IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER & THE HONOURABLE MR. JUSTICE P.Q.BARKATH ALI FRIDAY, THE 19TH MARCH 2010 / 28TH PHALGUNA 1931 Co.Appeal.No. 7 of 2010() ------------------------- (AGAINST THE ORDER DATED 25-11-2009 OF THIS COURT IN COMPANY APPLICATION N.583/2009 IN COMPANY PETITION NO.34/1998) APPELLANT/ PETITIONER/CREDITOR: ---------------------------------------- M/S.DENA BANK, ASSET RECOVERY BRANCH PSR VASHISHTA DHAMA, NO.38, 12TH CROSS, NEAR CBI OFFICE, GANGA NAGAR NORTH, BANGALORE-560 032. BY ADV. SRI.GEORGE THOMAS (MEVADA), SENIOR ADVOCATE RESPONDENT(S): RESPONDENT/DEBTOR: --------------------------------- M/S.LAXMI STARCH LTD. (IN LIQUIDATION) REPRESENTED BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.K.MONI FOR B/O THIS COMPANY APPEAL HAVING COME UP FOR ADMISSION ON 19/03/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: A.K.BASHEER & P.Q.BARKATH ALI, JJ. - - - - - - - - - - - - - - - - - - - - - Co.Appeal No.7 OF 2010 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 19th day of February, 2010 JUDGMENT Basheer, J. This appeal is directed against the order passed by the Company Court on an application filed by the appellant praying for a direction to the Official Liquidator to pay the entire amount realised through sale of the assets of the company towards the dues outstanding to the appellant. Admittedly appellant is a secured creditor of the company in liquidation 2. The learned Judge took the view that the prayer cannot be granted at this stage in view of the contention raised by the Official Liquidator that adjudication of various claims was not yet over and dividend was yet to be declared. 3. When this appeal is taken up for consideration, learned counsel who appears for the Official Liquidator submits that adjudication of various claims is almost over, though dividend has not yet been declared. The Official Liquidator has filed a statement before us indicating that a sum of Rs. 12,80,31,598 is now available to the Co.Appeal.No.7/2010 Page numbers credit of the company in liquidation, “as on date”. The other details furnished in the statement are extracted here under : Amount admitted to the Dena Bank u/s.529A -Rs.21,64,27,844.00 Amount admitted to the Indian Bank u/s.529 A -Rs.15,62,01,139.00 Amount admitted to the workers & staff u/s. 529 A -Rs. 3,66,29.740.00 4. Learned counsel for the appellant submits that going by the provisions contained in Section 529A of the Companies Act 1956, the entire amount available with the Official Liquidator has to be divided among the two secured creditors, namely the appellant and the Indian Bank, and also the workers and staff on pari pasu basis. Though Indian Bank is not a party to this appeal, Sri.Eswaran, who appears for the above secured creditor submits that he supports the contention raised by the appellant in this regard. 5. But in our view since there is no representation for the workers and staff before us in this proceeding and admittedly since the claim of the workers and staff is in the region of Rs. 3,66,29,740, it may not be proper to direct the Liquidator to disburse the entire amount Co.Appeal.No.7/2010 Page numbers on pari pasu basis at this stage. Therefore, we direct that a sum of Rs. 3,66,29,740/- being the admitted amount payable to the workers and staff be retained with the Official Liquidator for the time being. The balance amount can be disbursed to the appellant and Indian Bank proportionately on adhoc basis, subject to further orders of the Company Court and pending final adjudication in the matter. It is made clear that this payment has to be made to the appellant and Indian Bank on sufficient undertaking to be furnished by them before the Official Liquidator. 6. It will be open to the Official Liquidator to seek further appropriate directions from the Company Court with regard to other matters like declaration of dividend, disbursement of amount to the workers and staff etc. Any how, the sum of Rs. 3,66,29,740/- shall be retained with the Official Liquidator and can be disbursed to the workers and staff after obtaining further directions from the Company Court. 7. The amount shall be released to the appellant and Indian Bank by the Official Liquidator as expeditiously as possible, at any Co.Appeal.No.7/2010 Page numbers rate, on or before March 30, 2010. The Appeal is disposed of in the above terms. A.K.BASHEER, JUDGE P.Q.BARKATH ALI, JUDGE sv. Co.Appeal.No.7/2010 Page numbers