Allowed

M/s.Hiflon India Ltd.(In Liqn.) v. -

Telangana HC20 Oct 2014COMPA/1245/2014

Case brief

AI extract

What is this about?

The Hon'ble Court allowed a company application seeking permission for the Official Liquidator to declare and disburse a dividend to workmen, dispense with newspaper notice publication, and authorize payment to legal heirs of deceased workmen upon indemnity.

What did the court decide?

Permitted declaration of 20.50% dividend, dispensation from newspaper notice, and authorization to pay deceased workmen's dues to heirs via indemnity.

M/s.Hiflon India Ltd.(In Liqn.) Vs - — Insolvency and Bankruptcy | Telangana HC (2014)

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HON’BLE SRI JUSTICE A. RAJASHEKER REDDY

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COMPANY APPLICATION NO.1245 of 2014 IN

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R.C.C. NO. 12 OF 1998

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ORDER:

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This application is filed by the Official Liquidator on behalf of M/s. Hiflon India Limited (In Liqn.) for the following reliefs.

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(i) permit the Official Liquidator to declare and disburse dividend @ 20.50% in a rupee, amounting to Rs.5,50,092/- to 68 workmen of the company as proposed in Annexure-D.

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(ii) authorize Official Liquidator to open a separate dividend account in Punjab National Bank and to pay the dividend to the secured creditor out of the said account, in terms of Rule 290 of the Companies (Court) Rules 1959;

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(iii) permit the Official Liquidator to dispense with the publication of notice of dividend in newspapers as the dividend is sought only by workmen union.

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(iv) Permit the Official Liquidator to send notice of dividend in Form No.138 along with 139 to the workmen through its Union.

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(v) Authorise Official Liquidator to transfer the un-paid 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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(vi) Authorise the Official Liquidator to pay dividend amount to any deceased workmen/creditors to his/her legal heirs upon produce of proofs by such legal heirs, death certificate, family members certificate or such other certificate issued by M.R.O. or like authority instead of producing a succession certificate and also upon furnishing personal indemnity, in terms of Rule 280 of the Companies (Court) Rules 1959.

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(vii) Authorise 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.

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(viii) Order that the costs of this application do come out of the Estate of the Company (In Liqn.).

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In support of the application, the Official Liquidator filed an affidavit stating that this Court vide order dated 22.12.2003 made in

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CA.No.1496/2003 filed by APSFC seeking permission to finalise the sale of Land & Buildings in favour of the highest bidder to appropriate the sale proceeds for itself, it should prove its claim before the Official Liquidator. The proceeds realized through the sale of the properties shall be kept by the Corporation in interest earning deposits till the Official Liquidator adjudicates and quantifies the claim of the Corporation. The Corporation shall deposit 1/4^th of the sale proceeds with the Official Liquidator to enable him to proceed with the adjudication of the claims of the Workmen and for distribution among themselves. The Corporation shall make over the excess sale proceeds, if any, to the Official Liquidator.

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It is also submitted that APSFC filed OS.No.12/2004 against the orders passed in CA.No.1496/2003 dated 22.12.2003 and this Court vide order dated 25.03.2004 confirmed the order passed by the learned Company Judge directing the confirmation of sale of the properties in favour of the highest bidder, subject to condition that the Official Liquidator shall quantify the amounts liable to be paid to the workmen.

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Thereafter, this Court vide order dated 30.12.2005 made in CA.No.1389/2005 permitted the Official Liquidator for invitation of the claims and accordingly the Official Liquidator has caused publication of advertisement of invitation of claims in Andhra Jyothi and Deccan Chronicle, News Paper on 27.01.2006 and fixed lat date for receipt of claims as 28.02.2006.

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It is further submitted that the workmen union lodged their claim belatedly on 30.09.2010 before the office of the Official Liquidator, claiming a sum of Rs.68,51,437/- on behalf of 74 workmen and further the workmen union obtained condonation of delay order from this Court vide order dated 25.10.2010 in C.A.No.892/2010. Accordingly, the Official Liquidator had adjudicated the claim of the workmen union and issued form No.69 dated 30.01.2013 admitting an amount of Rs.26,83,383/- as secured debt in respect of 68 workmen and

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Rs.8,99,100/- as unsecured debt and rejected the balance amount of Rs.32,68,954.

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As per the directions of this Court, a letter dated 19.03.2013 was issued to APSFC to deposit workmen portion amount for disbursement of same to workmen. In response, APSFC vide letter dated 23.04.2013 informed that the company was financed in consortium with APIDC who is major shareholder in the consortium and requested to provide the adjudication order of Official Liquidator quantifying the workmen dues. Further a reminder letter dated 02.05.2013 was issued to APSFC advising to deposit workmen portion amount in compliance to the court orders.

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The Official Liquidator also proposes to declare dividend to the entitled creditor of the company (In Liqn.). It is further submitted that out of the amount deposited by the APSFC & APIDC towards workmen portion for a sum of Rs.5,62,000/- and considering the availability of funds to the credit of the company which is Rs.5,62,755/, it is possible to declare dividend @20.50 paise in a rupee which will come to Rs.5,50,092/-. The left over money is need for meeting liquidation expenses.

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The Official Liquidator further submits that Rule 272 of the Companies (Court) Rules, 1959 stipulates that no dividend to the creditor or return of capital to contributories shall be declared by the Official Liquidator without the sanction of this Court and Rule 276 of the said Rules stipulates that the Official Liquidator shall give notice of declaration of dividend not less than one month prior to the date fixed for payment thereof and unless otherwise directed by this Court such notice shall be given by advertisement in Form No.137 in such newspaper as directed by this Court and by sending a pre-paid letter post under certificate of posting a notice in Form No.138 to every person whose name appears in the list of creditors as on such date. Therefore, the Official Liquidator seeks sanction of this Court to declare

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and disburse the dividend amount of Rs.5,50,092/- to 68 workmen of the company (In Liqn.). Official Liquidator also sought for dispensing with publication of dividend notice in newspapers as payment of dividend is proposed only to workmen of company.

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In view of the averments made in the affidavit and in view of the facts and circumstances of this case, this application is allowed as prayed for. However, in case of death of any workmen, the amount can be disbursed to their legal representatives upon furnishing succession certificate and upon furnishing personal indemnity, in terms of Rule 280 of the Companies (Court) Rules 1959.

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_____________________________ A. RAJASHEKER REDDY, J

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Date: 20-10-2014 dv

M/s.Hiflon India Ltd.(In Liqn.) v. -

Case brief

What is this about?

What did the court decide?

M/s.Hiflon India Ltd.(In Liqn.) v. -

Case brief

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What did the court decide?

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