- (1.) Heard the parties at length. This Interlocutory Application( I.A.) has been filed on behalf of Edelweiss Asset Reconstruction Company Ltd., ( EARC for short), for release of amount to the extent of 61.90% of the claim adjudicated by the Official Liquidator, as an interim/ad hoc payment, from the sale proceeds of the Company under liquidation, as has been released to other secured creditors.
(2.) Only one counter affidavit, objecting to the said prayer has been filed on behalf of intervener/workmen-one Nand Keshwar Prasad, contending that (i) the claim of EARC is time barred under Article 137 of the Limitation Act and (ii) the assignment to EARC by IIBI (the Industrial Investment Bank of India Ltd) in 2011, is void, as the mortgaged property of the Company under liquidation was already sold by this Court in this proceeding.
(3.) The said objections are not sustainable for the following reasons. (i) Re. the first objection- The claim of IIBI, a secured creditor of the Company under liquidation was alive when it was declared sick on 4.3.1998. The matter was referred by BIFR to this Court on which this Company Petition was presented on 16.4.2002. IIBI presented a separate Company Petition ( Company Petition No. 5 of 2002), which was disposed of on 5.8.2003, in view of the winding up order passed on the same day in this company case, with liberty to approach the Official Liquidator or to avail, other remedy. Then the possession of the assets of the Company in Liquidation, was taken over by the Official Liquidator. IIBI also paid its share of security charges till June, 2004. The claim of Secured Creditors including IIBI was before BIFR and without it's permission, there could not be any payment. In this case, the last date for submissions of claim by IIBI was up to 19.4.2007. But in the meantime, as per the plan of the Government of India, IIBI started to wind up its operation in 2005-06. IIBI invited bids for selling/transferring/assigning its right including security interests/pledges and/or guarantees in relation thereto, under the tender document dated 18.06.2010. The highest bid offered by EARC ( a Company registered under SARFAESI Act), was accepted and it was approved by Government of India. Consequently, IIBI assigned its right, title and interest including the debts disbursed to the Company under liquidation by IIBI, along with all underlying security interest in all the security created by the Company under liquidation and/or guarantors to EARC under the deed of assignment dated 3.8.2011. Thereafter, within a reasonable time, this I.A. was filed on 2.12.2011. Keeping in view all these facts and circumstances, the prayer of EARC for its substitution in place of IIBI was allowed in this proceeding on 14.10.2011 after hearing the parties. Similarly by order dated 11.11.2011, the prayer of EARC for condoning the delay in filing the affidavit of proof of debt and directing the official liquidator to adjudicate the claim of the petitioner was allowed. Thereafter, EARC lodged its claim to the tune of Rs.11,49,87,839/-. The official liquidator adjudicated the claim to the extent of Rs.3,22,61, 612/- and rejected the claim to the tune of Rs.8,27,26,227/-. According to the official liquidator, he has adjudicated the claim of EARC as per the statement of the account as well as the loan documents filed before him. The claim was not time barred, on the date of presentation of this winding up case. In terms of Section 441 (2) of the Companies Act, the winding up proceeding commenced on the presentation of the petition i.e. 16.4.2002. The statement of affairs submitted by the ex-director showed that on the date of winding up, the assets of the Company under liquidation, were mortgaged or hypothecated with the secured creditors, including IIBI. The workmen could not dispute the factual aspects noticed above and could not show as to how the claim of IIBI was barred under Article 137 of the Limitation Act on the date of presentation of this winding up petition. Moreover, as per Article 62 of the Limitation Act, the limitation is 12 years in case of mortgage. In this case, the properties in question were mortgaged with IIBI, in whose shoes, EARC has stepped into. (ii) Re. the second objection:- On passing the winding up order, the official liquidator took and held the assets of the Company under liquidation for disbursing the sale proceeds of the assets amongst the creditors in accordance with law. IIBI transferred it's right to claim and receive payment in favour of EARC. It cannot be treated as actual transfer of property. EARC is a Company registered under the SARFAESI Act. In view of section 2(1) (l), 2(t)(iii) and Section 5 of the SARFAESI Act, the "financial assets" is not extinguished by the actual sale of the assets of the Company under liquidation.;