TMI Blog2013 (7) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and pointed out that it is not possible to seek sanction or approval for the transfer of mining and prospecting licence and that the shareholders of both companies having decided not to give effect to or implement the scheme, but to continue the existence of both transferor companies, that the request as made can be granted. At the same time, it must be clarified that neither the sanction or approval in terms of the earlier order nor the recall by this order shall in any manner adversely affect or prejudice the claim of the State Trading Corporation of India nor shall if affect its right to seek winding up of the 1st transferor company or to take such proceedings against it as are permissible in law. Thus the order sanctioning th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iron granted by the respective Ministry of Government. It is stated that the coal and iron is the basic raw material of the transferor company without which they cannot carryout manufacturing activities. The management of the transferor as well as transferee company tried to obtain opinion of experts on the point whether mining and prospecting licence for coal and iron can stand transfered in favour of the transferee company or not. The opinion in that behalf is unclear and conflicting and, therefore, if mining licence held by the transferor cannot be transfered, then, the amalgamating companies do not want to jeoparadise the interest of their share holders and creditors. If the Government does not transfer the mining or prospecting licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 391 to 394 of the Companies Act, 1956 do not in any manner prevent exercise or limit the inherent powers of this Court. If there is nothing contrary or conflicting, then, this Court can exercise these inherent powers. As a matter of caution, the further affidavit would indicate that even the shareholders have met and resolved that the scheme may not be given effect to. It is in these circumstances, that the order is sought to be recalled. 4} The request is opposed by the sole objector, viz., State Trading Corporation of India Ltd. It is contended on their behalf by Mr.Choudhary, learned senior counsel, that this application is not maintainable. Reliance is placed on section 392 of the Companies Act, 1956, to urge that once the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wal from the scheme but seeking to recall the order of this court which itself is obtained by practising fraud. For all these reasons, this application be dismissed. 5} Although, reliance is placed by Mr.Tulzapurkar upon a decision of the learned single Judge of the Karanataka High Court in the case of G.T.Swamy Anr Vs. Goodluck Agencies Anr reported in 1990 Vol.69 Company Cases 819, that was in the context of recall of winding up order. There, recall was sought by resorting to Rule 6 and Rule 9 of the Company Court Rules, 1959. In the instant case, a scheme seeking sanction under sections 391 to 394 of the Companies Act, 1956 was presented to this Court. It was stated that the transferor companies are wholly owned subsidiaries of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of no effect. So far there is no dispute. However, the companies can only pass resolutions recalling the schemes. They cannot recall orders of the Court sanctioning the scheme. Thus, once there is an order of this Court sanctioning the scheme and unless it is demonstrated that this order has been implemented and carried into effect, the request as made cannot be refused. What has been argued before me by Mr.Chaudhari for STC is that section 391 of the Companies Act, 1956 permits this Court to sanction the compromise or agreement as proposed within the meaning of the said provision. Sub-section (2) of section 391 envisages sanction and thereafter sub-section (3) states that the order made under subsection (2) shall have no effect until the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exercised. In the instant case, the scheme has not been put into effect. It is not the case of the State Trading Corporation of India that any time after the order dated 1st July 2011, the applicants have taken the requisite steps so as to give effect to and implement the scheme. In such circumstances, to my mind, the objection of Mr.Choudhary in the peculiar facts of this case and his reliance upon section 392(2) cannot be accepted. 7} Once there is nothing in the scheme or in the sections empowering the Court to grant or approve it not to recall an order, then, by exercise of inherent powers of this Court and in the facts peculiar to this case, the recall can be permitted. Without laying down any general rule or deciding any wider con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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