Ol Of M/S Khodiyar Pottery Works LTD (In Liqn) vs. Na

Facts

The Official Liquidator (OL) of M/s. Khodiyar Pottery Works Ltd. (in liquidation) filed a report seeking permission to pay outstanding security bills to M/s. Blockade Defence Service, Security Agency. These bills cover the period from January 2020 to April 2022, and further expenses until the disposal of the company's assets. The payment was proposed to be made from the Common Pool fund, subject to adjustment against future realizations from asset sales. The security agency had raised bills based on the minimum wages of Rs. 569/- per day per security guard, as per an order by the Chief Labour Commissioner, New Delhi, with Bhavnagar District falling under Category 'C'. Six security guards were deployed. The OL had previously been permitted to pay a security bill of Rs. 1,12,799/- for December 2019.

Held

The Court allowed the Official Liquidator's report in terms of prayer (A). The reasoning was based on the submission by the learned advocate for the Official Liquidator that M/s. Blockade Defence Service, Security Agency had submitted outstanding security bills for the period from January 2020 to April 2022. These bills were raised as per the minimum wages order dated 23.09.2019 passed by the Office of the Chief Labour Commissioner, New Delhi, applicable to Bhavnagar District (Category 'C'), at the rate of Rs. 569/- per day per security guard, excluding GST. Six security guards were deployed. The Court noted that the security agency was appointed by the Official Liquidator on 04.12.2019 for safeguarding the company's assets, and the submitted bills and statements were duly produced. The Court found it appropriate to permit the payment of these monthly security bills and further expenses from the Common Pool fund, subject to adjustment against the realization of amounts from the sale of the company's assets. No issue was expressly left undecided.

Key Issues

1. Whether the Official Liquidator should be permitted to pay the monthly security bills of M/s. Blockade Defence Service, Security Agency for the period January 2020 to April 2022, and further expenses, from the Common Pool fund of companies in liquidation, subject to adjustment against asset realization. The petitioner, the Official Liquidator, argued that M/s. Blockade Defence Service, Security Agency has submitted outstanding security bills for the period from January 2020 to April 2022. These bills were raised in accordance with the minimum wages order dated 23.09.2019 passed by the Office of the Chief Labour Commissioner, New Delhi, which stipulated a rate of Rs. 569/- per day per security guard for Category 'C' districts like Bhavnagar, excluding GST. Six security guards were deployed. The OL sought permission to pay these bills and further expenses from the Common Pool fund, subject to adjustment against asset sale proceeds. The revenue or State did not present any arguments as it was an Official Liquidator's report seeking court permission.