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Judgment
Heard learned counsel for the appellant.
None has appeared on behalf of the TISCO despite notice.
The order dated 04.05.2018 passed by the learned Company Judge in C.P. No.02 of 1996 (R) is under challenge in this appeal.
The stand of the appellant-Bank of India is that if its stake is liquidated by a third party, herein TISCO, and the Bank is prepared not to make any
claim or stake on the assets of the company in liquidation, that cannot be held to be illegal and the said money received by the Bank from one of the
majority shareholders cannot be directed to be frozen in Escrow Account.
However, in our view, the matter has not been decided finally by the learned Company Judge as a direction was given to the official liquidator to make
a response to the show cause filed by the Bank and the Bank was directed to provide complete statement of claim supported with the copy of
documents etc.
The matter was directed to be listed on 18.05.2018 as an unfixed case so that it could be decided but subsequently, I.A. No.2855 of 2019 was filed by
the Bank for recall of the order dated 04.05.2018. The main grievance of the Bank is that the money, if ordered to be kept in Escrow Account, would
stand frozen and would not be available for the Bank for its purposes.
It appears from the order dated 17.05.2019 passed by learned Company Judge that the order impugned was modified and a direction was given that
the Bank would be entitled to circulate the money for its purposes so that the amount so deposited does not remain frozen and idle but earns interest at
the prescribed rates. However, the order of recall in totality was not found proper in the eye of law but, at the same time, the Bank of India was
granted liberty to make such prayer at the appropriate stage.
In view of the fact that now it is apparent from the above that the money received by the Bank does not stand frozen but liberty has been given to the
Bank to circulate it and earn interest upon it, the apprehension of the appellant is misconceived and since the matter has not been finally decided by
the learned Company Judge and the Bank has been granted liberty to raise such issue at the appropriate stage, this appeal has to fail and, accordingly,
the same is dismissed.