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TMI Blog2010 (3) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... teel Corporation, a partnership firm, under the provisions of the Companies Act, 1956, for winding up, alleging that the company had failed and neglected in paying Rs. 77,054.72 to the petitioner. The court vide its order dated August 16, 1976 (Coram : D.A. Desai J. (as he then was)) admitted and ordered issuing of advertisement. On November 22, 1976, the court ordered winding up of the company and appointed the official liquidator as the liquidator of the company for taking charge of the properties and assets of the company. On issuance of notification dated November 23, 1976, the official liquidator took charge of the assets of the company. 3. The applicant has further stated in his affidavit in support of the judge's summons that the company was in the business of electrical transformers. The company is a private limited company consisting of four shareholders of his family and friend. The plant and machinery of the company were situated at plot adjoining Shed No. A2/14, GIDC, Phase I, Vapi, District Bulsar, Gujarat. The company had availed of term loan and cash credit facilities from the State Bank of India. The bank filed Special Civil Suit No. 68 of 1976 in the Court of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw the winding up petition. Their letter dated May 12, 2009, is also placed on record at annexure D to the application. 8. The applicant has further stated in his affidavit in support of the judge's summons that pursuant to negotiations, Pegasus has also agreed to accept Rs. 70,00,000 (rupees seventy lakhs only) in full and final settlement of claims and counter claims between the State Bank of India and the company, its directors/guarantors. A copy of letter dated April 29, 2009, issued by Pegasus accepting the offer of Rs. 70,00,000 as full and final settlement is also placed on record at annexure E on this application. 9. The applicant has further stated in his affidavit in support of the judge's summons that apart from the aforesaid creditors for a sum of Rs. 14,43,434 there are no other creditors of the company. He himself being the creditor of the company for a sum of Rs. 14,42,074 out of the aforesaid sum of total creditors of Rs. 14,43,434. The balance of creditors amounts to only Rs.1,360 he has assured that the same would be discharged. The company does not have any other liability. In view of these circumstances the order of winding up is prayed to be recalled. 10. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled and would be immediately paid on the revival of the company or as may be ordered by the court. (b)The unsecured debt of the applicant in his capacity as director and shareholder of the company is Rs. 2,30,441 and the unsecured debt of the applicant in his capacity as proprietor of M/s. Asian Transformers is Rs. 14,19,274. (c)The applicant has undertaken not to press for recovery of any amount due to him in any capacity from the company. (d)The dues of the company towards the petitioner Suresh Steel Corporation (Rs. 77,054.72) have already been paid. (e)The remaining dues of the company are Rs. 35,032.28 and Rs.61,863. No person has come forward to claim the same. However the applicant undertakes the same would be paid by the company in case any one comes forward to claim the same. 14. Learned counsel has submitted that in view of the above said facts there would be no secured or unsecured debts of the company, except to the extent stated above and for which also settlement is made or undertaking is given. 15. It is further submitted that no claim has been made by any worker or creditor since the last 33 years. M/s. Ambubhai and Diwanji Solicitors of the applicant had pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be discharged through the company. 17. In view of above said facts, learned counsel for the applicant has submitted that the order of winding up dated November 22, 1976, passed by this court in Petition No. 34 of 1976 be recalled, and the company M/s. Asian Transformers Export P. Ltd., be ordered to be revived and the official liquidator be directed to hand over possession of all the assets of the company, including the amount realised by the official liquidator on sale of part of assets of the company. 18. Shri J.S. Yadav, learned counsel representing the official liquidator has contested the company application and submitted that the applicant is now aged 67 years and has filed this application for recall of the order of winding up after 33 years as the winding up order was passed on November 22, 1976. He submitted that on account of such delay and also on the fact that the order of winding up did not suffer from any illegality, the same cannot be recalled. 19. The learned advocate Shri Yadav for the official liquidator has further submitted that the applicant has submitted the present application mainly on the basis of settlement of dues of the known creditors like the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 2000 and in view of this, no premium can be given to the applicant to ignore the procedure, rules and the law. 22. Shri Yadav has further submitted that as per the records of the official liquidator the debts are assigned to ARCIL, a securitisation company. Under the Act recall of winding up order therefore will not be a proper procedure but the applicant should have moved a scheme of reconstruction/revival under section 391 of the Companies Act, 1956, which would have been a proper procedure and competent way. The applicant will not have any strength, power to oppose ARCIL's powers under the Securitisation Act which in case prevails over the Companies Act, 1956. Further, the memorandum of understanding executed by the ex-director of the company, who is the present applicant, with ARCIL has no legal strength. 23. It is further submitted that without inviting claim by public advertisement, it is not possible to ascertain and agree that the ARCIL is a secured creditor and it is having a valid payable claim and further the assignment executed to ARCIL by the State Bank of India is valid one. He has stated that in the eye of law ARCIL is the party/beneficiary in the case wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Transformers were taken by the official liquidator on January 24, 1977 and February 4, 1978, along with the assets. (e)Representative of Pegasus approached the applicant-company in June, 2008 claiming that Pegasus is the holder of special power of attorney of the ARCIL and after negotiations Pegasus confirmed the amount due which they were ready to accept in full and final settlement. (f)Company Application No. 225 of 2009 is filed in Company Petition No. 34 of 1976 by Niranjan B. Shah seeking recall of the winding up order dated November 23, 1976, passed in Company Petition No. 34 of 1976. (g)On May 15, 2009, this court (Coram : K. A. Puj J.) passed an order for inviting objections against the proposed revival of the company as prayed for in this application. (h)The applicant issued advertisement in The Times of India, Ahmedabad edition dated May 23, 2009 and in Gujarat Mitra, Surat edition dated May 23, 2009, inviting objections to the revival of the company. No one has filed any objection or made any claim. (i)Pursuant to the advertisement released on May 23, 2009, in The Times of India and Gujarat Mitra inviting objections to revival of the company, no one has filed any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the public against proposed revival. The applicant cannot seek revival without resorting to the provisions of section 391 of the Companies Act, 1956, the applicant has to resort to section 391 of the Act for seeking such prayer. When statutory remedy is available no inherent powers could be exercised by the court. These contentions of the official liquidator are required to be examined in light of the development since the order of winding up was passed, i.e., from November 22, 1976, till date. The official liquidator and all the concerned should be conscious of their obligations under the law. It is a fact that till the application was filed no dues were paid to the secured creditors or unsecured creditors. As per the submission of the official liquidator even claims were not invited. In such a situation when as per the say of the applicant and as it has come on record, when only one secured creditor is there and when its getting its dues as could be seen from the proceedings and when the applicant has shown willingness to file appropriate undertaking that the company would honour all legally admissible claims and when sizeable amount is agreed to be deposited in scheduled b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers, or all the members of the class, as the case may be, and also on the company, or in the case of a company which is being wound up, on the liquidator and contributories of the company : Provided that no order sanctioning any compromise or arrangement shall be made by the Tribunal unless the Tribunal is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the Tribunal, by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under sections 235 to 251, and the like. (3) An order made by the Tribunal under sub-section (2) shall have no effect until a certified copy of the order has been filed with the Registrar. (4) A copy of every such order shall be annexed to every copy of the memorandum of the company issued after the certified copy of the order has been filed as aforesaid, or in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Halsbury's Laws of England. No doubt, in those authorities, we do not find any cases relating to the power of the company court in England to recall the order of winding up. In Halsbury's Law of England, volume 7, in paragraph 1375, it is observed as follows : 'Power to stay winding up proceedings. - The court may, at any time after an order for winding up, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as it thinks fit, on the application either of the liquidator or the official receiver or of any creditor or contributory, and on proof to its satisfaction that all proceedings in relation to the winding up ought to be stayed. On any application, the court may, before making the order, require the official receiver to furnish to the court a report with respect to any facts or matters which are, in his opinion, relevant to the application. The validity of the winding up order cannot be questioned on such an application. The order to stay may reserve liberty to any dissentient creditor or the official receiver to apply within a limited time to remove the stay. If no creditor objects, the proceedings on a compulsory orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the applicant in respect of the company's creditors or claimants and the assurance to honour the legitimate claims of any other claimant or creditors and willingness to keep aside a sum to meet with such claims, militate against the plea of the official liquidator for rejecting the application only on the ground of applicant's non resorting to section 391 and invoking powers for recalling the winding up order. 33. At the same time this court needs to be mindful of the fact that while recalling of the order of winding up and permitting the applicant to revive the company the claimants and creditors, if any, whose interest is likely to be affected on account of such recalling needs to be safeguarded adequately. The effect of recalling of order of winding up need not result into absolving the company or its directors of any of their statutory and other liabilities nor is it to result into depriving any creditor or claimant from pressing and realising his legitimate legally admissible claim and dues. The court shall have to make appropriate observations and provide appropriate safeguards in the order itself. Counsel for the applicant have under the instructions of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and admissible debt against the company would be honoured and the court may order deducting of an amount that may be deemed fit and proper by the court, from the aforesaid amount of Rs. 27,27,960 plus accrued interest thereon after the official liquidator's deduction of its expenses so far incurred, to be deposited in the scheduled bank for a period of 3 years so that the same may earn interest, and out of said amount if any creditor or claimant comes forward for admissible claim then the same should be met out of that. Independent of this amount also, the creditor, if any, lodges claim directly with the company and if it is admissible in law, the same will be honoured. This undertaking may be ordered to be filed within a period of one week after a copy of the order is received. 39. This court, in view of the aforesaid facts and circumstances, is of the opinion that the application deserves to be allowed and the order of winding up deserves to be recalled on issuance of proper and adequate safeguards in the interest of creditors and claimant if any. This court is of the view that the official liquidator shall issue appropriate advertisement in two languages namely in English and G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee cheque to the applicant for the company. (c)The applicant shall file an undertaking to this court within a week from the receipt of the order that : (1)He has given up his claim to recover any outstanding claim and dues from the company in any capacities and hereafter he or his legal heirs, and assignees shall have no right or entitlement to recover any past dues, amount or past claim from the company on its revival. (2)All legally admissible claims if made against the company then the same would be accepted and fulfilled by the company or even from the assets of the company as legally admissible claim of any creditor or claimant cannot be prejudiced in any manner on account of the recalling of the winding up order. (3)The creditor or claimant against the company shall also have right to move this court for realising his or her legally admissible claim and dues from the amount ordered to be placed into fixed deposit by the court under this order. If such claims or dues are paid then the company, its assignees or the applicant shall have no objection and to that extent the deposit amount will get reduced and in turn the company will receive only the remaining amount of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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