TMI Blog2015 (12) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... , admittedly after the order of winding up is passed by this Court, applicant is having no authority from the concerned Board of Directors to initiate the proceedings before this Court, therefore, in absence of valid authority given to the Chief Financial Officer, this application is not maintainable and therefore also the same is required to be dismissed. Symbolic possession of the properties of the applicant – company in liquidation has been taken over by the provisional liquidator in August 2014, inventory has been prepared. Lead secured creditor of all consortium bank has already initiated proceedings under Section 13 of the SARFAESI Act and therefore also as per further proviso of Section 15(1) of SICA, the reference itself is abated. However, we may not decide that issue at this stage. But, primafacie, this contention is required to be kept in mind while considering this application. Further, all the preconditions of Section 15 of SICA are complied with or not is also not gone into by this Court in detail as it is not required in the present proceedings. In view of the aforesaid facts, as a Company Judge, this Court cannot modify the order passed by the Hon'ble Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out that now the Official Liquidator has sent a communication dated 26.10.2015 to the applicant company and informed to take over the physical possession of the factory premises of the company on 03.11.2015 at 12 noon. The applicant after the receipt of the said communication immediately informed the Official Liquidator by communication dated 29.10.2015, which was received by the Official Liquidator on 30.10.2015, that reference is registered before BIFR and therefore, Official Liquidator may not take over the possession of the premises of the applicant company. However, applicant is having apprehension that on 03.11.2015 the Official Liquidator will take over the possession of the premises and therefore immediately this application is filed. 5. Mr.Panesar thereafter referred to provisions contained in Section 22 of SICA and submitted that when the reference is pending before BIFR, an inquiry is pending under Section 16 of the BIFR, notwithstanding anything contained in Companies Act, 1956, or any other law, no proceedings for winding up or for execution, distress or the like against any of the properties of the industrial company will lie or be proceed with further except w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencement of the process. The ultimate order to be passed in such a petition is the dissolution of the company in terms of Section 481 of the Companies Act. The words shall be deemed to commence in Section 441 of the Companies Act clearly show the intention of the legislature that although the winding up of a company does not in fact commence at the time of presentation of the petition itself but it shall be presumed to commence from that stage. The word deemed used in the Section would thus mean, supposed , considered , construed , thought , taken to be or presumed . 14. In the light of what has been noticed hereinabove we are of the opinion that the order of the High Court impugned in this appeal cannot be sustained. The appeal is accordingly allowed by setting aside the order of the High Court with a direction that the proceedings pending before the Company Judge shall remain in abeyance till the disposal of the application/appeal before the authorities under the Act. 7. Learned counsel thereafter has placed reliance upon the decision rendered by the Hon'ble Supreme Court in the case of KSL and Industries Limited v. Arihant Threads Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAs as a bar to the recovery proceedings under the RDDB Act or whether the protection of SICA is not available to the appellant company since the recovery proceedings under the RDDB Act had been concluded, the writ petitions would have to be dismissed and are accordingly dismissed. The present appeal is allowed. 8. Lastly learned counsel has relied upon the decision rendered by the Hon'ble Supreme Court in the case of Gram Panchayat v. Shree Vallabh Glass Works Ltd., reported in AIR 1990 secured creditor 1017 and more particularly, paragraph No.10 of the said decision, which reads as under: 10. In the light of the steps taken by the Board under Ss..16 and 17 of the Act, no proceedings for execution, distress or the like proceedings against any of the properties of the company shall lie or be proceeded further except with the consent of the Board. Indeed, there would be automatic suspension of such proceedings against the company's properties. As soon as the inquiry under S. 16 is ordered by the Board, the various proceedings set out under subsection (1) of S. 22 would be deemed to have been suspended. 9. Relying upon the aforesaid provisions of SICA and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumbent upon this court to pass appropriate order of winding up, in the present proceedings. The company so far not come forward with any concrete offer, which could be said to be helpful in accepting the submission canvassed on behalf of the company. 12. Therefore, the Court is inclined to pass final winding up order by exercising the powers under Section 434 with following directions in all the petitions except Company Petition No. 338 of 2013 in case of Kemrock Agritech Private Limited: (i) The court is inclined to depute OL as full fledged provisional Official Liquidator and is directed to take possession of the company and while taking possession, keep with him the bank personnel i.e. officers of Allahabad bank and other bank consortium, as submitted by counsel of the bank. Let they take the possession of the company jointly and complete the formalities on or before 6.5.2015. (ii) The possession be taken over and inventory be prepared and said inventory be signed by Allahabad Bank as well as OL as well as company's representative, who are present in accordance with law. (iii) The Allahabad Bank is at liberty to depute the security agency, as agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to depute the security agency, as agreed before this Court, at the site at their own cost. (iv) The Sale Committee be formed in accordance with law and said valuation report be received on or before 25.5.2015 and highest valuation be accepted for placing the upset price. (v) The advertisement be released in terms of Company (Court) Rules, whereunder, it may be specifically mentioned the time of inspection, time for receiving the tender form and last date of accepting the offer. The valuation report be prepared till 25.5.2015. (vi) The advertisement be released on 1.6.2015 in the local daily newspapers inviting offers, having wide circulation being 'Gujarat Samachar' in Gujarati daily and 'Times of India' English daily. (vii) The date of inspection of property is fixed from the date of publication of advertisement till last date of submission of forms and offers between 1100 am to 400 pm. The last date of submission of offer and bid is 15.6.2015. (viii) The OL shall receive the bid in two reports one containing the EMD and another for the offered amount. (ix) The said offers be invited in sealed cover and same will be opened in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assets could not be taken on 16.10.2015. Now the Official Liquidator has once again issued letter on 26.10.2015 for taking over the possession of the assets of the applicant company. Now at this stage, the applicant company has filed this application. Thus, it appears that applicant is playing tricks with the Court by filing application through workers and now by the company itself. Thus, this Court may not entertain this application. 13. Learned advocate for the Official Liquidator therefore submitted that the applicant has not produced the aforesaid important aspect of the matter before this Court and therefore this application be dismissed only on this ground. 14. Learned advocate Mr.Yadav for the Official Liquidator thereafter submitted that Managing Director of the company is out of India since more than one and half year as per the submission canvassed by the learned advocate for the applicant in the aforesaid proceedings. Concerned officers who have remained present before the Company Judge as well as before the Hon'ble Division Bench also disclose before this Court that the Managing Director is not present in the country. The other Directors who are pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 10.09.2015 (i.e. the date on which the Hon'ble Division Bench has passed the order) to file the present proceedings. 18. Learned advocate Mr.Singhi thereafter referred to the provision contained in Section 15(1) of the SICA and submitted that conditions laid down in the said section are not satisfied and therefore BIFR cannot register the reference. 19. At this stage, learned advocate Mr.Pranav G. Desai appearing for the Allahabad Bank i.e. lead secured creditor of all secured creditors has referred to the observation made by learned Company Judge in paragraph No.10 of the order dated 04.05.2015 and submitted that Bank has initiated proceedings under the SARFAESI Act and therefore in view of further proviso of Section 15 reference filed by the applicant is required to be abated. Section 15(1) of SICA reads as under: 15. Reference to Board (1) When an industrial company has become a sick industrial company, the Board of Directors of the company, shall, within sixty days from the date of finalisation of the duly audited accounts of the company for the financial years as at the end of which the company has become a sick industrial company, make a reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in such company. 20. Learned advocate Mr.Singhi thereafter submitted that as per Section 22(1) of SICA proceedings pending before the other Courts are suspended. However, for the said purpose, the stay from this Court is not required to be obtained by the applicant. However, in the present case, preconditions contained in Section 15(1) of SICA are not satisfied and the applicant has suppressed material fact before the BIFR and therefore the applicant cannot rely upon the pending reference before the BIFR. 21. Learned advocate Mr.J.S.Yadav further contended that symbolic possession has already been taken by the Official Liquidator when the order of appointment of provisional liquidator was passed by this Court in August 2014. Inventory was also prepared by the Government Approved Valuer, GITCO. Report was also filed by the Official Liquidator before this Court in the winding up petitions filed by the concerned creditors. Thus, at present, the Official Liquidator is simply implementing the directions given by the learned Company Judge which has been confirmed by the Hon'ble Division Bench of this Court. He, therefore, submitted that if any order is passed by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Officer, who has verified the present application has not produced the authority given by the Board of Directors for filing the present proceedings, when inquired it is stated that the Board of Directors had given the authority to Mr.Sanjeev Jain, Chief Financial Officer to file the proceedings before this Court and to file the affidavits in May, 2014. However, admittedly after the order of winding up is passed by this Court, applicant is having no authority from the concerned Board of Directors to initiate the proceedings before this Court, therefore, in absence of valid authority given to the Chief Financial Officer, this application is not maintainable and therefore also the same is required to be dismissed. 26. Symbolic possession of the properties of the applicant company in liquidation has been taken over by the provisional liquidator in August 2014, inventory has been prepared. Lead secured creditor of all consortium bank has already initiated proceedings under Section 13 of the SARFAESI Act and therefore also as per further proviso of Section 15(1) of SICA, the reference itself is abated. However, I may not decide that issue at this stage. But, primafacie, this conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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