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TMI Blog2010 (1) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... C.A. No. 27 of 2008 that upon nationalisation the jute division of Birds and Company P. Ltd., was renamed National Jute Manufacturers Corporation Ltd. The engineering division of Birds and Company P. Ltd., was renamed Bharat Process and Mechanical Engineers Ltd. It further appears from the said affidavit that Heilgers P. Ltd. had business ties with Birds Company P. Ltd., prior to its nationalisation. After nationalisation the business which Birds and Company P. Ltd., carried on in combination with the said Heilgers P. Ltd., is alleged to have been assigned to the said Heilgers P. Ltd., and in that view of the matter the latter continued and still continues to use a portion of the registered office of Bharat Process and Mechanical Engineers Ltd. 2. The holding company Birds Jute and Exports Ltd., was also nationalised and the same is now a subsidiary of National Jute Manufacturers Corporation Ltd., as would appear from an affidavit affirmed on April 28, 2006, by one Shri Pratyush Kumar Mitra in C.A. No. 283 of 2006. The said holding company, namely, Birds Jute and Exports Ltd., is now a sick company and is under the BIFR. Bharat Process and Mechanical Engineers Ltd. (hereinafter r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the lessee to respectable and responsible tenants approved in writing by the lessor." The lease originally was for a period of 5 years and a further lease for 5 years was executed and registered on December 8, 1962. The company in liquidation admittedly is a monthly tenant on conditions governed by the registered document dated December 8, 1962. Therefore, the provisions of rent control legislation would apply to this tenancy which is thus protected under the rent control legislation. The rate of built up are a in the Netaji Subhash Road at a very conservative estimate of which I can take judicial notice, is not less than Rs. 20,000 per sq. ft. of actual carpet area. The measurement of the registered office of the company in liquidation is not available from the records made available to me but there can be no doubt that this office is also a very valuable property worth several crores. (c) The plant and machinery of the company in liquidation have been valued by engineers and valuers' collaboration at Rs. 40.81 crores in their report annexed to their letter dated October 27, 2008, a copy whereof is a part of annexure E to the affidavit affirmed by Shri Paresh Chandra Roy a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t total dues with regard to workers are Rs. 313 lakhs. On the other hand, from the report submitted by the official liquidator, it appears that retirement suspense is an amount of Rs. 73,71,690. So as far as the Government is concerned, there is no amount due in respect of the said head because of the fact all workers have been paid before the liquidation of BPMEL." The aforesaid case of the holding company has to be read in the light of the following observation made in the order dated July 27, 2004, passed by brother A.K. Banerjee J. finally winding up the company in BIFR Case No. 520 of 1992. "The BIFR has already recommended for winding up. All the workers except 54 workers have accepted voluntary retirement. The issue of voluntary retirement scheme relating to 54 workers was dealt with by this court as well as by the court of appeal. Ultimately, the said issue is pending before the hon'ble Supreme Court." (E) There is no information available to this court as regards the actual dues of the unsecured creditors. (F) From annexure E appearing at page 63 of the affidavit affirmed by Shri Pratyush Kumar Mitra on April 26, 2006, on behalf of the Birds Jute and Exports P. Ltd., i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully described in annexure 'K' to the affidavit in support of the judge's summons situated at premises No. 200 Dakshin Dari Road, Kolkata-700 048 ; Injunction restraining the official liquidator from dealing with or disposing of or in any manner encumbering of the properties any of the properties mentioned in paragraph 14 of the affidavit in support of the judge's summons situated at premises No. 200, Dakshin Dari Road, Kolkata-700 048 ; Injunction restraining the official liquidator from giving any effect or further effect to the sale notice to the extent it includes the properties mentioned in paragraph 14 of the affidavit in support of the judge's summons ; Direction upon the official liquidator to exclude from the description of the properties enclosed with the sale notice, those items mentioned in paragraph 14 above of the affidavit in support of the judge's summons;" (2) By a judge's summon dated August 20, 2007, an application registered as C.A. No. 641 of 2007 was made by the Eastern Security Services Company praying, inter alia, for the following reliefs : "The official liquidator be directed to clear the dues of the applicant being the balance sum of Rs. 78,960 tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n;" (5) By a judge's summon dated April 17, 2008, taken out by Dipayan Chowdhury, learned advocate on behalf of the Sramik Union of the company in liquidation and one Jamilur Rehaman Khan an application registered as C. A. No. 291 of 2008 was made praying, inter alia, for the following reliefs : "The scheme proposed by respondent No. 4 and annexed as annexure G to the affidavit in support of the judge's summons be approved by this hon'ble court ; Appropriate directions be given to implement the proposed scheme being annexure G to the affidavit; Stay of all further proceedings for winding up of Bharat Process and Mechanical Engineers Ltd. (in liquidation) ; Stay of the operation of the order dated July 27, 2004, passed by the hon'ble Justice Ashim Kumar Banerjee in BIFR Case No. 520 of 1992 ; Direction upon respondent No. 1 to hand over the assets and properties of the company (in liquidation) to respondent No. 4 for the purpose of implementation for the said scheme ;" (6) By a judge's summon dated April 16, 2008, taken out by Shiv Chandra Prasad, advocate, on behalf of the Regional Provident Fund Com missioner, West Bengal, an application registered as C. A. No. 299 of 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the company in one manner or the other. The pendency of these three applications has been a major stumbling block why the assets of the company in liquidation could not be sold so far. The resultant effect has been that the creditors have been kept at bay and expenses in the nature of guarding expenditure has been continuously incurred and the machinery is also deteriorating from day-to-day. I have therefore to consider these three applications on the merits which I propose to do hereafter. C.A. No. 272 of 2008 7. The applicant in this case is Consortium Enterprises P. Ltd. The proposal of the applicant to be found in paragraph 9 of the application reads as follows : "(a) The applicant-company would employ all the workers of the company (in liqn.) ; (b) The applicant-company would not bear any liability of secured or unsecured creditor ; (c) The applicant would pay the past dues of the workers as per direction of this hon'ble court ; (d) The applicant-company would not pay any statutory dues of the company (in liqn.) ; (e) The applicant-company would not pay any past outstanding dues of the company in liquidation ; (f) The applicant-company would initially invest Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey propose to pay a sum of Rs. 60 lakhs to the UCO Bank. They propose to pay 15 per cent. of the dues of the statutory creditors over a period of three years. As regards the balance there is no indication. With respect to unsecured creditors they propose to pay 10 per cent. of the principal dues over a period of 4 years subject to scrutiny. As regards the balance there is no commitment. They want to purchase the shares of the holding company at the rate of Re. 1 per share which the holding company is not inclined to sell as already indicated. They want renewal of the lease of 7,50,000 sq.ft. of the land of the factory premises for the purpose of carrying on business activity. There is a recital in the scheme that all the 57 ex-employees shall be provided with work and if any one of them is not in a position to work his dependent shall be given work but no such obligation has been envisaged in the scheme. 11. The law on the subject was elaborately discussed by this court in the case of Mahavir Prasad Agarwalla v. Ashkaran Chattar Singh reported in [1985] CWS 557, wherein after considering the English and Indian authorities the following view was expressed : "Therefore, from the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewed in the light of the law laid down by this court as also by the Supreme Court it is more than clear that neither of the schemes propounded and discussed above is acceptable. There is no proposal to pay up the dues of the creditors in full. The schemes propounded by each of the three applicants discussed above is really intended to take away the fruits of the winding up. The official liquidator in his affidavit affirmed by Sanjay Chatterjee on January 21, 2009, in C.A. No. 620 of 2008 has suggested that "the alleged scheme for revival is vague and has been prepared and prayed for sanction for grabbing the entire property of the company in liquidation". I am inclined to think that this comment is a well considered one and applies to each one of the three applicants for revival of the company in liquidation. By reason of these applications the winding up process has been delayed and lakhs and lakhs of rupees have been wasted in guarding the properties which have also deteriorated both in value and efficiency over the period of time. 14. In so far as the employees of the company are concerned it appears from an affidavit of Shri S.N. Mukherjee in C.A. No. 291 of 2008 quoted above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court afford to be harsh to the workers of the lessor in order to be kind to the workers of the lessee. The court acting as the parens patriae is concerned about the welfare of everyone. The court cannot discriminate between the workers of the lessee and the workers of the lessor. 16. I cannot but observe that the UCO Bank, a nationalised bank, has acted in a most irresponsible manner by encouraging the applicants for revival in this case. Being a nationalised bank it was expected to protect the interest of the nation rather than seeking to benefit the private individual. This is precisely what they did when they affirmed an affidavit supporting one of such applicants for revival for a sum of Rs. 50 lakhs. The loss to be incurred by the nationalised bank in the ultimate analysis falls on the nation. If the lessor a nationalised company is to be denuded of its worth represented by the land in question, the only one who shall be the loser is the nation. Therefore the interest of the nation should have been taken into consideration by them which they did not and I hope that the authorities of the UCO Bank shall take up the matter very seriously and proceed against the erring officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual users thereof and not as scrap. In that event the plant and machinery is likely to fetch a handsome amount which will be enough to liquidate the dues of the company in liquidation substantially if not in full. Such sale can be made by private negotiation subject to confirmation of the court. The valuation in that regard has already been indicated herein. No further valuation thereof at this stage is necessary. The official liquidator shall be at liberty to appoint an agent for the purpose of procuring appropriate buyers at a commission to be settled by the court. M/s. Engineers and Valuers collaboration referred to hereinabove should also be contacted for this purpose. The applicant who is the lessor in this case is also expected to render adequate assistance to the official liquidator in finding an appropriate buyer so that the plant and machinery can be sold at an appropriate price for the benefit of all the creditors of the company in liquidation. This application is thus disposed of. There shall be no order as to costs. 19. Urgent xerox certified copy of this judgment, be delivered to the learned advocates of the parties, if applied for, upon compliance of all formalities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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