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M/S. Sirsilk Limited (In Liqn.) v. Sirsilk Employees Welfare Association

Telangana HC15 Jun 2016COMPA/122/2016

Case brief

AI extract

What is this about?

This order granted a review application by an Official Liquidator seeking to modify a directive regarding dividend distribution. The court permitted the distribution of available funds at a reduced percentage to workmen while deferring full parity payments pending the realization of proceeds from asset sales.

What did the court decide?

Permitted the Official Liquidator to distribute available funds of Rs.3.98 crores to workmen to reach a total dividend of 57.05% and to withhold payment to casual workers at this stage.

M/S. Sirsilk Limited (In Liqn.) Vs Sirsilk Employees… — Company and Corporate | Telangana HC (2016)

¶1

HON’BLE SRI JUSTICE S.V. BHATT

¶2

COMPANY APPLICATION No.122 OF 2016 IN

¶3

COMPANY APPLICATION Nos.568 & 569 OF 2013 IN COMPANY PETITION No.57 OF 1999

¶4

ORDER:

¶5

Heard Mr.Anil Kumar for petitioner and Mr.Ch.Pushyam Kiran for respondent.

¶6

The petitioner through the instant review company application seeks modification of order dated 12.10.2015 in Company Application Nos.568 and 569 of 2013.

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The operative portion of the order reads as follows:

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‘Admittedly, no other secured creditors in existence are claiming the balance amount of Rs.2.75 crores. Therefore, the least that the Official Liquidator shall do for the present is to ensure that the workmen and the casual workers are also paid at least to the extent of 84.16% of their admitted amounts as was paid to IDBI. Hence, for the present, the Official Liquidator is directed to distribute further amounts to the workmen and casual labourers, on par with IDBI, to the extent of 84.16% of their admitted amounts within four weeks from the date of receipt of a copy of this order. The balance amount payable to the lone secured creditor-IDBI as well as the workmen and casual workers shall be considered after confirmation of sale of the properties of the company (in liquidation).”

¶9

Mr.Anil Kumar appearing for the Official Liquidator submits that at present the Official Liquidator has to the credit of company in liquidation a sum of Rs.3.98 crores. This Court directed payment of dividend on par with IDBI i.e. 84.16%. According to him, with the available funds, it is difficult to pay at 84.16%, but the dividend can be paid as set out in Paragraph 11 of the affidavit filed along with petition. Paragraph 11 of the affidavit reads thus:

¶10

“That in view of the above, if this Hon’ble High Court permits the Official Liquidator to utilize the available amount of Rs.3.98 crores as supra, then the percentage payable to workmen will be @ 15.78% to whom already dividend disbursed @ 41.27% and thus the total dividend disbursed will come to 57.05%. In addition to the above, in respect of 10 workmen, no amount has been disbursed so far and hence, they have to be paid @ 57.05% of their admitted amounts at par with other workmen as against the casual workers who were already paid @ 70.28% of their admitted amount and hence, any payment to the casual workers at this stage may be dispensed with.”

¶11

Having regard to the statement referred to above, the prayer to modify the order dated 12.10.2015 is ordered and the modified order reads thus:

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“Permit the Official Liquidator to utilize the available amount of Rs.3.98 crores to pay the dividend to workmen @ 15.78% to whom already dividend disbursed @ 41.27% and thus the total dividend disbursed will work out to 57.05% and to 10 workmen @ 57.05% to whom no amount has been disbursed so far at par with other workmen as against the causal workers who were already paid @ 70.28% of their admitted amount and hence, any payment to them.

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The Application is ordered. It is needless to observe that the further amounts that are realized by the Official Liquidator from the sale of assets, all steps are taken to ensure to parity of payment of dividend with IDBI.

¶14

S.V.BHATT, J

¶15

Date:15.06.2016 Stp

M/S. Sirsilk Limited (In Liqn.) v. Sirsilk Employees Welfare Association

Case brief

What is this about?

What did the court decide?

M/S. Sirsilk Limited (In Liqn.) v. Sirsilk Employees Welfare Association

Case brief

What is this about?

What did the court decide?

What the court decided

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