Court dismissed company application and absolved official liquidator's report requiring borrower to repay excess interest paid after winding-up order and to withdraw inaccurate proof filed.
Order to repay Rs.30,28,575 with interest; leave to expunge proof under Rule 176.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
16 CA NO.118_2014.DOC
JSN
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.118 OF 2014
IN
COMPANY PETITION NO.7 OF 1971
ALONG WITH
OFFICIAL LIQUIDATOR’S REPORT NO.535 OF 2015
Maharashtra State Financial Corporation...Applicant
And
Esso Master Industries… Petitioner
Versus
The Official Liquidator of M/s. Glass ...Respondents
Corboys & Pressware Ltd.
Mr. C.B. Kher, i/b. Ms. Shamika Ranade for the applicant.
Mrs. Yogini Chauhan, Deputy Official Liquidator, High Court.
CORAM:G.S. PATEL, J.
DATED:16th March 2016
P.C.
1.This order disposes of Company Application No.118 of 2014
and Official Liquidator’s Report No.535 of 2015.
2.A few facts are necessary. The Applicant is the Maharashtra
State Financial Corporation (“MSFC”.) On 24th September 1963 it
sanctioned A loan of Rs.10 lakhs to the Company in liquidation,
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M/s. Glass Corboys & Pressware Ltd. That loan was apparently for
15 year term. It carried interest at 9% pa.
3.On 15th November 1972, the Company was ordered to be
wound up. In the course of that winding up, the MSFC lodged A
claim with the Official Liquidator in the amount of Rs.3,39,54,967/.
In making this claim, the MSFC computed interest from the date of
sanction of the loan all the way to the date of submission of its claim
on 24th September 2008.
4.The Official Liquidator assessed the claim. He adjudicated it
in an amount of Rs.50,47,750/-. Of this, Rs.10 lakhs was the
principal, Rs.8,22,750/- was interest till the date of the order of
winding up on 15th November 1972 and Rs.32,22,000/- was
interest from the date of the winding up order 16th November 1972
till the date of filing of the claim on 24th September 2008.
5.The result was that MSFC’s claim was adjudicated in an
amount which was roughly one-sixth of what had submitted.
MSFC, therefore, filed the present Company Application seeking
re-adjudication of its claim.
6.As things turn out, this is something that works to MSFC’s
disadvantage. It is a sort of self-goal. Faced with the Company
Application, the Official Liquidator re-examined the claim. He
found that far from being underpaid, his original computation was
incorrect and MSFC had been overpaid. It was entitled to only
Rs.20,19,175/-. This was because interest could not have been
allowed beyond the date of the winding up order.
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7.This is the reason why the Official Liquidator has filed OLR
No.535 of 2015. In this report it seeks an order in terms of
paragraphs 15 and 18 to permit expunging of proof in terms of rule
176 of the Companies (Court) Rules 1959. The Official Liquidator
also seeks leave to re-adjudicate MSFC’s claim and also seeks a
direction against MSFC to repay an amount of Rs.30,28,575/- paid
in excess. This is because according to the Official Liquidator on a
correct computation MSFC is today entitled only to an amount of
Rs.20,19,175/-. However, the amount already paid out to MSFC is
Rs.50,47,750/-.
8.I do not see how I can possibly allow MSFC’s Company
Application. It will have to be dismissed. The entire basis of the
claim is incorrect and untenable. But the consequence of this
Company Application is that the Official Liquidator’s Report will
have to be allowed at least at part. The Liquidator must be
permitted to expunge the proof as required in Rule 176 of
Companies (Court) Rules.
9.There is no reason to direct a further re-adjudication of
MSFC’s claim. That is as already been done in the present Official
Liquidator’s Report.
10.The Official Liquidator’s Report is, therefore, made absolute
in these terms and in terms of prayer clause (e) which directs
MSFC to pay an amount of Rs.30,28,575/- with interest from the
date of payment by the Official Liquidator to MSFC till realisation.
The Official Liquidator shall on or before 31st March 2016
communicate to MSFC the amount required to be refunded or
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repaid to the Official Liquidator and showing the break-up of
interest calculation as well. MSFC will make payment of this
amount within four weeks from 31st March 2016. The amount shall
carry interest at the same rate till payment or the realisation.
11.At this stage, a request is made by Mr.Kher on behalf of
MSFC seeking a stay of this order for eight weeks. This is
unreasonable given what MSFC is, the nature of its application and
the nature of its claim. The application for stay is rejected.
(G. S. PATEL, J.)
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1 issue framed by the court
Whether the Official Liquidator's report should be accepted to permit recovery of sum overpaid to the applicant and expungement of erroneous proof
1 provisions across 1 enactments
Maharashtra State Financial Corporation
Esso Master Industries
The Official Liquidator of M/s. Glass Corboys & Pressware Ltd.
G.S. PATEL
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court