Partly allowed

M/s.Rikvin Floors Ltd.(In Liqn.) v. The Asst. General Manager

Telangana HC15 Sept 2014COMPA/1076/2014

Case brief

AI extract

What is this about?

This composite order permitted the Official Liquidator of M/s. Rikvin Floors Ltd. to declare and disburse balance dividends to secured creditors via a separate account and fixed schedules. However, the court refused a prayer for the respondents to pay interest on excess interim dividends, finding no statutory provision or convention for same; other procedural prayers were allowed.

What did the court decide?

Authorised declaration and disbursement of balance dividends to secured creditors; opened separate dividend account; dispensed with newspaper notice. Refused direction for payment of balance interest

M/s.Rikvin Floors Ltd.(In Liqn.) Vs The Asst… — Insolvency and Bankruptcy | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY COMPANY APPLICATION Nos.1076 and 1077 of 2014

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IN R.C.C.No.6 of 2002

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Dated: 15.09.2014

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Between:

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M/s. Rikvin Floors Ltd. (in liqn.) Rep. by the Official Liquidator, High Court of Judicature at Hyderabad, For the State of Telangana and the State of Andhra Pradesh.

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.. Applicant

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and

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The Asst. General Manager, IDBI Bank Limited, and others.

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.. Respondents

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Counsel for the applicant: Mr. M. Anil Kumar

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Counsel for respondents 1 to 3: Mr. P.V. Markandeyulu

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The Court made the following:

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COMMON ORDER:

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Company Application No.1076 of 2014 is filed by the Official Liquidator on behalf of M/s. Rikvin Floors Limited (in liquidation) for the following reliefs:

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i) permit the Official Liquidator to declare and disburse balance dividend of Rs.80,062.27 to IDBI, R-1; Rs.34,47,572.97 to IFCI, R-2 & Rs.33,391.26 to Standard Chartered Bank, R-3 on realization of fixed assets of the company (In Liqn.), after adjustment of interim dividends already paid to them in pursuance of orders of this Hon'ble High Court from time to time, and also permit him to declare and disburse dividend of Rs.5,303.82 to SBI, R-4 on realization of current assets of the company (In Liqn.) and Rs.3,956.80 to the workmen on realization of all the assets of the company (In Lion.), aggregating to a total amount of Rs.35,70,287.12 as detailed in the statement marked as Annexure-"G";

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ii) permit the Official Liquidator to adjust the proposed dividend of Rs.80,062.27 pertaining to IDBI, R-1 and further direct the said respondent No.1 to pay the balance interest of Rs.1,34,739/(i.e. 2,14,801 - 80,062). Similarly, permit the Official Liquidator to adjust the proposed dividend of Rs.33,391.26 pertaining to Standard Chartered Bank, R-3 and direct the said respondent No.3 to pay the balance interest of Rs.2,87,146/- (i.e. 3,20,537 - 33,391) as detailed in Para 5 & 6 of this application;

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iii) authorise Official Liquidator to open a separate dividend account in Punjab National Bank and pay the dividend to the secured creditors out of the said account, in terms of Rule 290 of the Companies

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(Court) Rules, 1959;

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iv) dispense with the publication of notice of dividend in newspapers;

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v) dispense with the adjudication of claim of M/s.APIDC against shares held by them in the company (In Liqn.);

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vi) authorise the Official Liquidator to send individual notices of dividend in Form No.138;

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vii) authorise the Official Liquidator to fix the schedule for making payment;

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viii) authorise the Official Liquidator to transfer the unpaid dividend, if any, remaining in the dividend account, after the expiry of the 6 (six) months period to Companies Liquidation Account, in terms of Section 555 of the Companies Act, 1956;

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ix) authorise the Official Liquidator to take all necessary actions and steps which are incidental to declaration and payment of dividend and to effectively implement the orders of this Hon'ble Court in that regard; and

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x) order that the costs of this application do come out of the Estate of the Company (In Liqn.).”

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Company Application No.1077 of 2014 is filed for taking on record the certificate in Form No.71 filed as Annexure-F relating to the company in liquidation, to direct the Registrar of this Court to notify Form No.71 on the notice board of this Court in terms of Rule 169 of the Companies (Court) Rules, 1959 (for short ‘the Rules’) and order that the costs of this application do come out of the estate of the company in liquidation.

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Though notice has been served, no one represented respondent No.4.

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At the hearing, Mr. P.V. Markandeyulu, learned counsel representing respondents 1 to 3, submitted that his clients have no

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objection for grant of the reliefs claimed by the Official Liquidator in the two applications, except to the extent of the direction to respondent Nos.1 and 3 to pay the balance interest of Rs.1,34,739/- and Rs.2,87,146/- respectively.

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Consequent on adjudication of the claims of all the secured creditors who are arrayed as respondents 1 to 4, the Official Liquidator has filed Form No.71. This adjudication is not disputed by any of the respondents. Therefore, I do not find any reason to refuse the request of the Official Liquidator to take on record Form No.71 with the direction to the Registrar (Judicial) to place a copy of the Form on notice board of this Court in terms of Rule 169 of the Rules.

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As regards payment of balance interest by respondents 1 and 3, it is the pleaded case of the Official Liquidator that in pursuance of the interim direction granted by this Court, all the secured creditors have received interim dividends and that after disbursement of such interim dividends, respondents 1 and 3 were found to have received certain amounts in excess of the interim dividends they were entitled to receive. The Official Liquidator has sought for a direction to charge interest and withhold the same from out of the final dividend payable to them.

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At the hearing, it has come out that neither the statutory provisions prescribe payment of such interest nor any convention has been established by the Court to direct payment of interest over such excess payments. In this view of the matter, I am not inclined to grant this relief claimed by the Official Liquidator. As regards the other prayers in Company Application No.1076 of 2014, none of the respondents have disputed the same.

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Accordingly, except to the extent of direction to pay the balance

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interest by respondents 1 and 3, all other prayers sought in these applications are allowed.

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Both the company applications are accordingly allowed to the extent indicated above.

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_________________________ C.V. NAGARJUNA REDDY, J 15^th September, 2014 IBL

M/s.Rikvin Floors Ltd.(In Liqn.) v. The Asst. General Manager

Case brief

What is this about?

What did the court decide?

M/s.Rikvin Floors Ltd.(In Liqn.) v. The Asst. General Manager

Case brief

What is this about?

What did the court decide?

What the court decided

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