Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Tata Capital Financial Services Ltd. and others Versus M/s Elder Pharmaceuticals Ltd.

2015 (10) TMI 543 - BOMBAY HIGH COURT

Approval for Petition of Winding Up under Section 433 & 434 – Petitioner contends that Respondent committed a default in payment of its instalment and other debenture holders – Further contended that notice of Petitioner was cryptically replied by a bare denial of liability and as such Petitioner finds no concrete plan for payment of liabilities – Respondent contested that winding up petition against a company, which is in temporary financial difficulties, ought not to be admitted – Further held .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ral critical unexplained financial matters - Company petitions are admitted and Respondent is restrained by a temporary order and injunction from disposing of any of its assets and properties or creating any third party rights otherwise than in due course of its business - The Respondent Company is directed to place on record the latest financials of the Company – Allowed and decided in favour of the Petitioner. - Company Petition No.961 of 2014 With Company Application No. 294 OF 2015 With Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

With Company Petition No.47 of 2015 With Company Petition No.112 of 2015 With Company Petition No.136 of 2015 With Company Petition No.177 of 2015 With Company Petition No.178 of 2015 With Company Petition No.235 of 2015 With Company Petition No.312 of 2015 With Company Petition No.378 of 2015 With Company Petition No.417 of 2015 With Company Petition No.768 of 2015 With Company Application No. 626 of 2015 For the Petitioner : Mr. Aziz Khan with Mr. Swarup Patil i/b. M/s.Divya Shah Associates , .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ave i/b. M/s.Mansukhlal Hiralal & Co. For the Respondent : Mr. Ali Abbas Delhiwala with Ms.Nidhi Singh i/b. Joy Legal Consultants ORDER : These twenty four petitions seek winding up of the Respondent Company on the ground of inability to pay its debts under Sections 433 and 434 of the Companies Act, 1956 ( the Act ). A brief statement of the respective claims in the petitions, which are not contested seriously on merits, may be noted as follows, before we consider the common defence to these .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enure of the NCDs was 5 years from the deemed date of allotment, i.e. 23 December 2010. The NCDs were to be redeemed in 12 quarterly installments commencing from the 9th quarter of the deemed date of allotment. Accordingly, the Respondent was obliged to pay a sum of ₹ 2.02 Crores by way of the first installment on the NCDs as on 23 June 2013. The Respondent committed a default in payment of the installment, paying merely a sum of ₹ 20 Lacs and leaving balance of ₹ 1.82 Crores. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Advocates letter dated 3 December 2013, the Petitioners served a statutory demand notice under Sections 433 and 434 of the Act. The Respondent failed to comply with this notice. As of 30 September 2014, the Respondent was indebted to the Petitioner for a sum of ₹ 10.89 Crores towards the dues in the respect of the NCDs, when the petition was filed. 2.1.2 Though the Respondent has in its reply to the petition generally denied the dues and put the Petitioners to the proof of the dues, there .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the liability owed by the Respondent to the Petitioners. As of 20 January 2015, a large liability of over ₹ 9.80 Crores is owed by the Respondent to the Petitioners on the Respondent s own showing. 2.1.3 There are dues owed by the Respondent to other debenture holders as well in respect of the NCDs. In its affidavit dated 20 January 2015, the Respondent has indicated a total claim of the NCD holders including the Petitioners herein of over ₹ 263 Crores. 2.2 Company Petition No. 9 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a holding reply of their advocates, awaiting further instructions and documents. 2.2.2 In its reply to the petition, there is no contest to the claim on merits. What is submitted is that the company is going through a financial crisis, but that it has every intention to repay legitimate dues and its new management is trying its best to get the company back on track. That was on 18 February 2015. 2.3 Company Petition No. 990 of 2014: 2.3.1 The debt owed by the Respondent to the Petitioner - Sunc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aken on 3 March 2015. There has since been no change in the stand. 2.4 Company Petition No. 16 of 2015: 2.4.1 The Petitioners claim here is in the sum of about ₹ 39.33 Lacs on account of multiple business loans. There is no contest to the claim on merits in the Respondent s reply. The reply pleads a case of temporary financial crisis. 2.5 Company Petition No. 19 of 2015: 2.5.1 The claim here is of a sum of about ₹ 11.48 Lacs on account of a business loan. There is no contest on merit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#8377; 47.10 Lacs on account of a business loan extended by the Petitioner to the Respondent. 2.9 Company Petition No. 23 of 2015: 2.9.1. The Petitioner s debt in the sum of about ₹ 11.66 Lacs is not disputed by the Respondent. 2.10 Company Petition No. 24 of 2015: 2.10.1 The Petitioner s debt of about ₹ 22.90 Lacs in not disputed. 2.11 Company Petition No. 25 of 2015: 2.11.1 The Petitioner s debt of about ₹ 5.89 Lacs is uncontested. 2.12 Company Petition No. 26 of 2015: 2.12.1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on merits. 2.15 Company Petition No. 47 of 2015: 2.15.1 The claim of about ₹ 56.86 Lacs is on account of an Inter Corporate Deposit and is contested in the reply by a bare denial. 2.16 Company Petition No. 112 of 2015: 2.16.1 The Petitioner s claim of about ₹ 59.13 Lacs on account of an Inter Corporate Deposit is not contested in the reply except to say that till such time as the representatives of both the Petitioner and the Respondent sit together and reconcile the account, there i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g to pay legitimate dues, if any. This is as of 28 July 2015. The position remains the same till date. 2.18 Company Petition No. 177 of 2015: 2.18.1There is no contest to the Petitioner s claim of about ₹ 1.11 Crores except to say that the account of the Petitioner needs to be verified. This has been the position since the date of the Respondent s reply, i.e. 11 March 2015. 2.19 Company Petition No. 178 of 2015: 2.19.1The claim of about ₹ 66.65 Lacs on account of an Inter Corporate D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Petitioner s claim of about ₹ 3.71 Lacs is on account of goods sold and delivered. There appears to be no contest on the merits of the debt. 2.23 Company Petition No. 417 of 2015: 2.23.1There is no contest to the Petitioner s claim of about ₹ 6.94 Lacs on account of goods sold and delivered beyond stating that the employees of the company are not aware of past transactions and till such time as inspection is offered by the Petitioner, the Respondent is not in a position to deal with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ates for replying the petitions. All affidavits run along the lines of one or the other of these templates. The debts are mostly denied generally; it is submitted that there is some reshuffling in the management, some employees have left and the company has yet to verify the records and reconcile accounts. All replies plead temporary financial crisis. There is no change in this position over the last many months during which the petitions have been pending and adjourned from time to time. 3.2 At .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

particularly since it has a vital bearing on the merits of this common defence. 3.4 Company Petition No. 961 of 2014 appeared on board on 28 October 2014. (The Petitioner s debt, as noted above, was over ₹ 9.50 Crores as of that date.) An undertaking was furnished on that day by the Managing Director of the Respondent Company, in order to prove its bona fides, to pay an amount of ₹ 1 Crores to the Petitioners - Tata Capital Financial Services Ltd. - in two installments of ₹ 50 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

this Court against the Respondent Company, including twenty Suits by debenture holders of similar NCDs as held by the Petitioners - Tata Capital, where the Debenture Trustees in respect of the NCDs had taken out Chamber Summonses for appropriate reliefs.) When the Company Petition appeared on board on the next occasion, the advocates of the Respondent sought to withdraw their appearance and the matter was adjourned. On 7 January 2015, learned Senior Counsel appearing for the Respondent, on instr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by consent of parties, M/s Yardi Prabhu Consultants and Valuers Pvt. Ltd. were appointed as valuers to value the property, namely, Elder House. The valuers submitted their report estimating the fair value of the property at ₹ 113.24 Crores. When the petition was thereafter taken up for hearing, learned Senior Counsel of the Respondent submitted that instead of Elder House, other properties of the Company, namely, its plots at (i) MIDC, Thane - Belapur Road, (ii) Village Charba in Dehradun, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s Court. The Appeal Court, whilst directing a notice, granted an ad-interim stay against sale of Elder House, clarifying that there would be no stay against steps being taken for sale of other properties. By its detailed order dated 30 March 2015, the Appeal Court directed the creditors of the Respondent to first sell the other properties of the Company, namely, two plots at MIDC, Thane - Belapur Road, Thane and land at Charba in Dehradun within three months from 30 March 2015. The Appeal Court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thereafter came up on 24 April 2015 before the Appeal Court. On that day, Counsel for the Company asked for extension of time to make the aforesaid payments. Learned Counsel placed before the Appeal Court an indicative term sheet in respect of a financial facility to be provided to the Appellant (i.e. the Company) by a certain lender, which indicated that the Company was trying to arrange for funds to the tune of ₹ 350 Crores. The Appeal Court granted extension of time to pay the sum of & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

up before a Special Bench sitting in the May Vaccation on 14 May 2015. A request was made by the Company for continuation of ad-interim reliefs till 31 July 2015 once again on the basis of the same confidential indicative term sheet, which was not disclosed to the other parties. The Division Bench (of which I was a member) observed that it was not possible to act on an un-signed term sheet without disclosing the same to the creditors of the Company and grant a long stay. The Division Bench, how .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he ad-interim relief concerning the sale of properties of the Company was continued upto 3 August 2015. On 3 August 2015, the Appeal Court noted that the Company had again prayed for extension upto 30 September 2015. The Appeal Court held that having regard to the extensions granted in the past, the Court was not satisfied about the bona fides of the present request. The Court gave one final opportunity upto 13 August 2015 and listed the matter on 14 August 2015. The Court observed that if by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not disclosed to the creditors, who are pressing for the admission of winding up petitions. As I have discussed below, it is not possible, in the face of the facts recounted above, to dismiss the winding up petitions or even postpone the hearing for admission on the basis of a mere indicative term sheet or even a so called final term sheet (which is not even disclosed to me), which is said to be confidential and therefore, not to be disclosed to the Petitioners before this Court. 3.6 Let me now .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

made several investments in India and abroad, which resulted into short term fund issues. This led the Company to sell Shelcal and 29 of its other brands to Torrent Pharma in 2014 for ₹ 2004 Crores for India and Nepal, though international rights in Shelcal and other brands were retained by the Company. Currently, its brands like Shelcal and Chyonoral are under registration in a lot of African and South Asian Countries. These brands will grow and contribute to the business turnover. The Re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

port the geographical reach of the Respondent Company. The liabilities, though need to be cleared off, are more than sufficiently covered by assets and brands. The Company has entered into Term Sheet with a Financial Institution. The Respondent Company believes that with the cash inflow from the Financial Institution the Respondent Company will be able to solve its problems. The Company expects a turnaround in Financial Year 2015-16. By FY 2017 Elder Group (domestic and international) is expecti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

poised commercial insolvency staring all the creditors. (b) The Respondent is in the process of entering into an agreement with a Financial Institution and therefore the Company Petition be adjourned: 3.8 The Respondent once again relies on the ubiquitous term sheet with a Financial Institution and an agreement , which is likely to be executed between the Company and the Financial Institution 'on or about 30 September 2015 . The Respondent says that ICD holders and other creditors would be p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is Court for the first time on 24 April 2015. On that day the Court was told that a definitive agreement based on this term sheet was being executed within about ten days. Thereafter as many as four applications for extension of time were made by telling the Court each time that the agreement was likely to be executed. Finally, a Division Bench of this Court, by its order dated 3 August 2015, listed the matter on 14 August 2015 and observed that if by that date the agreement was not placed on re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Today at the time of passing of the order, learned Counsel for the Respondent Company, produces an order of the Appeal Court dated 8 September 2015 by which a final term sheet dated 31 August 2015 is taken on record in a sealed envelope. The order notes the Respondent's submission that the financial institution would be able to provide upto ₹ 170 Crores by 31 October 2015, 'subject to execution of mutually acceptable documents and deeds'. The Appeal Court also accepted a statem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

negative. 3.10 This Court, as I have recounted above, was first told on 7 January 2015 that the Respondent was willing to sell Elder House, the main asset of the Company, and pay its creditors; After Elder House was valued with consent of creditors, the Respondent, on 24 February 2015, claimed that its other properties be sold first before Elder House was put up for sale; The Appeal Court accepted this suggestion on 30 March 2015 and directed the creditors to first sell these other properties o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

poorly on the bona fides of the Company. The Appeal Court, in its order of 3 August 2015, in fact observed that it was not satisfied about the bona fides of the Company s last request for extension. That situation continues even till the date of this order. Even in the face of a so called final term sheet, there is as yet no concrete proposal placed on record for payment of the Petitioners' dues. We are still told that the agreement with the lender is yet to be made and we must even now make .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on the basis of an undisclosed document shared only with the Court with a view to stem over a commercial tangle resulting from the disclosure of a confidential document with a third party, who is trying to help resolve the matter. That may in an appropriate case eventually advance the cause of justice. But to consistently have the hearing of winding up petitions adjourned for months on end on the strength of an undisclosed document, is simply unacceptable. It is an anathema to the due judicial p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct ducks the hearing behind a shroud of confidentiality. The term sheet does not inspire any confidence, in the facts noted above. The Petitions cannot be simply adjourned because there is some as yet undisclosed term sheet. The final term sheet of 31 August 2015, whereby the financer would be able to provide upto ₹ 170 crores by 31 October 2015, is said to be subject to execution of mutually acceptable documents and deeds. That means two things. Even now there is no definitive agreement, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assets worth over ₹ 667 Crores. That is a mere say so. There are unilateral valuations obtained by the Respondent. The truth of the matter may be different. For example, Elder House, which is said to be worth over ₹ 170 Crores on a report of 10 May 2014 produced by the Respondent, was valued at merely ₹ 113 Crores as of 5 February 2015 by a valuer appointed by the Court. There is no authentic valuation of a recent date (all reports are of more than a year back) placed before t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt s own guesstimate. 3.14 Based on these unilateral figures, the total assets of the Company are said to be worth approximately ₹ 1935.77 crores ( in the stand alone balance sheet) as of 30 June 2014. As against these assets, the total liability of the Company is said to be ₹ 1150.18 Crores ( in the stand alone balance sheet) as on 30 June 2014. Unaudited stand alone financial results for the quarter ended 31 March 2015 is the latest financial document relied upon by the Respondent. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

negative. 3.15 The last available audited balance sheet (consolidated), i.e. for the year ended 30 June 2014, presents the following picture: As against the total liabilities (non-current and current ) of 1514.84 Crores, these are fixed assets of ₹ 1012.37 Crores. The other assets are long term loans and advances of ₹ 305.38 Crores, intangible assets of ₹ 219.70 Crores and current assets (including current investment, trade receivables, short term advances, etc.) of ₹ 923 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

advances of ₹ 855.32 Crores made to various parties on Current account either during the year or in earlier financial years, the reasons of which including details regarding financial capability of these parties and confirmation/details of their accounts were not made available to the auditors; (iii) As for capital advances of ₹ 30.41 Crores, trade advances of ₹ 36.25 Crores and other advances for brand building payments of ₹ 78.50 Crores, documentation/confirmation as al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ors. The independent auditors have, in their report, emphasised the following: Without qualifying our report, we draw attention to the following points: 1. We draw attention to Note No.40 of the Notes annexed to and forming part of the financial statements stating that the financial statements are being prepared on a going concern basis, notwithstanding the fact that the Company has sold and transferred its branded domestic formulations business in India and Nepal to Torrent Pharmaceuticals Limi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tatutory liabilities. The Company mentions that the proceeds of such sale and transfer were used to repay financial obligations of banks/ institutions. Further, for details of exceptional items and working thereof, refer Note No.29. 2 We draw your attention to Note No.29 of the Notes annexed to and forming part of the financial statements. With a view to reducing the debts of the Company, the Board of Directors of the Company had approved the proposal to restructure the Company's business in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ty manufacturing contracts, C & F agreements, etc. as a going concern and a definitive Business Transfer Agreement was signed with Torrent Pharmaceuticals Limited, Ahmedabad, on 13 December 2013 for a total consideration of ₹ 200,400.00 lacs. The said slump sale transaction was consummated and closed on 29 June 2014. 3. Balances under Trade Receivables, inter-division balances, Loans & Advances in several cases as also in case of a few Bank Accounts have not been reconciled / confi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

resent a rather poor prospect of the Company s viability. The auditors have in terms observed that the various events noted by them cast significant doubt on the ability of the company to continue as a going concern. 4 Based on the foregoing discussion, the emerging picture of the financial standing of the Company may be outlined as follows: (i) The Company is clearly unable to pay its debts. The debts of the petitioning creditors before the Court in this group of petitions alone are to the tune .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and which the Company was given time by the Appeal Court in its order dated 30 March 2015 to pay by 11 May 2015 as a condition for grant of ad-interim relief in respect of sale of its assets, the Company has till date defaulted in payment (having paid only ₹ 40 Lacs so far). (ii) The inability to pay does not appear to be a temporary phenomenon, due to transient liquidity problems. Even as of this date, there is no concrete plan for payment of these liabilities (owed to these petitioning .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2015, has not produced till date any definitive agreement, leave aside the actual availability of the promised finance. The Respondent also cannot take any advantage of the fact that the Appeal Court has, in the winding up petition of Tata Capital, taken the final term sheet on record in a sealed cover. That was expressly said to be without prejudice to the rights of the petitioning creditors Tata-Capital before the Appeal Court in that case. It cannot even be suggested that, that would prejudic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, data and records, third party manufacturing contracts, c&f agreements, etc. as a going concern. In other words, the dire financial circumstances that are reflected in the audited balance sheet as of 30 June 2014 are after the Company recovered, and employed towards its dues, a sum of ₹ 2004 Crores after the slump sale of its most major asset. (iv) There is nothing on record to show the viability of the balance undertaking or business left with the Company after the slump sale mentio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s accomplished. No particulars concerning this write - off were provided to the independent auditors, who have opined so in their report, qualifying their report on that ground. 5 In the premises, the Petitioners have clearly made out a case for admission of the company petitions. 6 Learned Counsel for the Company relies upon the judgments of In Re. M/s. Rishi Enterprises, Bombay 1991(2) Vol.XXXII(2) Gujarat Law Reporter 1213 , American Express Bank Ltd. Vs. Core Health Care Ltd. 1999 Vol.96 Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng of winding up. They proceed on the footing that merely because there is a case for winding up on the ground of inability to pay its debts, the creditors have no absolute right to insist on a winding up. In a given case, the Court may not wind up a company by exercising its discretion under Section 433 of the Act, but instead give time to the company to come out of the momentary financial crisis. The Court would in that case assess the overall financial status, strength and substratum of the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

its purchasers; there were ongoing disputes with these parties; the Company had nevertheless paid 15% of the creditors dues as ordered by the Court; there were workmen, who opposed the winding up petition; and in the light of all these circumstances the Court was of the view that it would be in the interest of justice to give time to the Company to come out of its momentary financial crisis. 9 This decision was followed by another Single Judge of Gujarat High Court in American Express Bank s Ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oting, the Court refused to admit his winding up petition. 10 In Micro Forge (india) Ltd., a Division Bench of Gujarat High Court analysed the financial position of the Company and found as an irresistible conclusion that the profitability of the Company, in substance, was very good. Bearing in mind the overall picture emerging from such financial analysis, the profitability, the turnover, the reserves, the surpluses and the soundness of entrepreneurship were noted by the Court and found to be u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nds (stated to be ₹ 10.44 crores) as a measure of backing up the Company, that may go a long way to bring back the Company to life. In the premises, putting the Company and its holding company to several terms and conditions, the Court decided to give the Company a chance to resurrect itself. What the Court observed in this context is instructive to note. The Court held: A company which is unable to pay its debts is liable to be wound up under the provisions of the Indian Companies Act. Bu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the line of business adopted by the company may no longer be feasible or economical and, therefore, it may be in the interests of the company that it disbands its establishment, conserves whatever assets it has and, then, functions only to effectively distribute such assets to its creditors and if there is something left over, pay that equitably to its shareholders. In such a case, there would be no purpose in trying to keep alive the company and allow it to continue its uneconomic function .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eet its liabilities. But if there is reasonable, if not certain, prospect of its revival and effective and commercially successful functioning, then a short wait by the creditors may be worthwhile. They may then get better returns. It should be the policy of the court to promote revival of a company which at the moment may not be solvent and may not be able to meet its obligations to its creditors, if it is shown that there is reasonable prospect of resurrection and survival. It is easy for a co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and every case that the court should direct continuance of the functioning of the company even subject to terms and conditions. The predominant test would be whether it would be in the best interests of the creditors primarily and the company secondarily to attempt the revival and resuscitation of the company. That would be the case where taking into account circumstances such as the degree of solvency, the likelihood of confidence of the customers in the company in view of its history and the r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nging the Company back on rails. There is nothing in the financial status, strength or substratum of the Company, as I have discussed in detail above, which suggests that I should exercise my discretion not to admit these winding up petitions, for which there is an overwhelming case. I do not see how delaying the admission of these petitions would serve the interest of any of the stakeholders, or indeed, the public interest. 13 It is not in the interest of anyone including the workmen to allow t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

only ₹ 9.65 Crores against the actuarial liability of ₹ 12.93 Crores owed to workmen. If the petitions are admitted and advertised, all stakeholders may be in a position to come before the Company Court and be heard in the matter before a final decision on winding up of the Respondent is taken. Even workmen would be heard in that case. After hearing all stakeholders, a final decision could be taken on whether or not to wind up the Company and at what stage. I am conscious of the fac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n order. Besides, some protective order needs to be passed, in the facts and circumstances of the case noted above, in respect of the assets and properties of the Company. 14 In the premises, the following order is passed : (i) The company petitions are admitted and made returnable on 23 November 2015; (ii) Company Petition No.961 of 2014 shall be advertised as a lead petition in two local newspapers, viz. Free Press Journal (in English) and Nav-Shakti (in Marathi), and also in Maharashtra Gover .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version