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In The Matter Of Sidco Leathers Ltd - COMPANY PETITION No. 14 of 1993 [2007] RD-AH 2845 (21 February 2007)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).


In Chamber


In the matter of

M/s SIDCO LEATHERS LTD (In Liquidation)

Hon'ble Sunil Ambwani, J.

The company (in liquidation) was wound up on 16.10.1993. All the assets were sold. The Official Liquidator invited 'Affidavits of Proof' in support of the claims. The Court declared the dividend and held that once the secured creditors submit proof of their debts, they will be taken to have  joined the winding up proceedings and will receive their share of claim on  prorata basis irrespective of the category of the charge they hold or agreement between them. The order dated 24.5.2002 was upheld in Special Appeal on 4.8.2004. The Supreme Court, deciding the Special Leave Petition  filed by ICICI, set aside the judgments and orders and held that the fact of joining of winding up will not change the priority of the secured creditor,  which is to be determined in accordance with the agreement between them, on priority of charges. The participation in sale proceeding does not amount to relinquishing the security.

The Official Liquidator was directed to re-determine the dividend in  accordance with  the judgment of Hon'ble Supreme Court in Civil Appeal No. 3232 of 2006 in ICICI Bank Ltd vs. Sidco Leathers Ltd, decided on 28.4.2006. The Official Liquidator has submitted his report No. 41 of 2007 with the assistance of the  Settlement Claims Committee, declaring fresh dividend in which the claims of Punjab National Bank, the second charge holder was not considered. The claim of IFCI, ICICI and IDBI all first charge holder and  the claims of the 07 workmen of Rs. 6000/- each total Rs. 42,000/- has been admitted with pari passu deduction  in accordance with Section 529A of the Companies Act, 1956.

In view of the fact that the matter of declaration of dividend is pending for very a long time, the claims are determined in terms of the judgment of Supreme Court. The total amount claimed by workman is only Rs. 42,000/-. No amount is payable to secured creditors holding second charge and unsecured creditors. The Court as such accepts the declaration of final dividend subject to condition that if any objection is made by any workman or any higher amount than the dividend declared is payable to them, the IFCI, ICICI and IDBI will return the amount equal to the claims of such workmen on prorata basis.

Let the dividend be disbursed by the Official Liquidator, and a report be submitted on 14.3.2007. If it is possible, the Official Liquidator will make the disbursement on or before 28.2.2007.

Dt. 21.2.2007



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