.A. No. 1276 of 2007 dated 24.07.2007. According to the Official Liquidator he had first completed adjudication of the claims of the secured creditors, that the amount claimed by S.B.I. of Rs. 1,87,24,709.20, (Principal plus interest till the date of the winding up), was admitted in its entirety and treated as secured debt, that I.D.B.I. and S.B.I. were paid their entire secured debt, except for Rs. 709/ -, as interim payment, that the claims received from BSNL, the Income Tax Department, the workmen and I. Ramakrishna and sons could not be adjudicated for want of compliance of the procedural requirement under the Companies (Court) Rules, 1959, that Rs. 2,40,16,649/ - was available to the credit of the company in liquidation which is to be disbursed to the creditors since all valid claims were adjudicated and placed on the notice board of this Court in accordance with Rules 167 and 169 of the Companies (Court) Rules, 1959, that no appeal was pending in respect of these adjudicated claims and, though the Official Liquidator was not obliged to set apart any amount for future claims, (there being on record some belated claims from governmental authorities), an amount equivalent to such claims for Rs. 37,06,433/ - had been kept aside from the proposed dividend distribution and that the Official Liquidator proposed to disburse dividend at 100% to all secured and preferential creditors and at 86.56% to the unsecured creditors.
(3.) THIS Court, in its order dated 3.9.2007, noted the appearance of Sri P.V. Markandeyulu, Learned Counsel for I.D.B.I and issued notice to the other secured creditors. In his affidavit of proof of service dated 14.9.2007, the Official Liquidator stated that notice was served on I.D.B.I. through special messenger and that notice was sent to S.B.I, Visakhapatnam by speed post on 12.9.2007. This Court, in its order dated 25.10.2007, directed that the name of Sri K. Gopalakrishna Murthy, Standing Counsel for S.B.I. be printed in the cause list and posted the application to 29.10.2007.;