TMI Blog1980 (5) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... July, 1971. ( 3. ) Now , in order to appreciate the facts of this case as to whether the court should exercise its discretion for stay, it is necessary to set out the relevant facts which will clearly show the conduct, intention and motive of the petitioners who are not only the contributories as aforesaid of the Sonajuli Tea and Industries Limited but are also the guarantors of the loans granted by the Punjab National Bank Ltd. to Sonajuli Tea and industries Limited for which a suit for the recovery of about ₹ 21,00,000/- has already been filed in this Court and leave of the court under section 466 of the Companies Act, 1956, has been obtained by the punjab National Bank Ltd. and the Official Liquidator has been appointed Receiver over the securities of the Punjab national Bank Ltd. ( 4. ) It appears that the owners of the mill being the Prem Chand Jute mills Limited, Respondent No. 4 herein, for some reasons or rather has not been able to run the said mill and from 1958 1968 and the mill was leased out to one kanoria and Company. Thereafter, by an alleged agreement for sale dated the 9th of November,, 1968, between the petitioner No. 2, Basudeo Prasad agarwalla as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being leased out to the said lessee for the terms and on the, terms, conditions and covenants contained herein. To hold the said demised premises for a term of thirty years with an option for renewal on the same terms as hereinafter contained commencing from the 31st day of may, 1969, YIELDING AND PAYING therefore unto the lessor the; rents following namely first the rent; of ₹ 28000 ). (Rupees twenty-eight thousand) for each and every month for the first year and the second year of the said term and the rent of ₹ 30,000/- (Rs. thirty thousand) for each and every month for the third and fourth year of the said terms and thereafter the rent of ₹ 32,000 (Rupees thirty-two thousand) for each and every month for the fifth year and each succeeding years of the said terms with proportionate amounts for any part of a year all rents to be paid without any abatement or deduction on any account whatsoever and payable on or before the fifteenth day of the month immediately succeeding the month for which the rent becomes payable. 2. The lessee hereby covenants with the lessor as follows :-To pay the monthly rent on the day and in the manner aforesaid. To pay all the rents t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper working condition (reasonable wear and tear except ed) at the expiration or sooner determination of the term hereby created after settling and paying all dues and claims of all the staff and] or employees and or employees and] or workmen employed and[or working in the said Mills at the time and after discharging and paying all liabilities touching or concerning the said Mills such needs claims and liabilities whether arising under any situation or otherwise and lawfully terminating the services of all such staffs employees and workmen as afore- said. PROTIDED ALWAYS AND IT is HEREBY expressly agreed and declared by and between the parties hereto as follows :- (i) If the rent hereby reserved or any part thereof shall at any time be unpaid for three consecutive months after becoming payable or if the lessee shall fail to perform or observe any of the terms and conditions herein contained and on the part of the lessee to be observed and performed or if any other compulsory winding up is made by a competent court or if any resolution is passed for any voluntary winding up or if the lessee shall suffer any distress or execution is levied in respect of its properties which remain in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d lease. By a notice dated the 15th of October, 1977, the said Sonajuli tea and Industries Limited determined the lease with effect from 1st of October, 1977, and services of all the employees of the Sonajuli Tea Industries limited were reverted to Prem Chand jute Mills Limited and all liabilities and obligations were that of Prem chand Jute Mills Limited. On the 17th of October 1977, Sonajuli Tea and Industries Limited filed a suit against Prem chand Jute Mills Limited being Suit no. 676 for a decree of ₹ 1,53,40,000/ -. The suit was filed on the undertaking to pay the Court fees but no Court fees were paid and the writ of summons was not served till April, 1978. The suit was filed on the basis of the lease determined by Sonajuli Tea and Industries limited by accepting alleged breaches of the terms of the lease by Prem chand Jute Mills Limited. On the 9th of November, 1977, Prem Chand Jute mills Limited gave notice to the Sonajuli Tea and Industries Limited, hereinafter referred to as the company (now in liquidation) that it was under no obligation to the said company (now in liquidation) under the said lease as alleged. By a letter dated the 17th of December, 1977, the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal Court In the appeal preferred from the winding up order dated the 13th of August, 1979. On the 6th of november, 1979 notice by M. P. Agarwal for Indian Burlup that the mill would be run. On the 14th of November, 1979, similar notice was issued by the petitioner no. 2, B. P. Agarwal. On the 19th of november, 1979, application under section 466 of the companies Act made by Mahabir prasad Agarwal for stay before the Appeal court and a conditional order was passed which was made returnable on the 5th of december 1979. On the 5th of December, 1979, further conditions were imposed by the Appeal Court for continuance of the stay on submissions made by Prem Chand jute Mills Limited. On the 20th of December, 1979, a letter by Prem Chand Jute Mills limited to Indian Burlup and on the 28th of november, 1979, reply by Indian Burlup to prem Chand Jute Mills Limited. In December, 1979, Sonajuli Tea and Industries Limited preferred an appeal to the Supreme court from the order dated the 5th of december, 1979, made by a Appeal Court directing Sonajuli Tea and Industries, Limited to furnish security for the sum of ₹ 6,00,000/- by way of guarantee as a condition for stay. On the 14th of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 41 of the petition would be paid or provided for and it is for the public interest and to secure employment for the workmen, stay should be granted so that the company may revive and if necessary, frame a scheme for the working of the said company. ( 8. ) Mr . Sen also submitted that if the court is satisfied as to the bonafide of the applicants, it can grant a conditional stay for a limited period directing payment of the creditors or deposit in Court. He submitted that the Presidency Jute Mill Limited who had been unable to run its factory since 1958 has originally agreed to sell the said mill together with machineries to the indian Burlup Company, partnership firm of which the petitioner Nos. 1 and 2 are some of the partners and thereafter, as the sale could not be completed in view of violation of the provisions of the Compaines Act, it granted a lease in 1971 in favour of the company, the said Sonajuli Tea and Industries company Ltd. , for a period of 30 years with an option of renewal on the terms and conditions set out therein. Now the said lessor the Presidency Jute Mill Limited is opposing the present appiication with the sole object of getting possession. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lessor, the Presidency Jute Mill Limited. He also referred to section 535 of the companies Act and Rules 263 of the companies (Court) Rules, 1959 and onward. He submitted that in the facts of this case the company should be given an opportunity to revive and the applicants who are some of the contributories are interested in reviving the company by making all arrangements for the same and also come out with a scheme application if a stay is granted. ( 9. ) Mr . A. Law, appearing for Manic ch. Kundulia, a creditor, supported the application for stay and submitted that the company should be revived for the interest of the creditors. Mr. Sanat Kumar Banerjee, appearing for the Watch and Ward Staff, submitted that the company should be revived so that the Watch and Ward Staff may be paid their arrears for whom he was appearing. Whereas Mr. M. L. Dhar, appearing for kishan Lal Bangur, whose claim is about ₹ 1,59,087. 02 P. opposed the applicant and submitted that the application is malafide and the petitioners are no one else but the ex-Directors and their relations and partners who were in control and management of the company before it was wound up. Mr. Pranab Chatterjee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintainable although the said questions are technical but it has to be viewed along with the other conducts on the part of the petitioners as disclosed earlier when the facts of this case has been stated and taking together it has to be judged whether the present application can be said to be a bonafide application and should be held to be maintainable or not. There is no notice of petition or judges' summons and, therefore, there is no proper application according to Mr. Mukherjee. Mr. Mukherjee rightly submmitted that the ex-Directors or any other Officers has not filed any statement of affairs as required under section 454 of the Companies Act. 1956. He also submitted that the company has no. assets. Analysing the petition and the reply Mr. Mukherjee rightly commented that their is no material particulars to show that the applicant has the financial solvency or Tesource to revive the company. It is an admitted fact that the mill has been lying closed since April, 1977. Steps has been taken by filing suit by the Punjab National bank Ltd. for realisation of its dues, against the security of the company's assets for the sum of ₹ 21,00,000/ -. The petitioners are the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the said decision of S. R. Das, J. He also referred to a. I. R. 1970 Madras'203 paragraph 18 in support of his proposition that mere payment of the creditors and their consent will not be enough for the Court to grant stay under section 466, but the commercial morality and public interest has also to be looked into in the facts of a particular case. He also referred to Halsbury's Laws of england Volume 7, 4th Edition, Articles 1375 and 1376 at page 779 where the. law as to grant of stay after the winding up has been summarised. Mr. Mukherjee also referred to International Coal Corporation vs. Sitalpur Coal Concern Limited A. I. R. 1972 Calcutta 45 which is a decision under the Arbitration Act where it has been observed by Ramendra Mohan Datta, J. at paragraph 25 at page 50 as follows :- rules framed by this Court even though they are procedural in nature are meant to be followed and in the absence of the compliance of such rules under section 21 of the arbitration Act, 1940, the Court cannot be said to have been properly moved and the Court has jurisdiction to determine the suit cannot be taken away except under the said provisions relying on the said passage Mr. Mukh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Limited, the company ( now in liquidation ) was directed to deposit a sum of ₹ 1,00,000/-as security. The said security amount was received by the Advocate-on-record of the prem Chand Jute Mills Limited from the insurance Company on account of a fire at the, said mill premises under the Insurance policy in terms of the said lease between the Prem Chand Jute Mills Limited and sonajuli Tea and Industries Limited and thereafter, the Prem Chand Jute Mills Limited instituted a suit for the arrears of the rent under the said lease against Sonajuli Tea and industries Limited (now in liquidation) for the recovery of ₹ 6,62,720/- for the arrears of rent between September, 1975, to March 1977. As a counterblast to the said suit sonajuli Tea and Industries Ltd. along with indian Burlup and Laminated Works as plaintiffs instituted a suit being Suit No. 676 of 1977 against Prem Chand Jute Mills Limited for a decree of ₹ 1,53,40,000/- and for possession of various plants and machineries lying at the mill premises alleged to be belonging to Sonajuli Tea and Industries limited. It is alleged that the said suit was filed with ulterior motive and only to prevent the prem Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the workers and the employees of the jute Mill went on strike from 3rd week of march, 1977, resulting in the stoppages of work and thereafter Sonajuli' Tea and Industries limited declared a lock-out with effect from April, 1977, which was still continuing. In between on the 13th of August, 1979, on the winding up petition of Sri Ashkaian chattar Singh being Compaey Petition No. 359 of 1978 an order of winding up was passed by me. The said winding up order was advertised in the Amrita Bazar Patriika on the 10th of September, 1979. On line 10th of September, 1979, the interim order in the Sonajuli's application in the appeal from the order of admitting the winding up petition by my order dated the 10th of July, 1979, was vacated by the Appeal Court. On or about 10th of September, 1975, Sonajjuli tea and Industries Limited perferred an appeal from the said winding up order dated the 13th of August, 1979, and made an application for stay and in that application before the Appeal Court Prem Chand Jute Mills limited intervened and on the 19th of september, 1979, the interim order was vacated by the Appeal Court and the official Liquidator was directed to take possession on a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sub-lessee under Sonajuli Tea and Industries Limited, there seems to be complete identity and it appears that the said Mahabir prasad Agarwal and Basude Prasad Agarwal and their group have made this application 16. after having failed in all attempts to set aside the winding up order or stay the winding up proceedings in the appeal Court and also before the Supreme court. Therefore, Mr. Mukherjee rightly submitted that the company being heavily involved circumstances and the conduct of the Mahabir Prasad Agarwal. Basudeo prasad Agarwal and others are lacking in commercial morality. The company Sonajuli Tea and Industries Limited has no assets except the alleged lease which according to them has already been determined and in these circumstances it must be held that the present application is not bonafide. The directors have not filed any statement of affairs and there is no material particulars at all as to the alleged financial solvency of the petitioners or as to what arrangement has been made with the banker of the company who has already filed the suit and further the jute mill is lying closed since 1977. It is only after the winding up order was passed by taking all sorts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke possession of the Registered Office of the company at No. 10, Clive Row, Calcutta, and on arrival they found that neither any sign board nor any name plate of the company was anywhere of the premises but two sign boards namely Ms. Sita Ram Jute Mill Limited and Ms. Kishan Lal and Sons Pvt. Ltd, were there. The report of the petitioning creditor, that is, Ms. Ashkaran Chattar singh, persuaded the Official Liquidator to enter the said Registered Office and there the Official Liquidator met the said Vaskaran who alleged to be in the staff of Ms. Kishanlal and Sons Pvt. Ltd. and the said Vaskaran stated that the company (in liquidation) was situated there long before and the same has been shifted from that place to another place and the present address of the company was not known to him. ( 19. ) I must observe that it appears to be strange that the alleged Secretary of the Sonajuli Tea and Industries Limited who has affirmed so many affidavits before this Court on behalf of the Company is not aware of the present where about of the company. Thereafter,; the official Liquidator from the records of the Registrar of Companies cam to know that the Registered Office of the company wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and the Official Liquidator with police help has taken possession of the Registered Office of the company at No. 8, Lyons Range, Calcutta. The Official Liquidator thereafter contacted the Receiver appointed in the suit filed by Indian Burlup and Laminated Works Limited and Sonajuli Tea and industries Limited (In liquidation) vs. Prem Chand Jute Mills Ltd. for taking possession of the factory. On the 19th of November, 1979, on the application. of Mahabir Prasad Agarwal, the petitioner No. 1, herein an order was made by the Appeal Court that upon the petitioner paying a sum of ₹ 50,000/- in cash with the Official Liquidator in course of the day and upon furnishing securities by way of Bank guarantee for the sum of ₹ 1,00,000/- to the satisfaction of the Registrar, Original Side, or paying a sum of ₹ 1,00,000/- in cash to the Official Liquidator on or about 4th of December, 1979, all further proceedings in the winding up will be stayed. In default of deposit of ₹ 50,000/- in cash before being made with the Official Liquidator and in default of furnishing the bank guarantee for the sum of ₹ 1,00,000/- or paying ₹ 1,00,000 to the Official Liqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1980, the Official Liquidator brought to the notice of this Court that the assets of which inventory to be made are quite substantial and it will take quite sometime to complete the work of inventory and, therefore, the time to file the report was extended irrespective of the completion of the inventory work as to the financial position of the company and the conduct of the exmanagement and any other matter which the Official Liquidator considers necessary to report. Thereafter, the official Liquidator has inspected the books of account of the company maintained by the registrar of Companies, West Bengal, and on such inspection it was found that the company has filed its last Balance Sheet as on 31st of December, 1974. Therefore, it appears that the company has defaulted in filing the annual accounts with the registrar of Companies, W. B. for the subsequent years, i. e. , since 1975. It also appears from the Auditor's report on the balance sheet as on 31st of December, 1972, that the company violated certain provisions of the companies Act, for giving loans to the companies under the same management, payment of commission to a firm in which a director of the company is a partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solvent and large number ol creditors including the secured creditor are pressing for their claims, creditors includes the Jute Corporation of india who appeared before this Court pursuant to the advertisement issued in the paper about this application and intimated through Mr. Pranab Chatterjee that its claim is about ₹ 65,00,000/- which claim it is pressing against the company. The Punjab national Bank, the secured creditor, has already filed a suit for over ₹ 21,00,000/-against Sonajuli Tea 8- Industries Limited (now in liquidation) and the Official Liquidator has been appointed Receiver in the said suit and obtained leave under section 446 from this Court. The balance sheet and the Profit. and Loss A/c. of the company which has been filed only up to the year 1974 as per report of the Official Liquidator made under section 466 (2) of the Companies Act, 1956, also reveals the utter insolvency of the company. Further, there is no material before me save and except offer to pay the creditors in full by the petitioners who are no other person than the ex directors and tee shareholders of the company belonging to the same family for mismanaging the company's affairs a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words of reviving an industry and providing employments to the unemployed workers which involves a socio-economic question of the State. The larger interest of commercial morality and public benefit has to be looked into. ( 21. ) I may also mention that Mr. M. L. Dhar, one of the petitioning creditors, to whom the petitioner has offered to pay off being one M/s. Kishan Lal Bangur whose claim amounts to ₹ 1,59,000/- and odd with further costs is also opposing the present application. ( 22. ) The principle on which the court is to act under section 466 of the companies Act, 1956, is laid down in the section itself which runs as follows :- 466. Power of Court to stay winding up- (1) The Court may at any time after making a winding up order, on the application either of the Official Liquidator or of any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Court thinks fit. (2)On any application under this section the Court may, before making an order, require the Officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing binding the other shareholders. ( 25. ) In Palmers' Company Law, volume 1, 22nd Edition in Article 81-98 at page 938 the principle is summaries as follows :- the Court has a discretion, on the application of the liquidator or official receiver, or any creditor or contributory, to stay the proceedings under a winding up order (s. 256 ). In exercising this discretion the Court will be guided by the analogy of bankruptcy in rescinding a receiving order - that, is to say, it will consider the interests of commercial morality and not v merely the wishes of creditors and will refuse a stay if there is evidence of misfeasance or of irregularities demanding investigation. and also in Article 83-60 at page 1001 which is as follows : the Court has discretion, on the application of the liquidator or any creditor or contributory, to stay winding up proceedings at any time (s. 256 (1 ). A copy of any such order must be sent 6y the company, or otherwise as the Court may prescribe, to the Registrar of companies (s. 256 (3 ). In exercising its discretion under this section the Court will consider the interests of commercial morality and not merely the wishes of creditors, e. g. , if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to those applicable in exercising the jurisdiction to rescind a receiving order or annul an adjudication in bankruptcy, will consider whether the order is justified by all the circumstances, including a proper regard for commercial morality. It would not, even under the Old Acts, which did not contain subs. (2) of this section, make an order in the dark, e. g. , if the directors had failed to comply with their statutory duty to give information and to furnish a statement of affair. The jurisdiction may be used to allow in proper circumstances a resumption of business. The Madras decision cited by Mr. Mukherjee on behalf of the petitioner deals with the said question and the relevant portion is set put hereunder being the decision in Sree Shayam Nagar milk Ltd. v. S. K. Dharmaraja Nadar and anr. A. I. R. 1970 Madras 203 at page 210 as follows :- the principles laid down in England were reiterated in the matter of E. I. Cotton Mills A. I. E. 1949 Cal. 69. No case has been brought to our notice, and we have not been able to find any, where in a case analogous to the present, the Court stayed the winding up order. On the contrary, the principles laid down in the decided cases for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rescind the receiving, order. His order was upheld by Cave j. , and Charles, J. There was a further appeal to the Court of Appeal, and there also the decision of the Registrar was confirmed. It; is pointed out in all the judgments; that the consent of the creditors alone will not justify the Court in annulling the adjudication or rescinding the receiving order. Cave, j. observed that it is not right to let a man who is unable to pay his debts in full, loose upon the public to continue his trading without the court having any right of vote lower down he observed that the consent of the creditprs was not the only thing to be considered and added : the Court must consider the position of the debtor, the possibility of his getting over his difficulties, and the interests of the public. It is clearly contrary to their interests that a man who is insolvent should be allowed to go on trading. In fact, it is an offence under the Act for a trader to continue trading after he knows that he is insolvent. lower down he states : we should not be doing our duty to the community if we were to sanction the rescission on the receiving order. To my mind, this man is hopelessly insolvent. Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor objects the proceedings on a compulsory order made after the commencement of a voluntary winding up may be stayed so as to allow the voluntary winding up to continue. Frequently a stay is applied for in pursuance of a scheme of arrangement sanctioned by the Court. 1376. Exercise of power to stay winding up proceedings In the exercise of its jurisdiction to stay, the court, so far as possible, acts upon the principles applicable in exercising jurisdiction to rescind a receiving order or annul an adjudication in bankruptcy against an iudividual. The Court refuses, therefore, to act upon the mere assent of the creditors in the matter, and considers not only whether what is proposed is for their benefit but also whether the stay will be conducive or deterimental to commercial moratity and to the interests of the public at large. In particular the Court will have regard to the following facts : (1) that directors have not complied with their statutory duties as to giving information to the official receiver or furnishing a statement of affairs; (2)that there has been an undisclosed agreement between the promoter and the vendor to the company as to the participation by the promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ) Here the conduct of the petitioners who were at different times and at different stages in different proceedings and in different names have appeared before this Court, the Appeal Court and the supreme Court was to delay and after the payments of the creditors and to obstruct the winding up proceedings and prevent the official Liquidator from taking possession and proceed with the winding up of the company according to the Companies Act, 195c, and the Rules made thereunder. ( 29. ) The petitioner No. 1, Mahabir P. Agarwal, made an application before the appeal Court for stay of the winding up order dated the 13th of August, 1979, obviously under section 466 and where practically the identical grounds which are now sought to be put forward were advanced before the Appeal Court and the Appeal court by the judgment deliverd on the 2nd of February, 1980, by CJ and S. C. Ghosh, J. dismissed the said application after dealing with the various winding up orders against the company and the maintainability of section 466 application before the appeal court ultimately observed as follows : the facts and circumstances of this case which I have earlier indicated go to show that no orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple of winding up proceedings under section 466 as hereinbefore stated and laid down in the said decision in East India Cotton Mills Limited by S. R. Das, J, in A. I. R. 1949 Calcutta 69. The said pass-age in William on Bankruptcy is as follows:- The mere fact that all the creditors consent will no longer entitle the debtor to have the bankruptcy annulled; and where the debts are not paid in full and the adjudication was properly made in the first instance, the court cannot annul except under a scheme under section 21 (vide supra), or an agreement is proposed which amounts in substance to such a scheme, even though not complying with the forma-laties of that section. Even where the debts have been paid in full, the court has a discretion to refuse to annul, and may refuse an annulment on the ground of the bankrupt's misconduct, e. g. , concealment of assets; a second application to annul may, however, be made when a reasonable time has elapsed after the refusal of the first. In Re : Mc-Henry Levita's Claim (under the 1869 Act, where the consent of creditors was relevant), the bankrupt had procured some of his creditors to sell their debts to trustees, who might consent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain, the said Mir. Bhaskaran is alleged to be an employee of m/s. Kishanlal and Sons Pvt. Ltd. at 10, Cliwe row, Calcutta, when the Official Liquidator went there for taking possession of the books, papers, document and assets of the company (in liquidation) as the said address which was the Office of the company )in liquidation) originally. Therefore, it reveals the complete identity of the petitioner, mahabir Prasad Agarwal, and the company (in liquidation ) all through. It is also now disclosed that the company ( in liquidation ) alleged to have inducted another company as an alleged sub-tenant in respect of the said jute mills of Prem Chand which has been leased out to the company (in liquidation)and the said lessor, Prem Chand Jute Mills limited has no notice of such alleged subtenant. The said contrivance appears to me to be an attempt on the part of the petitioners to set up at the first instance Indian burlup and Laminated Works Limited and thereafter an alleged sub-tenant another limited Company to obstruct and interfere with the winding up proceedings and resists possession of the assets of the company and also the said Prem Chand Jute Mills if possible. On the whole the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or stay of winding up petition. As I have already discussed above I have no doubt in my mind that the applicants who were some of the ex-Directors have adopted various contrivances to hang on others properties and deprive the creditors of their legitimate dues only to carry on business in illegal, dishonest manner and absolutely lacking in commercial morality. It is also the further duty of the Court from the Socio-Economic point of view to eradicate dis honest, and corrupt management of the company affairs and to set up a healthy atmosphere in the industry, particularly the Jute Industry which is foreign exchange earner and passing through a boom having very bright prospects in the near future. Therefore the assets of the company being that of Prem chand Jute Mills Ltd. together with any machineries if any has been added by the company in liquidation has to be protected and steps should be taken so that it may be restarted under efficient, honest and bonafide management. The present applicants who have tried various sorts of contrivances by setting up and abortive sale to Indian Laminated and burlup Company by the Premchand jute mills and thereafter the said lease of 1971 was ente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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