TMI Blog2005 (11) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... rity and the appellate authority allowed the appeal directing the RBI to re-open the application and consider the case afresh. Thereafter, the RBI carried out inspection of the company under section 45N of the RBI Act to ascertain the financial position of the company as on 31-3-1999. This inspection went on from 4-10-1999 to 9-10-1999. According to the RBI, during the inspection large scale intermingling of assets and liabilities of the companies in the group were revealed and, therefore, the RBI considered it necessary to inspect the books of account of other group companies, namely, Al-Falah Invest-ment Ltd. Inspection of this company also revealed serious irregularities such as acceptance of deposits by Al-Falah Finlease Ltd. and peculiar methods adopted by the company for unauthorised conversion of the same into shares, bouncing of large number of cheques, diversion of funds to group concerns, etc., against the interest of the depositors. After issuing show-cause notice and eliciting reply, the application for registration was again rejected on 16-2-2000. A few days before that two directors of the company were arrested by the Economic Offence Wing of the Crime Branch, Delhi P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising and representing the investors, depositors, creditors, etc., in various cases. It is also averred that he took stock of various assets, both movable and immovable, which stood illegally captured and usurped by anti-social elements while he was in jail and one such property was the housing complex located at GH-01, Alfa Sector, Greater Noida admeasuring 10,000 sq. meters allotted by Greater Noida Authority to M/s. Al-Falah Sahakari Awaas Samiti Ltd. Hundred flats were constructed over this plot of land by M/s. Al-Falah Developers Ltd. It is submitted that Mr. Sayed Manzoor Hassan Zaidi, representing as President of Al-Falah Sahakari Awaas Samiti Ltd. and Mr. S.P. Yadav representing as Secretary of M/s. Al-Falah Sahakari Awaas Samiti Ltd. have entered into an agreement dated 3-9-2004, with M/s. Al-Falah Developers Ltd. and M/s. Al-Falah Investment Ltd. both being represented by Mr. J.A. Siddiqui. Under the said agreement (Annexure D), following payments are to be received : I.A sum of Rs. 50 lakhs has already been received and kept in the court of Sh. Digvinay Singh, M.M., Patiala House, New Delhi. II.A further sum of Rs. 2.26 crores would be payable on or around 30-11-2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits from hundreds of depositors and substantial amount is to be paid to those depositors which the respondent-company is unable to pay and prayer for winding up of the respondent-company is made on this ground as well. Vide order dated 20-7-2000, the Official Liquidator was appointed as the provisional liquidator. The company has filed reply thereafter and contested this petition. During the pendency of these proceedings, ex-director of the respondent-company filed application proposing scheme of arrangement/revival. The application with which we are concerned today is C.A. No. 1365 of 2004. In this application the applicant has given two lists as Annexures A and B. Annexure A contains names of 647 persons whose claims were settled in full and final uptil 28-1-2000, the date when directors of the respondent-company were arrested by the Economic Offence Wing of the Crime Branch, Delhi. Annexure B is the list of 158 investors/shareholders whose claims have been settled after 17-2-2004, i.e., after the release of the applicant Jawed Ahmed Siddiqui, chairman of the respondent-company. As per these annexures a sum of Rs. 1,22,26,191.50 and Rs. 1,56,15,500 respectively have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court of Shri Digvinay Singh, Metropolitan Magistrate, Patiala House Court, New Delhi; list of all those shareholders, investors/creditors whose claims have yet to be settled; steps taken by the learned Metropolitan Magistrate in this behalf and the present status of proceedings before the learned Metropolitan Magistrate. The applicant in the affidavit shall also explain the circumstances under which payment was so deposited is made to the shareholders/depositors of respondent-company, namely, Al-Falah Finlease Ltd., as under the agreement, the second party had to make this payment to Al-Falah Developers Ltd. and Al-Falah Investment Ltd. The applicant shall without prejudice to its rights and contentions give the details of creditors/shareholders of Al-Falah Developers Ltd. and Al-Falah Investment Ltd. The affidavit shall be filed within three weeks, as prayed. List for further arguments on May 10, 2005." 5. There applicant thereafter filed the affidavit and on the next hearing held on 10-5-2005, the following order was passed : "10-5-2005 : Present : Mr. R.N. Trivedi, senior advocate, with Ms. Manisha Singh and Mr. Ramesh Babu, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the claims settled before the Metropolitan Magistrate, money is paid to all such persons and their purported shareholding purchased by the applicant. The position which emerges today is that there are no claims and no "depositors" remain unpaid. 8. In this backdrop it is to be decided as to whether order of appointment of provisional liquidator is to be recalled. In the order dated 5-4-2005, which has already been reproduced, it has been noted that the winding up petition is primarily on two grounds, one of the grounds, namely, inability to pay the debt ceases to exist as all the "depositors/claimants" have been paid. However, other ground which is primarily clauses ( b ) and ( c ) of sub-section (1) of section 45MC still remains. In another case [C.A. (M) No. 133 of 2005 JVG Leasing Ltd., In re [2008] 144 Comp. Cas. 780 (Delhi) decided by me on 25-11-2005] I have held that normally when a company is wound up on any of these grounds, it would not be permissible to file a scheme for arrangement and such company should be wound up if grounds contained in clause ( b ), ( c ) or ( d ) of sub-section (1) of section 45MC is satisfied. As a corollary, if this ground exists, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion as to whether the petition is to be dismissed or the company is to be wound up. No doubt, the RBI is seeking winding up of the respondent-company on the ground mentioned in clauses ( b ) and ( c ) of sub-section (1) of section 45MC. However, the court has yet to consider this aspect and both the parties are yet to be heard. At this stage, therefore, it is permissible for the respondent to resist the winding up of the company and defend the petition contending that the aforesaid grounds on which the petition is filed are not satisfied. At that stage it would also be permissible for the respondent to argue that since all the claims are settled and there are no creditors who are to be paid, the winding up orders be not passed. However, the order of appointment of provisional liquidator cannot be recalled at this stage as the main ground for recall is the settlement with the depositors/claimants, whereas the petition is founded on another ground also. It is only when, and if at all, the respondent is able to satisfy that the other ground on which the petition is filed is not satisfied that the court may reject the petition and recall the order of winding up. This appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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