THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.939 of 2011 13th October, 2011 Between :- K.Rama Krishnam Raju .. Applicant And M/s.Tungabhadra Industries Limited Rep.by the Official Liquidator, High Court of A.P., Hyderabad .. Respondent THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.939 of 2011 ORDER:- This application has been filed by K.Rama Krishnam Raju assailing the notice of rejection of proof of debt issued by the Official Liquidator representing M/s.Tubgabhadra Industries Limited (in Liqn). The petitioner claims that he worked as Shift Engineer from 19-6- 1982 till October, 1994. The Company came to be wound up on 9-7- 2011 as per Orders in R.C.C.No.22 of 2000 and the Official Liquidator came to be appointed as its Liquidator. The Official Liquidator invited claims from the creditors of the Company by way of notice in Form No.63. In response to the notice, the applicant filed a claim on 7-9- 2006 for an amount of Rs.1,70,000/- towards arrears of his salary and other allowances. The Official Liquidator informed the applicant stating that his claim had already been adjudicated by order dated 19- 11-2007. The applicant filed this application seeking direction to the Official Liquidator to release the amount. The Official Liquidator placed on record his report. It is stated in the report that the claim of the applicant has been adjudicated and an amount of Rs.76,859-85 P.S., has been admitted as preferential debt taking the designation of the petitioner as Engineer in the Company (in Liqn). As on this day no amount is available with the Official Liquidator to meet the preferential debt. Para 6 of the report needs to be noted and it is thus:- “Thereafter, the applicant had filed his claim before this office individually and also along with union claim. The said claim was adjudicated and admitted an amount of Rs.76,859-85 P.S., vide Form No.69 dated 19-11-2007 admitting his claim under preferential debt taking into his designation as Engineer of the Company. Thereafter, the individual claim filed by the applicant had been rejected vide Form No.69, dated 21-2-2008 informing him that his claim was already adjudicated and admitted in the claim filed by the union. Subsequently, this office filed a Company application for taking on record the certificate in Form No.71 in respect of secured creditors & workmen claims and thereafter the same was varied vide C.A.No.363 of 2009 which was taken on record on 18-4-2009. The Hon’ble Court was pleased to direct the Official Liquidator to declare @ 100% of their admitted secured debt and also to Cent.Bank financial & custodial services Ltd., towards debentures & SBI in C.A.No.364 of 2009 dated 18-4-2009. Accordingly, the said 1st dividend was disbursed to the secured creditors & workmen of the Company (in Liqn) adjusting the interim dividends already paid to each one of them. The amount of Rs.28.50 crores was only paid to SBI (towards loan dues) out of Rs.55.32 crores admitted as secured debt which remains a balance of Rs.26.82 crores yet to be paid to SBI. Since, the amount admitted in respect of secured debt has not even been settled completely, the question of payments to preferential creditors (applicant’s debt) may not arise. At present, an amount of Rs.51.00 lakhs is available to the credit of the Company, which may not be sufficient to declare the dividend and disburse the balance admitted secured debt (i.e., Rs.26.82 crores) of SBI.” Heard learned Counsel appearing for the parties. It is not in dispute that the claim submitted by the applicant has been adjudicated and an amount of Rs.76,859-85 P.S., has been arrived at as preferential debt. The secured debts of the Company (in Liqn) have not yet been fully discharged and therefore the question directing the respondent to pay the preferential debt of the applicant does not arise. The Official Liquidator has to consider payment of the amount due to the applicant after liquidating the liabilities covered under Section 530 of the Companies Act, 1956. Accordingly, the Company Application is dismissed. ________________________ B.Seshasayana Reddy, J 13th October, 2011 smr