Karnataka High Court
Ifci Limited vs The Official Liquidator Of on 9 February, 2022
Bench: Alok Aradhe, M.G.S. Kamal
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY 2022
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE M.G.S. KAMAL
O.S.A. NO.22 OF 2016
IN
Co.P. NO.62 OF 1987
BETWEEN:
1. IFCI LIMITED
HAVING ITS REGISTERED OFFICE
AT IFCI TOWER, 61 NEHRU PLACE
NEW DELHI - 110019.
AND ITS REGIONAL OFFICE AT
IFCI BHAWAN, 4TH FLOOR
CUBBONPET MAIN ROAD
N R SQUARE, BANGALORE - 560002
REPRESENTED BY ITS ASST. GENERAL
MANAGER (LAW) MS. YAMINI DAS.
2. INDIAN OVERSEAS BANK LIMITED
HAVING ITS REGISTERED OFFICE
AT 763 ANNASALAI
CHENNAI - 600002
REPRESENTED BY ITS AUTHORISED SIGNATORY
MS. YAMINI DAS.
3. IDBI BANK LIMITED
HAVING ITS REGISTERED OFFICE
AT IDBI TOWER WTC COMPLEX
CUFFE PARADE, COLABA
MUMBAI - 400005.
2
AND ITS SPECIALISED CORPORATE
BRANCH AT 102
SHAKTHI COMFORT TOWERS
K H ROAD, BANGALORE - 560027
REPRESENTED BY ITS AUTHORISED SIGNATORY
MS. YAMINI DAS.
.... APPELLANTS
(BY MR. CHANDRASHEKAR S, ADV., FOR
MR. VIVEK HOLLA, ADV.,)
AND:
1. THE OFFICIAL LIQUIDATOR OF
SPUN SILK INDIA LIMITED (IN LIQUIDATION)
ATTACHED TO THE HIGH COURT OF KARNATAKA
CORPORATE BHAVAN, NO 26-27
12TH FLOOR, RAHEJA TOWERS
M G ROAD, BANGALORE - 560001.
2. RAJAMAHAL SILKS PRIVATE LIMITED
# 48/1, SANJEEVAPPA LANE
AVENUE ROAD CROSS
BANGALORE - 560002
REPRESENTED BY ITS MANAGING DIRECTOR
ASLAM PASHA.
... RESPONDENTS
(BY MR. K.S. MAHADEVAN, ADV., FOR R1
MR. G. KRISHNA MURTHY, SR. COUNSEL FOR
MRS. G.K. BHAVANA, ADV., FOR R2)
---
THIS O.S.A. IS FILED UNDER SEC. 483 OF THE COMPANIES
ACT, 1956 R/W SECTION 4 OF THE KARNATAKA HIGH COURT ACT,
1961, PRAYING TO CALL FOR THE RECORDS PERTAINING TO
Co.P.No.62/1987 ON THE FILE OF THIS HON'BLE COURT & ETC.
3
THIS O.S.A. COMING ON FOR ADMISSION, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal under Section 483 of the Companies Act,
1956 has been filed against the order dated 26.08.2016
passed by Company Judge on OLR No.109/2016 in Co.P
62/1987 filed by the Official Liquidator.
2. Facts leading to filing of this appeal in nutshell
are that the appellants are public sector financial institutions
and are carrying on the business of banking. The appellants
provide credit and other facilities. A company viz., Spun Silk
India Pvt. Ltd. (SSIL) approached the appellant No.1 for
sanction of facilities for its business. Thereupon, the
appellant No.1 sanctioned a Rupee Term Loan of Rs.120
Lakhs, additional Rupee Term Loan of Rs.10 Lakhs and Rs.32
Lakhs. The aforesaid SSIL secured the loan by creating a
deed of hypothecation and created a joint mortgage in
respect of properties run by it. The aforesaid company also
availed loan to the extent of Rs.1,33,83,810/- to appellant
No.2 as well as term loan of Rs.55 Lakhs and additional Term
Loan of Rs.14 Lakhs from respondent No.3.
3. In a company petition, learned Company Judge of
this court by an order dated 02.06.2000 directed SSIL to be
wound up and Official Liquidator attached to this court has
been appointed as Liquidator. The assets of SSIL were sold
by the Official Liquidator in November 2003 for a sum of
Rs.166.13 Lakhs to M/s Rajmahal Silks Pvt. Ltd. (hereinafter
referred to as 'the respondent No.2' for the sake of
convenience). The learned company Judge vide order dated
13.11.2003 accepted the bid of respondent No.2 for a sum of
Rs.1,65,13,000/- and the sale was affirmed. The Official
Liquidator was directed to hand over the possession of the
Company in Liquidation. Thereupon the possession was
handed over to respondent No.2.
4. The aforesaid order passed by the Company
Court was challenged before a Division Bench of this court.
The division Bench of this court by an order dated
28.08.2007 set aside the sale carried out by the Official
Liquidator and requested the learned Company Judge to re
tender the property for sale afresh. The respondent No.2
assailed the aforesaid order in an appeal. The Supreme Court
passed an interim order on 11.02.2016 and directed that the
upset price of the property shall be fixed at Rs.4 Crores and
if the property fetches more than Rs.4 Crores, the amount
already tendered by respondent No.2 along with interest at
the rate of 15% thereon shall be paid to it and the balance
amount shall be retained by the Official Liquidator.
Thereafter, the Special Leave Petition was disposed of by an
order dated 03.05.2016 and it was directed that learned
Single Judge shall take appropriate decision after hearing the
concerned parties and if the property has to be auctioned
again, necessary direction to return the amount to
respondent No.2 shall be issued with adequate interest
thereon so that respondent No.2 can be sufficiently
compensated.
5. The learned Company Judge got the property re
valued and auctioned the sale. The highest bid of Rs.8.80
Crores was received and the sale was affirmed. However,
respondent No.2 was also permitted to submit his claim to
the Official Liquidator and Official Liquidator was directed to
pass orders in respect of adequate compensation payable to
respondent No.2. The respondent No.2 along with a report of
certificate annexed by Chartered Accountant submitted the
claim for an amount of Rs.10,20,24,000/- as refund and
compensation. The Official Liquidator filed OLR No.109/2016,
calculating the compensation by taking into account fixed
deposit rate of interest ranging from 7.5% to 10.25% The
Official Liquidator took note of the fact that respondent No.2
had deposited the amount 13 years ago and stated that
interest at the rate of 8.5% interest compounded annually
can be awarded on the amount. Thus, the Official Liquidator
stated that a sum of Rs.5,54,36,056/- can be awarded to the
respondent No.2 as compensation. The learned Company
Judge by an order dated 26.08.2016 accepted the report and
directed that a sum of Rs.5,54,36,056/- be paid to
respondent No.2.
6. The respondent No.2 filed an application seeking
review of the order and for grant of interest at the rate of
10.8% compounded annually. The appellants filed objections
to the aforesaid review application and categorically stated
that grant of interest at the rate of 8.5% is just and proper.
The aforesaid review petition was dismissed. In the aforesaid
factual background, this appeal has been filed.
7. Learned counsel for the appellants submitted that
the appellants are public sector financial institutions and
grant of interest at the rate of 8.5% is on the higher side. It
is further submitted that the interest should have been
awarded at the rate of 6%. On the other hand, learned
Senior counsel for respondent No.2 submitted that learned
Company Judge has taken a pragmatic view and has directed
interest at the rate of 8.5% interest compounded annually by
adopting an average percentage.
7. We have considered the submissions made on
both sides and have perused the record. Admittedly,
respondent No.2 had deposited a sum of Rs.1,65,13,000/- on
13.11.2003. The Supreme Court by an order dated
03.05.2016 while disposing of the Special Leave Petition held
as under:
We are sure that the learned Single Judge
will consider the fact that the property had been
sold in favour of the present petitioner, namely
M/s Rajmahal Silks Private Limited in 2003. The
amount was paid by the petitioner in 2003 and
the said amount has been deposited with the
Official Liquidator.
In view of the aforesaid facts, the learned
Single Judge shall take appropriate decision after
hearing the concerned parties and if the property
is to be auctioned again, we are sure that he will
give necessary direction for return of the amount
to the petitioner, which has been deposited with
the Official Liquidator, with adequate interest
thereon so that the petitioner may be sufficiently
compensated.
8. Thus, in view of aforesaid order, adequate
interest was to be awarded to respondent No.2. As stated
supra, the amount was deposited by respondent No.2 in the
year 2003. In the absence of any contract, the interest has
to be awarded by taking into account the prime lending rates
of the Banks. It is pertinent to mention here that the prime
lending rate for the year 2003-04 of appellant Nos.1 and 3
respectively was 12.50% and 8.90% respectively. The
Official Liquidator has taken an average and has arrived at a
reasonable figure of 8.5%, which cannot be said to be
excessive.
9. For yet another reason, no interference is called for
in the instant case. It is also pertinent to mention here that
being aggrieved by the grant of interest at the rate of 8.5%,
the respondent No.2 had filed a review petition, in which he
had claimed interest at the rate of 10.80% compounded
annually. The appellants had filed objections in the aforesaid
review petition and had taken a stand as follows:
6. It is pertinent to note that the secured
creditors had objected to the Memo of calculations
filed by the applicant for refund of Rs.1094.13 lac.
The Official Liquidator (hereinafter referred to as
OL) has paid the interest @ 8.50% based on the
logic that it is the Bank rate for FDs. The
applicant has not provided any basis to their
demand of interest @ 10.80%. The maximum
rate for a period of 13 years cannot be accepted
as a premise.
10. It is respectfully submitted that the
learned Single Judge after hearing all the parties
and considering all the orders passed by the
Hon'ble Supreme Court of India has passed the
order dated 29.07.2016. The learned Single Judge
has passed a detailed and speaking order.
Thus, it is evident that having supported the order
passed by the learned Single Judge, the appellants cannot be
permitted to take a different stand cannot be allowed to
approbate and reprobate.
For the aforementioned reasons, we do not find any
merit in this appeal, the same fails and is hereby dismissed.
Sd/-
JUDGE
Sd/-
JUDGE
ss
