TMI Blog1996 (11) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... was created by the company in favour of the applicant and other Financial Institutions, viz., Industrial Credit Invest-ment Corpn. of India Ltd. 'ICICI', Industrial Finance Corporation of India Ltd. 'IFCI' and Industrial Development Bank of India 'IDBI'. Details with regard to credit facilities given to the company by the above named Financial Institutions and the applicant-bank are given in para 6 of the affidavit. It is also stated in the affidavit that the company was in financial difficulties and as it could not pay its dues, winding up petitions were also filed against the company. As the company had become sick industrial company as per provisions of Sick Industrial Companies (Special Provi-sions) Act, 1985, a reference was made to the Board for Industrial and Financial Reconstruction 'BIFR' and ultimately in pursuance of recom-mendation of the BIFR, this Court was pleased to pass winding up order in respect of the company on 27-10-1989. 3. The applicant has submitted that the applicant being one of the secured creditors and as there are certain assets on which charge has been created by the company in favour of the applicant-bank and other Financial Institutions, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that at present the secured creditors are making payment towards insurance premium for insuring assets of the company. It has been submitted by Mr. Desai that approximately Rs. 24,000 are paid every month to watch and ward staff which guards assets of the company. He has further submitted that about Rs. 4 lakhs are paid every year towards insurance premium. The above referred amount is being paid by the secured creditors so as to see that the properties on which charge has been created in that favour are properly guarded and they remain secured. It has thus been submitted by him that approximate- ly Rs. 7 lakhs per annum are being paid for the purpose of protection of the assets of the company. He has submitted that by this time a very huge amount has been spent by the secured creditors and value of assets of the company, other than land, is declining every day. In the circumstances, he has submitted that it would be just and proper to permit the secured creditors to sell the properties on which charge has been created in favour of the creditors. He has also submitted that if the assets of the company are disposed of, not only the secured creditors would get their due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd machineries of the company. 7. The learned advocate Mr. Vasavada has relied upon certain authorities to show that the workmen have a right to participate in the winding up proceedings and they have a right to survive. As the above referred legal position is not disputed either by the Court or by the learned advocate Mr. Desai, I am not referring to those authorities. 8. Mr. Vasavada has also submitted that the applicant-bank and other secured creditors are not prepared to consider problem of the workmen in its proper perspective. He has submitted that disposal of all assets of the company would surely result into permanent unemployment of the workmen unless all assets are purchased by one person for the purpose of restarting the company. According to him, problems of the workmen should be considered with humanitarian approach. He has also submitted that the workmen of the company had tried to see that the company prospers but inspite of their all sincere and serious efforts, the company could not even survive. He has tried to blame the management for the downfall of the company. 9. Mr. Vasavada has also submitted that by permitting the applicant and the secured credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with a proposal to buy all assets of the company so as to start the company. He has also submitted that looking to the obsolete and rusted plant and machineries of the company, it might not be possible for anyone to restart the company. He reiterated the fact that by efflux of time value of the assets would go on declining and as a result thereof not only the secured creditors but the workmen would also suffer. 12. Mr. Desai has also submitted that Textile Labour Association or an individual workman has no right to object to the Judge's summons filed by a secured creditor. He has submitted that when the secured creditor decides to remain outside the winding up proceedings to get his securities realised, it is not open to Mr. Vasavada to object or oppose the application on behalf of the workmen. He has submitted that it is a settled legal position that a secured creditor can remain outside the winding up proceedings and an individual workman or all workmen have no right of whatsoever type to oppose an application made by a secured creditor for sale of his securities. He has submitted that the workmen have a right to get some wages under provisions of section 529 and as per the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of expertise of Shri Dipak Navnitlal. He has given details with regard to experience of Shri Dipak Navnitlal and has also stated that Shri Dipak Navnitlal is also ready and willing to be appointed as a Chairman of the Committee. 14. While concluding, Mr. RM Desai and Mr. Singhi had submitted that in the event of constituting a sale committee, no representative of the workmen should be included in the committee as the Official Liquidator would function as a representative of the workmen as provided in sections 529 and 529A. Looking to the above referred arguments advanced by the concerned counsel and facts and circumstances of the case, I think that it would be in the interest of all the parties to see that the properties of the company are disposed of as soon as possible. 15. The winding up order was passed on 27-10-1989. Nobody has come forward with a proposal to purchase the entire assets of the company with an intention to run the unit. Prima facie it appears that it might not be possible to review the unit. It is pertinent to note that case of the company was referred to the BIFR and the BIFR had opined that the company should be wound up. One must not forget the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etting financial help from the Union of India or from the State of Gujarat has come to an end. Thus, it is clear that the company is not likely to get any financial assistance by way of subsidy or loan from the Government authorities. In the above referred circumstances, when it is not possible to revive the company, the only way out is to complete the winding up proceedings as soon as possible so that the secured creditors, workmen and other persons can get whatever they are entitled to. 17. It is a settled legal position which does not require any elaboration that a secured creditor who is remaining outside the winding up proceedings can get his securities sold so that he can be paid from the sale proceeds. By virtue of provision of section 529 and section 529A, even the workmen will get workmen's portion as calculated as per the said provisions if all the securities are disposed of. 18. Looking to the fact that the Official Liquidator has also to represent the workmen, I do not think it necessary to permit a representative of the workmen to participate in the proceedings which might have to be initiated for selling the securities. In the above referred circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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