1 ca325-11.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.325 OF 2011 IN COMPANY PETITION NO.924 OF 2003 Jayantilal A. Shah, Constituted Attorney of Devyani J. Shah .. Petitioner and Helbon Engineers Pvt.Ltd. .. Applicant Versus The Official Liquidator, High Court .. Respondent Mr.Rahul Chitnis, Senior Advocate with Rajesh Choudhary, P. Rajgor i/b. PDS Legal for applicant Mr.V.P.Sawant i/b. V.P.Vaze for respondent Mr.N.Chinnachary, Dy.O.L. Ms.Rupa Sutar, Assistant O.L. CORAM : S.C.DHARMADHIKARI, J. 13th October 2011. P.C.: 1] At the request of the applicant, this company application is allowed to be withdrawn with liberty to adopt appropriate proceedings against the company in liquidation and particularly in relation to the agreement dated 5th September 2007, a copy of which is annexed to this application at page 10 Exh.B to the affidavit in support. All contentions of both sides in relation to the 2 ca325-11.doc claim that may be made, pursuant to this withdrawal are kept open. 2] At the request of Mr.Chitnis, it is directed that for a period of two months from today, the Liquidator shall not dispossess the applicant from the immovable property in its possession, provided the applicant maintains status quo as of today in relation to this property for a period of two months from today. The status quo be maintained at site accordingly. (S.C.DHARMADHIKARI, J) OFFICIAL LIQUIDATOR REPORT NO.269 OF 2011/LIQN.I Jayantilal A. Shah .. Petitioner versus M/s.Farrel Anand Machinary Manf.Pvt Ltd .. Respondent In the light of the withdrawal of the company application and the order made therein, presently Mr.Sawant appearing for Liquidator states that the Liquidator is not seeking any reliefs in terms of prayer clause (a) of this report. The request of Liquidator to pass orders in terms of prayer clause (a) is deferred for a period of eight weeks from today. 3 ca325-11.doc 2] As far as prayer (b) is concerned, Mr.Sawant states that Bank of Baroda was one of the secured creditor of the company in liquidation. The representative of Bank of Baroda informs the Liquidator in a meeting dated 28th February 2011 that the company in liquidation has already settled the dues of the said bank under One Time Settlement scheme. The bank submitted a letter dated 16th May 2011 along with statement of account and NOC indicating that it has received a sum of Rs.3,38,32,000/- plus interest of Rs.14.85 lakhs for the period as per the compromise proposal sanctioned and the company in liquidation has a credit balance of Rs.43,282/-. It is stated in the report that date of payment to Bank of Baroda is not informed. 3] Learned Counsel places reliance upon a letter dated 24th May 2011 of the Bank of Baroda addressed to the Deputy Official Liquidator confirming this fact and relies upon the annexures thereto. 4] In the submission of Mr.Sawant, notice of this report was 4 ca325-11.doc served on Bank of Baroda. It has failed to respond to the said notice. It has received notice and yet has not filed any response nor is any representative of the said bank present in Court. 5] Mr.Sawant submits that the company in liquidation was wound up on 26th July 2010. However, the record would indicate that the company petition for winding up was admitted on 4th February 2005. The order of winding up was passed on 26th July 2010. Inviting my attention to the provisions enabling the Court to pass an order of winding up, it is contended that such an order enures for the benefit of all creditors as if it had been made on their joint petition. Therefore, upon an order of winding up being passed, the same relates back to the date of presentation of the winding up petition. Admittedly, the bank of Baroda has informed that the payment has been made some time by the company in liquidation, post the winding up order. In any event, it is made during the pendency of the proceedings. That the application of doctrine of relation back is, therefore, not in dispute. The documents that have been placed on record would indicate that on 4th July 2007, the bank issued a no dues certificate in favour 5 ca325-11.doc of the company in liquidation. Therefore, at least until that date the claim was not settled. If at all the monies were received, they were received during the course of proceedings. Upon the order of winding up being passed, it was the duty, therefore, of Bank of Baroda to inform the Liquidator and if required by the Liquidator to bring back the monies and deposit them with him. The secured creditors have to be treated equally and particularly in the light of section 529 and 529A of the Companies Act, would rank pari pasu and, therefore, their claim is on par as stated in the statutory provisions. 6] Today claims of workmen and others have to be invited. They have to be adjudicated. Therefore, the Bank of Baroda cannot retain any sums as that would mean that one of the creditors and that too claiming to be a secured one gets preference over others. 7] Mr.Sawant, therefore, submits that the report be made absolute in terms of prayer clause (b). Having heard Mr.Sawant at some length and with his assistance perusing the report and 6 ca325-11.doc annexures, including the letter dated 4th July 2007, leaves me in no manner of doubt that the bank appears to have agreed to one time settlement with the company in liquidation, post admission of this company petition. Atleast the company in liquidation was aware of the fact that a winding up petition is pending in this Court against it. Thereafter the winding up petition was admitted. The order of winding up may have been made subsequently but applying the principles of relation back, which have statutory recognition in terms of sections 441 of the Companies Act, Mr.Sawant's submissions would require acceptance. The claims against the company have yet to be received by the Liquidator and, thereafter, would be required to be adjudicated. In these circumstances, interest of justice would be served if, firstly the Liquidator is directed to advertise and issue a public notice inviting claims from all interested parties, including workmen of the Company in liquidation and upon adjudication thereof, if the amount to the credit of the company or the funds lying with the Liquidator insofar as the subject company is concerned, fall short so as to enable him to meet the dues of the secured creditors, workmen and others, including 7 ca325-11.doc statutory dues, then, he can call upon the Bank of Baroda to deposit Rs.3,53,17,000/- in terms of prayer clause (b) of the report and on such a communication being received from the Official Liquidator, Bank of Baroda shall comply with the same and deposit monies within eight weeks from the date of receipt of such communication. Report is made absolute in terms of prayer clause (b) with liberty as above. (S.C.Dharmadhikari, J).