Full Text
HIGH COURT OF DELHI
Date of Decision: 29th August, 2023
RE-IN THE MATTER OF KAPRI INTL. PVT. LTD...... Petitioner
Through: Mr. Rajesh Jain, Mr Virag Tiwari and Mr Ramashish, Advocates (M:
9810042928).
Through: Mr. Shlok Chandra, Sr. Standing Counsel for Income Tax Dept.
Along with Mr. Shubhanshu Mishra, Advocate (M: 9958744084).
Mr. Mukesh Kandhari, Director of M/s. Raja Towers Pvt Ltd., Bidder
No. 1 in person Mr. Girdhari Singh, Advocate (M:
JUDGMENT
9871515879) along with Mr. Mahender Chawla, Bidder No. 2 in person. Dr. Amit George, Mr. Rayadurgam Bharat, Mr. Adhishwar Suri, Mr. Shashwat Kabi, Advocates along with Mr. Jyotirmay Nandi in Person (M: 9643484092). Ms. Meenakshi Singh, Adv. for Liquidator with Liquidator in person. CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode. CO.APPL.577/2019
2. This is an application filed by the Liquidator of the company M/s. Kapri International Pvt. Ltd. seeking quashing and setting aside of the order dated 26th February, 2018 passed by the Principal Commissioner, Income Tax under Section 220(2A) of the Income Tax Act, 1961. The case of the Applicant is that the Applicant had applied under the Direct Tax Vivad Se Vishwas Act, 2020 (hereinafter ‘VSV Act’) for resolution of payment of dues with the IT department. However, the same was rejected by the department. The said rejection was challenged by the Petitioner in the W.P.(C) 1163/2021 titled Kapri International Pvt. Ltd. (In Liquidation) v. Commissioner Of Income Tax - IV, New Delhi. The said writ petition was disposed of vide the judgment of the ld. Division Bench dated 5th August, 2022 with the following directions.
3. Ld. counsel for the IT department submits that the reply to the present application has been filed, however, the same is not on record.
4. The order dated 5th August, 2022 is clear to the effect that the CIT has to re-examine and re-assess the declaration by the Petitioner under the VSV Act.
5. Accordingly, it is directed that the CIT shall re-examine/re-assess the Petitioner’s declaration and place on record the order to be passed by the next date of hearing. However, since the Petitioner seeks a hearing in the matter before the IT department, the Petitioner may appear before the concerned authority i.e. the CIT, Delhi on the date fixed by the CIT. The date of hearing before the CIT shall be communicated by Mr. Chandra to Mr. Jain, within one week and the order shall be passed within four weeks thereafter. CO.APPL.1285/2019
6. This is an application filed praying for issuance of no dues certificate from the Uttar Pradesh Financial Corporation (UPFC) as also the rejection of the claim of Rs. 12,06,26,389/-. The reply dated 23rd December, 2019 to this application has already been filed by one Shri Manish Pravir Sahay, Advocate for the Respondent i.e., UPFC. Despite reply having been filed none appears for UPFC.
7. Let court notice be issued to counsel for UPFC on the next date of hearing. The Registry to also issue notice through Email at office@mpsahayadvocate.com, which is reflected as in the reply to the application. If there is no representation for UPFC, the Court would proceed to hear the application. CO.APPL.248/2023
8. In terms of the order dated 27th April, 2023 in CO.APPL.248/2023, the liquidator was allowed to avail the services of Mr. Rajesh Jain, Advocate and was directed to pay a lumpsum fee. The said order reads as under: “2. Considering the above, the application is allowed and the Liquidator is permitted to avail the services of Mr. Rajesh Jain, Advocate. Liquidator shall fix a lumpsum fee to be paid to Mr. Jain and submit a report to that effect. Directions for disbursal of payment shall be issued thereafter.
3. Disposed of.”
9. In terms of the above order, the LIQUIDATOR has fixed a lump sum fee of Rs.[5] lakhs for the professional fees of Mr. Jain. The Liquidator has filed his report dated 22nd August, 2023 wherein it is stated as under: “The CA No.1285/2019 was prepared and filed before this Hon’ble Court, for which valuable assistance was rendered by Mr. Rajesh Jain. For all the work done by him, no fee has been paid to him till now. In CA No.248/2023, permission was also sought to disburse the fee asked by him. Given the services rendered by him so far, the applicant finds that fee of Rs.[5] lakhs as asked by him is justified which deserves to be paid.”
10. In view of the above report, let a sum of Rs.[3] lakhs be released to Mr. Rajesh Jain, Advocate by the Liquidator. The application is disposed of. CO.APPL.1538/2014
11. This is an application filed by the Liquidator for the companies in liquidation i.e., of M/s. Kapri International Pvt. Ltd. and M/s. Dior International Pvt. Ltd. seeking directions against the Commissioner of Customs and Central Excise to accept the amount of Rs.13,40,308/- as full and final settlement of amounts dues towards M/s. Kapri International Pvt. Ltd. and praying for issuance of no dues certificate. This application has been pending for the last nine years. The reply is stated to have been filed by the Excise Department through Mr. Rahul Kaushik, Advocate (M: 9818791820, 9811025595 and email Id: rahul2681@gmail.com & kaushikandassocaites51@gmail.com). However, the said reply is not on record. A copy of the reply has been handed over to the Court during the proceeding. Let steps be taken to bring the same on record before the next date of hearing.
12. Issue Court notice to Mr. Rahul Kaushik, Advocate as also to the Commissioner of Customs and Central Excise through the Assistant Commissioner, Division-III, Ghaziabad, who has deposed in the reply on behalf of the Department.
13. List on 19th December, 2023. If there is no appearance, the Court would proceed to hear the application. CO.APPL.2093/2017
14. This is an application seeking recall of the order dated 17th November, 2017 by which the application being CO.APPL.706/2014 was dismissed in default. The application is allowed and the application CO.APPL.706/2014 is restored. CO.APPL.706/2014
15. This is an application filed by on behalf of workmen by Mr. Rajpal, S/o Fakir Chand for adjudication of the claims of other workmen by the Liquidator. The workmen’s claims were adjudicated vide communication dated 19th February, 2013 and most of the workmen have been paid their respective sums. However, the submission of ld. Counsel for the workmen is that the workmen are entitled for compound interest 12% per annum.
16. Ms. Meenakshi Singh, ld. Counsel for the Liquidator has brought to the notice of the Court Rules 156 & 179 of the Company (Court) Rules,
1959. As per these provisions, it is her submission that the maximum interest that is payable is 4% per annum and that too only if any surplus is left out.
17. In this view of the matter, the interest of 12% as prayed would not be liable to be granted. However, it is made clear that the workmen are free to approach the Liquidator at the time of final disposal and when the liquidation of the company takes place, to see if there is any surplus. In case there is any surplus amount left, then the LIQUIDATOR shall release the amount of 4% per annum simple interest to the workmen, in accordance with law. Application is disposed of. L.R ______2023 in CO.PET.59/1994
18. Vide order dated 27th April, 2023, the Liquidator was directed to take the steps to sell the property of the company in liquidation at Nehru Place. The details of the property are Building No.32-33, Basement Kushal Bazar, Nehru Place, measuring 4116.85 Sq. ft. The sale notice was first published by the Liquidator on 10th July, 2023 in the Nav Bharat Times and Indian Express. The reserve price for the property at Nehru Place was fixed at Rs.4.85 crores. Copy of the sale notice is extracted herein below:
19. Today, bids received by the Liquidator in sealed cover have been produced before the Court. The sealed cover has been opened and it is seen that the following two parties have submitted their bids.
20. In view of the above, clearly, the bids submitted by Mr. Mahender Chawla is the highest bid. Mr. Chawla is, accordingly, declared the successful bidder. In terms of the advertisement, which has been given, the successful bidder shall deposit 25% of the confirmed value of the bid within one week i.e., by seven working days. The said 25% shall be inclusive of sum of Rs.50 lakhs, which has already been submitted by way of Demand Draft. Upon the deposit of 25%, the successful bidder shall deposit the remaining sale consideration within 90 days. After deposit of the entire amount of the bid, let the liquidator hand over possession of the property and also execute the necessary documents including the sale deed in favour of the successful bidder.
21. The other bidder, M/s. Raja Towers Pvt Ltd is represented before this Court by Mr. Mukesh Kandhari, Director of the said Company. The demand draft submitted by the unsuccessful bidder is returned to the Liquidator to complete formalities so that the demand draft can be returned to the unsuccessful bidder. The original demand drafts accompanying the bid letters and the other documents with the bid are handed over to the Liquidator. The DD of the successful bidder may proceed for encashment and for further steps.
22. Liquidator’s report is taken on record and is disposed of. CO.APPL. 762/2018
23. This is a claim filed by one Shri Jyotirmay Nandi, who was working as a Senior Production Manager with M/s. Kapri International Private Limited seeking release of his claims. The primary claim raised by the Applicant is the claim of gratuity and interest thereupon as also claims against the alleged illegal closure of the factory. Details of the claims raised by the Applicant are as under: CLAIM OF GRATUITY
3 Interest U/s 8 of Gratuity Act, 1972 on due gratuity compound interest @20% 48980.00 1990 to 2013 – 23 years Rs. 32,44,796.31 Total - A Rs. 32,44,769.31
CLAIM AGAINST ILLEGAL CLOSURE OF FACTORY
1. 20.11.1975 As on 1st May 1995 - 20 years Last salary Rs.4245/- (As per record of PF Passbook)
2. Retrenchment Damage 15 days per year U/S. 25F/b of the Industrial Disputes Act 10x4245.00 Rs.42,450.00
3. Notice Pay U/S. 25FFF of Industrial 3 x 4245.00 Rs.12,735.00 Disputes Act, 1947
4. Due Salary upto now by the Supreme Court Order dated 17.01.2002 Since 1st May 1995 – 192 months x 4245.00 Rs.8,15,040.00
5. Unpaid Salary January 1992 to 31st May 1992 5 x 4245.00 Rs.21,225.00,
6. Full Salary of employment during February 1990 to 1st May 1995 39x4245.00=165555.00 Rs.1,65,555.00
7. Duo Bonus- 1988 to 1995 7 x 4245.00 @ 8.33% Rs. 29,715.00
8. Earned Leave for 45 days 1.[5] x 4245.00 Rs.6,367.00 Total Rs.10,93,087.00
9. Interest @ 12% on the above amount @ 12% Rs.1,31,170.44 Total- B Rs.12,24,257.44 Grand Total A+B Rs.44,69,053.75 Dr. Amit George, ld. Counsel empanelled with the Delhi High Court Legal Services Committee representing Mr. Nandi, submits that he is entitled to all of the claimed amounts.
24. Insofar as illegal closure of the factory is concerned, in respect of this Company, vide order dated 1st May, 1995 winding up of the company had been directed. Even prior to that, Board for Industrial and Financial Reconstruction (BIFR) had recommended winding up of the Company. Thus, it cannot be held that there was any illegal closure of the factory.
25. In respect of the claim for gratuity, the liquidator had considered the matter vide report dated 25th July, 2014 and had adjudicated the amounts payable to the applicant as under: -
26. As per the above chart, the liquidator accepted the claim to the extent of Rs.1,90,861.73/- as payable the Applicant. Vide order dated 21st May, 2019, the admitted amount has already been released. Thus, the only question as to whether any interest is payable to the gratuity amount of Rs.46,531.73 and if any of the other claims are payable to the Applicant are left open. In fact, the said order dated 21st May, 2019 has kept all the contentions of the Applicant open.
27. A perusal of the claims which are made by the Applicant would show that the Applicant’s claim of retrenchment compensation of Rs.42,450/- is not maintainable considering that the Applicant was designated as a Senior Production Manager and not a workman under the Industrial Disputes Act,
1947. He was in a supervisory/managerial capacity thus, no retrenchment compensation would be liable to be paid as he does not qualify as a `workman’ under the ID Act.
28. Insofar as the salary amounts from May 1995 are concerned, since the Company is already in winding up, the said amount is not liable to be paid. Insofar as unpaid salary from the month of January, 1992 is concerned, the same has been rejected merely on the ground that there is no proof of due salary. This would not be a valid ground to reject the claim.
29. The notice period of three months would not apply in respect of Applicant as he is not a workman under the Industrial Disputes Act, 1947. The earned leave of 45 days has been rejected on the ground that no proof is available to so that the same would be applicable to the Applicant.
30. It is the settled legal position as per Rules 156 and 179, Companies (Court) Rules, 1959 and also the decision of the Supreme Court in judgement dated 18th August, 2023, authored by Justice Sanjiv Khanna in Industrial Development Bank of India (Through Stressed Assets Stabilization Fund Constituted By The Government of India) v. Superintendent of Central Excise and Customs and Others, 2023:INSC:746 that the claim of interest of a creditor is maintainable till the date of passing of the order of winding up and in case there is a surplus after payment of interest, subsequent interest is also payable from the date of the winding-up order.
31. Insofar as unpaid wages are concerned, vide judgement dated 12th September, 2005, of this Court, Argha Sen vs. Interra Information Technologies (India) (P.) Ltd., (2005) ILR 2 Delhi 458, authored by Justice A.K. Sikri, it has been held that unpaid wages of an employee or workman would also constitute a debt and that it would make no difference if the said worker or employee has been terminated or has resigned from service. The said decision was also considered by a Full Bench of the Madhya Pradesh High Court in which vide judgement dated 24th August, 2015 in Jonathan Allen vs. Zoom Developers Private Limited, AIR 2015 MP 152, authored by Justice A.M. Khanwilkar, it has also been held that outstanding or unpaid wages/salary of workman/employee was a debt to be paid by Company and that the workman/employee was a Creditor of Company to extent of his unpaid wages and salary.
32. In the present case, the Applicant has claimed interest on all the above dues @ 12%, however, the same is not held to be payable as the Company is in liquidation and that the order of winding up was passed on 1st May, 1995. Therefore, this claim would also not be tenable as normal interest would be liable to be paid till the date of winding up i.e., 1st May, 1995 and thereafter subsequent interest would be payable @ 4% per annum. The salary shall be released without interest.
33. No other interest would be liable to be granted in terms of the settled legal position.
34. From the above, it is clear that the following claims of the Applicant would be liable to be cleared:i) Interest on gratuity to be calculated @ 10% simple interest per annum till 1st May, 1995 (when the company went into liquidation) and thereafter @ 4% till date the date of release of payment. Therefore, interest on the gratuity amounts shall be paid at the rate of 10% per annum simple interest from 8th July 1992 to 1st May, 1995 and at the rate of 4% per annum from 1st May, 1995 to 31st August, 2023. ii) Interest on unpaid wages/salary from January 1992 to 1st May 1995 now be released – computed with interest @ 10% till 1st May 1995 and thereafter @ 4% simple interest per annum.
35. The above amounts be released by the Liquidator to the Applicant within a period of two weeks. Application is disposed of. CO.APPL. 210/2022 ( for permission)
36. This is an application seeking permission to withdraw the eviction suit i.e., L.E. & C. Suit No. 82/1992 titled M/s. Kapri International Private Limited v. M/s Ashutosh Marine Pvt Ltd. and R.A. DECL. SUIT NO. 1528/1995 titled M/s Ashutosh Marine Pvt Ltd. v. M/s. Kapri International Private Limited which are pending before the Court of Small Causes, Mumbai.
37. These two suits relate to property bearing 123, 12th floor "Atlanta", in Atlanta Premises Co-operative Society Ltd., Bombay Reclamation, Nariman Point, Mumbai- 400 021. The said property has been sold as recorded in the order dated 21st August, 2019 and the deed of transfer is already stated to have been executed with M/s Ashutosh Marine Pvt Ltd.
38. In view of the same, the permission as sought is granted. The Liquidator may withdraw the eviction suit being L.E. & C. Suit No. 82/1992 and give a no objection for allowing withdrawal of being R.A. DECL. SUIT No. 1528/1995 as per the prayer. The application is disposed of. CO.APPL. 441/2022
39. This is an application filed by the liquidation seeking permission to avail the services of Mr. Rajesh Jain. The same has already been considered and allowed. Today, even the part remuneration has also been directed to be paid.
40. The application has, accordingly, become infructuous and is disposed of. CO.APPL. 566/2018, CO.APPL. 907/2018 and CO.APPL. 1253/2018
41. These three applications relate to the property in Nehru Place which was under the occupation of the SBI. The case of the liquidator is that the rent was paid by SBI in April, 2018, however, possession was handed over only in December, 2018.
42. In its reply to CO.APPL. 907/2018 the SBI has stated that three months period got over on 30th April, 2018 and the advance security amount was to be adjusted towards the rent of three months. The remaining amount was also paid through NEFT by the Bank i.e., Rs.5,95,950/-.
43. In view thereof, the bank’s stand is that from April, 2018, the Bank is not in occupation of the property. It is also stated by the Bank that the electricity bills have also been cleared till April 2018.
44. Insofar as maintenance of the property is concerned, the Bank stated that it is agreeable to get the premises cleaned and white washed. However, after having perused the pleadings, this Court is of the opinion that this very property has been put to auction and today, the sale has been finalised in favour of the successful bidder.
45. In this view of the matter, no further orders are called for in these three applications.
46. All the applications are disposed of. CO.APPL. 497/2017 and CO.APPL. 495/2017
47. Ms. Meenakshi, ld. Counsel submits that erroneously, CO.APPL. 496/2017 has been disposed of but CO.APPL. 497/2017 ought to have been disposed of.
48. Accordingly, CO.APPL. 497/2017 is treated as disposed of and CO.APPL. 496/2017 is revived.
49. These two applications relate to revival schemes filed by the Management. They shall be considered after all the creditors are paid.
50. List on 19th December, 2023. CO.APPL. 3826/2015
51. This application also relates to claims of Mr. Jyotirmay Nandi which have already been dealt with and disposed of today. In any event, even the gratuity amount has already been paid.
52. Accordingly, this application no longer survives and is disposed of accordingly. CO.PET. 59/1994 and CO.APPL. 819/2015
53. The liquidator today submits that funds lying with him are to the tune of approximately Rs.[7] crores. Today, the property Nehru Place has been finalised for sale at the sale consideration of Rs.6.17 crores.
54. The Liquidator has also submitted to the Court that most of the workmen who had to be paid are being paid and the other workmen have not come forward. The dominant outstanding claims, if any, today, to be determined are UPFC, Income Tax Department and Excise Department and claims of some workmen.
55. Notice has been issued to the ld. Counsel for the UPFC and ld. Counsel for the Excise Department. Insofar as Income Tax Department is concerned, they have to place on record their decision within a period of six weeks as directed above.
56. Accordingly, list on 19th December, 2023.
PRATHIBA M. SINGH JUDGE AUGUST 29, 2023 mr/am