IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 07.02.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN Original Side Appeal No.7 of 2008 M/s. ICICI Bank Limited, 93 Santhome High Road, Chennai 600 028, represented by its Assistant General Manager Appellant/Applicant. v. 1. Official Liquidator, High Court, Madras, As Liquidator of SECALS Ltd., in liquidation. 2. Industrial Development Bank of India, No.115, Anna Salai, Saidapet, Chennai 600 015. 3. Industrial Finance Corporation of India Ltd., 142, Mahatma Gandhi Road, Post Box No.3318, Chennai 45. 4. Andhra Bank, Mount Road Branch, 95, Anna Salai, Chennai 2. 5. State Bank of India, Rehabilitation and Recovery Branch, 5th Floor, New No.157-A, Anna Salai, Chennai 2. 6. State Bank of Travancore Building, Main Branch, United India Building, Esplanade, Chennai 600 108. Respondents/Respondents. Appeal filed against the judgment of a learned single Judge of this Court dated 31.08.2005 made in Company Application No.134 of 2005 in Company Petition No.263 of 2001. https://hcservices.ecourts.gov.in/hcservices/ Company Application No.134 of 2005 in Company Petition No.263 of 2001 : Company Application praying this Court to direct the Official Liquidator to pay a sum of Rs.4,42,25,414.15 on or before 15.2.2005 or any other date fixed by this Court, from and out of Rs.5,20,29,899/- lying in the credit of C.P.No.263/2001. For Appellant : Mr.Jayesh Dolia for M/s.Aiyar and Dolia. JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) This appeal is filed against the order dated 31.08.2005 made in Company Application No.134 of 2005 in Company Petition No.263 of 2001. The Company M/s.Secals Limited has been ordered to be wound up as per the orders of this Court dated 01.08.2002 in C.P. No.263 of 2001 on the basis of the recommendations made in BIFR No.332 of 2000. By the said order, the Company Court directed the Official Liquidator to take charge of the assets of the company. Further, the directors of the company were directed to file statement of affairs within three weeks from the date of the order of liquidation of the company. This Court, in O.S.As. Nos.244 and 245 of 2003 by order dated 17.12.2003 permitted the appellant herein to sell the assets of the company in liquidation and deposit the sale proceeds to the credit of the company petition after defraying the expenses. Pursuant to the same, a sum of Rs.5,20,29,899/- has been transferred to the Official Liquidator by the appellant on 16.04.2004. Thereupon the appellant filed an application in Company Application No.134 of 2005 seeking for a direction from this Court to the Official Liquidator to pay the sum of Rs.4,42,25,414.15 from and out of the deposit made by the appellant. This Court, by order dated 04.02.2005 directed the Official Liquidator to transfer the said sum of Rs.4,42,25,414.15 lying to the credit of C.P. No.263 of 2001 to the appellant secured creditor on condition that the appellant has to necessarily bring back the entire money to the credit of the Company Petition, if a need for the same arises for completion of adjudication. Pursuant to the same on 14.02.2005 the Official Liquidator deposited the said amount with the appellant bank. Thereupon, on 31.08.2005 that application came up for further orders before the Company Court. The Court passed the following order : "In the order dated 04.02.2005, the Official Liquidator was directed to transfer a sum of Rs.4,42,25,414.15 from and out of Rs.5,20,29,899/- which was lying to the credit of C.P. No.263 of 2001. The applicant in C.P. No.263 of 2001 in C.A No.134 of 2005 (sic) is stated to have made a claim for the said sum of Rs.4,42,25,414.15 before the Official Liquidator. In such circumstances, since the said claim is yet to be adjudicated upon by the Official Liquidator, the amount which is now lying in deposit with the applicant in C.A. https://hcservices.ecourts.gov.in/hcservices/ No.134 of 2005 should earn interest. By inadvertence or oversight the said fact is omitted to be mentioned in the order dated 04.02.2005. Therefore, the said order dated 04.02.2005 in Company Application No.134 of 2005 in company petition No.263 of 2001 is further clarified to the effect that the deposit directed to be made with the said applicant shall earn interest from the date of such deposit. As against the said order, the present appeal is made by the appellant. 2. We heard Mr.Jayesh, learned counsel and also the Official Liquidator. 3. Mr.Jayesh has argued that the appellant company being a secured creditor and entitled to the sum advanced by it to the company, the deposit made with the appellant need not be burdened with any interest. He also submitted that now that the adjudication of claim by various secured creditors has already been over and on adjudication, the Official Liquidator has quantified that the appellant is entitled to Rs.18.00 crores from the company and out of the amount deposited in a sum of Rs.4.42 crores, the share of the appellant comes to Rs.2.71 crores, and in view of the fact that the company is owing the money to the appellant, there is no necessity to order interest over the deposit. 4. The appellant is not the only secured creditor. There are several other secured creditors and also unsecured creditors. The amount realised in the sale of the assets of the company in liquidation has to be disbursed in accordance with the provisions of the Company Court Rules. Any deposit made during the interregnum period has to necessarily be with the Official Liquidator who is holding the amount in fiduciary capacity as a trustee for the creditors and any deposit made during the interregnum period has to earn interest so as to enable the Official Liquidator to make use of the interest income for disposal of both the secured creditors and other creditors. As per the provisions of the Company Court Rules, we are not able to countenance the argument of the learned counsel to the effect that the deposit made with the appellant bank need not be burdened with interest. To that extent, the order of the learned single Judge has been confirmed. In the second part of the order made by the learned single Judge, the rate of interest has not been quantified. 5. Having regard to the fact that the appellant has enjoyed the money in a sum of Rs.4.42 crores and made use of the said amount for the banking business and having regard to the rate of interest prevailing during the relevant period, we are of the view that the rate of interest for the amount deposited with the appellant can be fixed at 12% per annum from the date of deposit till it is withdrawn/adjustment is made for the share of the https://hcservices.ecourts.gov.in/hcservices/ appellant. Such an order is passed. The appeal is disposed of in the above terms. No costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. mf To The Sub Assistant Registrar, Original Side, High Court, Madras. + 1 CC To M/s.Aiyar and Dolia, Advocate SR NO.6117 O.S.A. No.7 of 2008 ng[co] gp/20.2. https://hcservices.ecourts.gov.in/hcservices/