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2013 (3) TMI 65 - CALCUTTA HIGH COURTWinding up petition - two manufacturing facilities not having functioned for years and its workers and employees imploring for their dues to come out of the assets of the company upon the company being wound up - Held that:- The company admits that there has been no production at its manufacturing facilities at Sahaganj and Ambattur for several years and has been completely closed for more than a year. The company also admits that notwithstanding its settlement with a number of creditors, it is evident that the majority creditors in value press for the company to be wound up. The company’s offer to pay Rs.50 lakh per month to its workers is laced with a condition that it must have a chance to open its manufacturing facilities and the court must facilitate the same. The State Government says that the land which is blocked in the unproductive Sahaganj unit of the company should be freed for industrial activity thereat and the State Government is open to either the company commencing industrial activity thereat or any subsequent purchaser of the company’s assets doing so. It must be recorded that several parleys were held between the representatives of the State Government and the company for opening the Sahaganj unit, but nothing has come of the conciliation proceedings following the company’s staunch refusal to put any concrete proposal on the table for the payment of the workers’ dues. The State Government refers to the affidavit filed in course of the present proceedings saying that its electricity utility has a claim of Rs.11.20 crore in respect of the Sahaganj factory, the West Bengal Development Corporation Limited has a claim of Rs.14 crore, and a sum in excess of Rs.7.95 crore is due by way of land revenue apart from sales tax dues in excess of Rs.40 crore. Also provident fund authorities suggest that a siezable sum in crores is due from the company but quantification of the amount has not been made. The appearing workers of the company that an amount in excess of Rs.46.27 lakh is due from the company as at December 31, 2012. The company suggests that it has reached a settlement with its creditors who had come to court and who have a combined principal claim of about Rs.32 crore. The company has made no attempt to detract from the claims of the various creditors who are represented in court and seek the winding-up of the company. Since the company’s manufacturing facilities are not operational and the company does not demonstrate that they are likely to be opened or any manufacturing activity conducted thereat in the near future, there is no indication of how the massive debts of the company would be met. Despite directions, the annual accounts of the company have not been produced. It must also not be forgotten that the net worth of the company effectively remains negative since it only revalued its assets to create the illusion of a positive net worth on paper to slip out of the BIFR, but there were no profits or share premia to back the apparent improvement in the company’s net worth position. No workmen or employee of the company has appeared to resist the order of winding-up. The conduct of those in management of the company in fraudulently selling off assets conservatively estimated at Rs.2,300 crore makes it just and equitable for the company to be wound up. The company has been unable to show any prospects of it carrying on any business in the near or the distant future. The company’s inability to pay its debts is established and no ground is shown for the company court to exercise its discretion to not wind up the company despite its obvious insolvency. Company Dunlop India Limited is directed to be wound up with immediate effect under the provisions of the Companies Act, 1956. The official liquidator will forthwith take charge of all books, records, documents, assets and transactions of the company, now in liquidation.
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