Gujarat High Court
International Asset Reconstruction ... vs The Ol Of M/S Kankaria Chemicals ... on 14 March, 2022
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/COMA/14/2020 ORDER DATED: 14/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/COMPANY APPLICATION NO. 14 of 2020
In R/COMPANY PETITION NO. 173 of 1986
With
R/OFFICIAL LIQUDATOR REPORT NO. 149 of 2021
In
COMPANY PETITION NO. 173 of 1986
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INTERNATIONAL ASSET RECONSTRUCTION COMPANY PVT. LTD.
Versus
THE OL OF M/S KANKARIA CHEMICALS INDUSTRIES LIMITED (IN LIQN)
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Appearance:
MR AS PANESAR(5390) for the Applicant(s) No. 1
DHRUVKUMAR S CHAUHAN(8138) for the Respondent(s) No. 5
MR BHARAT JANI(352) for the Respondent(s) No. 2
MR JEET J BHATT(6154) for the Respondent(s) No. 1
MR K T KHATRI(11337) for the Respondent(s) No. 4
MS E.SHAILAJA(2671) for the Respondent(s) No. 7
NOTICE SERVED for the Respondent(s) No. 3,6
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 14/03/2022
ORAL ORDER
1. Heard learned advocate Mr. A.S. Panesar, learned advocate Mr. Vipulkumar M. Asodiya, learned advocate Mr. Dhruvkumar S. Chauhan, learned advocate Ms. E. Shailaja and learned advocate Mr. Jeet Bhatt for the respective parties.
2. The applicant of Company Application No.14/2020 is respondent no.6 in OLR No.149/2021. Company Application No.14/2020 is filed for disbursement to the secured creditors.
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3. The Official Liquidator has filed Official Liquidator Report No.149/2021 with following prayers :
"(A) This Hon'ble Court may be pleased to permit the Official Liquidator to make payment of Rs.38,81,435/- to the Employees' Provident Fund Organization being Respondent no.1 under section 529 of the Companies Act, 1956 and as per verification report of Chartered Accountant as stated at para-11 herein above from the funds available in the company's account.
(B) Such other and further orders and directions, as this Hon'ble Court may consider just and appropriate may also be passed."
4. Learned advocate Mr. Jeet Bhatt for the Official Liquidator submitted that company M/s. Kankaria Chemicals Industries Ltd. (In liquidation) was ordered to be wound up by order dated 21 st December, 1998 passed by this Court in Company Petition No.173/1986 and the Official Liquidator attached to this Court was appointed as liquidator of the said company under the provisions of the Companies Act, 1956 (For short, "the Act, 1956").
5. The Official Liquidator has taken the possession of the properties of the company in liquidation situated at Kalol, District Panchmahal. The Official Liquidator realised an amount of Rs. 10.51 crores on sale of the properties of the company in liquidation as confirmed by this Page 2 of 7 Downloaded on : Wed Mar 16 00:29:45 IST 2022 C/COMA/14/2020 ORDER DATED: 14/03/2022 Court vide order dated 12th January, 2012 passed in Company Application No. 508/2011 with OLR No. 247/2011 and order dated 27th August, 2015 passed in Company Application No.187/2012.
6. This Court by order dated 15th March, 2018 passed in Company Application No. 12/2017 directed the Official Liquidator to set apart an amount of Rs.2,04,10,000/- from the fund of Rs. 7 crores available in the accounts of company in liquidation and disbursed Rs. 4,95,90,000/- to the secured creditors and the workmen in the same ratio as per which earlier disbursement was made amongst the secured creditors and the workmen.
7. This Court by order dated 18 th December, 2018 passed in Company Application No.12/2017 directed the Official Liquidator to disburse an amount of Rs.5,19,717/- for chemical division and Rs. 25,74,390/- for paper division of the company in liquidation keeping open the right of Employees' Provident Fund Organization (EPFO) to claim the dues as per their claim filed in Form No.66 as per the Companies (Court) Rules, 1959 as it was an undisputed amount of Employees' Provident Fund.
8. The Official Liquidator accordingly disbursed an amount of Rs.30,94,107/- to EPFO.
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9. On receipt of such amount, EPFO filed further claim for amount of Rs.1,41,57,856/- after adjusting amount of Rs.25,74,390/- for paper division and claiming an amount of Rs.44,65,365/- after adjusting an amount of Rs.5,19,717/- for chemical division.
10. The Official Liquidator filed Official Liquidator Report No.5/2020 wherein this Court by order dated 30th January, 2020 permitted the Official Liquidator to appoint Chartered Accountants for examination and verification of claim of EPFO.
11. The Official Liquidator appointed M/s. Kamal C. Mehta & Company, Chartered Accountants for examination and verification of claim of EPFO, Vadodara. The Official Liquidator also provided a copy of order dated 6th January, 2016 passed by the Bombay High Court in Company Application No. 239/2014 to the Chartered Accountants to consider and verify the claim under sections 14B and 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (For short "the PF Act").
12. The Chartered Accountant submitted verification report dated 29th October, 2021 in the office of the Official Liquidator and has approved total claim of Rs. 38,81,435/- (Rs.8,27,692/- for chemical division and Page 4 of 7 Downloaded on : Wed Mar 16 00:29:45 IST 2022 C/COMA/14/2020 ORDER DATED: 14/03/2022 Rs.30,53,743/- for paper division) towards the dues under section 7A of the PF Act and under section 529A of the Act, 1956. The Chartered Accountant relied upon the decision of Bombay High Court however, did not allow the remaining claim of EPFO under section 14B and section 7Q of the PF Act.
13. The Official Liquidator has therefore, prayed to disburse an amount of Rs. 38,81,435/- to EPFO by OLR No. 149/2021.
14. Learned advocate Mr. Jeet Bhatt for the Official Liquidator submitted that the Chartered Accountants relying upon the decision of Bombay High Court in Company Application No.239/2014 has rightly not granted the claim of EPFO under section 14B for damages and interest after the date of winding up under section 7Q of the PF Act.
15. It was submitted that the Official Liquidator may be permitted to disburse the amount of Rs. 38,81,435/- to the EPFO.
16. On the other hand, learned advocate Ms. E. Shailaja appearing for EPFO submitted that EPFO has challenged similar order passed by the Bombay High Court before the Division Bench which is pending for adjudication being Appeal No.440/2018. It was submitted that subject to Page 5 of 7 Downloaded on : Wed Mar 16 00:29:45 IST 2022 C/COMA/14/2020 ORDER DATED: 14/03/2022 the rights and contentions of the EPFO being kept open, this Court may disburse the amount of Rs. 38,81,435/-. It was further submitted that the Official Liquidator may be directed to permit an opportunity of hearing to the EPFO to justify the claim under section 14B and section 7Q of the PF Act and thereafter file further report after hearing the EPFO qua the said claim.
17. Learned advocate Mr.A.S Panesar appearing for the applicant in Company Application No.14/2020 and respondent no.6 in OLR No.149/2021 and learned advocate Mr. Vipulkumar Asodiya appearing for respondent no.2-Bank of Baorda in OLR No.149/2021 submitted that they may also be given an opportunity of hearing by the Official Liquidator before submitting further report qua the issue of payment of damages under section 14B and interest under section 7Q after the date of winding up of the company in liquidation.
18. In view of above submission, the Official Liquidator is directed to disburse Rs. 38,81,435/- to the EPFO through RTGS/NEFT from the balance in the account of company in liquidation within a period of four weeks from today after getting necessary undertaking. It is further directed that the Official Liquidator shall give an opportunity of hearing to EPFO as Page 6 of 7 Downloaded on : Wed Mar 16 00:29:45 IST 2022 C/COMA/14/2020 ORDER DATED: 14/03/2022 well as the secured creditors to adjudicate upon the claim of interest under section 7Q as well as claim for damages under section 14B of the PF Act after the date of winding up. The Official Liquidator may await till the decision of Division Bench of the Bombay High Court as referred to by the learned advocate for EPFO is available.
19. In view of aforesaid observations and directions, both the Company Application as well as Official Liquidator Report are disposed of.
(BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 7 of 7 Downloaded on : Wed Mar 16 00:29:45 IST 2022