TMI Blog2017 (12) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... uch would not be a ground to defer making order for winding up of the company. In view of the above, the Company – M/s. Hari Raj Paper Mills is ordered to be wound up. The Registry shall forward / intimate the present order of winding up to the Official Liquidator, the Registrar of the companies as also to the company within two weeks from today. On receipt of the order of winding up from the Registry of this Court, the Official Liquidator shall give the publication of winding up order in Gujarati daily Newspaper as also in English daily Newspaper within 14 days thereafter. The Official Liquidator is appointed as liquidator of the company and is directed to take possession of the assets and properties of the company and to discharge all statutory functions as per the provisions made in the Companies Act, 1956. - Company Petition No. 351 of 2013 - - - Dated:- 1-12-2017 - MR. C. L. SONI, J. For The Petitioner : Board Opinion For The Respondent : Mr Dipak R Dave, Advocate, Mr Mitul K Shelat, Advocate, Mr Mrugesh Jani, Advocate, Ms Amee Yajnik, Advocate And Thakkar And Pahwa Advocates ORAL ORDER 1. The present petition has come to be registered before thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival scheme if it so emerged or submit report to the BIFR giving detailed reasons as to why revival scheme was not possible. The BIFR, thereafter, proceeded with the hearing after passing certain directions on 04.02.2013 and 09.04.2013 and ultimately rendered its opinion on 30.10.2013 with following observations in paragraphs No.1.6, 2.1, 2.2, 2.3.1, 2.3.2 and 2.3.3 as under: 1.6 In the hearing held on 24.7.2013, the Bench observed that the company was not likely to become viable on a longterm basis and hence, it was just, equitable and in public interest that it was wound up. The Bench hence directed that a Show Cause Notice (SCN) returnable in 60 days be issued accordingly and a gist thereof be also published in one local and one national newspaper for further information of all concerned. Objections / Suggestions would be heard on 30.10.2013. 2.1 In the hearing held to-day (30.10.2013) the representative of OA(IDBI) stated that in the last hearing held on 24.7.2013, the Bench issued show cause notice for winding up. She continued that final opportunity was granted to all parties to submit their rehabilitation proposal alongwith 25% of the estimated cost of the rehab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharging all its due financial obligations. Accordingly, the Bench observed that under the circumstances and merits of the case, there was no other option but to confirm its primafacie opinion that it would be just, equitable and in public interest if the sick company- M/s. Shree Hari Raj paper Mills Ltd is wound up in terms of Section 20(1) of SICA. Let this opinion be forwarded to the concerned High Court along with copies of all the orders passed by the Bench in the case from time to time, for further necessary action in accordance with law. 4. Though served with the notice, respondents No.1, 3 to 6, 8, 9, 11, 13, 16 and 17 have chosen not to appear. Learned AGP Mr.Venugopal Patel appears for respondents No.2 and 10, learned advocate Ms.Amee Yajnik appears for respondent No.14, learned advocate Mr.Dipak Dave appears for respondent No.15, Thakkar and Pahwa Associates appears for respondent No.18 the managing Director of the company, learned advocate Mr. Mrugesh Jaani appears for respondent No.12 and learned advocate Mr.Mitul Shelat appears for respondent No.7. 5. In the first affidavit filed on behalf of respondent No.18, it is stated that scheme for rehabilitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance sheet as of 2003 of the company, Mr.Jani submitted that the erosion to the companies worth get reflected from the position shown in the balance sheet of the company. He submitted that right from 2003 onwards there has been no business or production activity done by the company. He submitted that respondent No.12 has already sold the registered office of the company. Taking the Court to the copy of the scheme of the Government of Gujarat for rehabilitation of Sick Industries, Mr.Jani submitted that the company does not fall within the eligibility criteria to get the relief under the scheme and there are no chances for revival of the company and, therefore, the Court may accept the opinion of the BIFR and order winding up of the company. Mr.Jani submitted that the bank and GSFC were never and are not at all willing to be a part of any agreement with the company for its revival or rehabilitation. 8. Learned AGP Mr.Venugopal Patel appearing for respondents No.2 and 10 submitted that there are huge Government dues outstanding against the company and the company s attempt is to buy time under the guise of applying for relief under the Government scheme. He submitted that u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is under process by the concerned authority, the Court may not order for winding up of the company, otherwise it will work against the chances available to the company for its revival and rehabilitation. 10. Learned advocate Ms.Amee Yajnik and learned advocate Mr.Dipak Dave appearing for respondents No.14 and 15 submitted that since there is already opinion of the BIFR for winding up of the company and such opinion is given after affording sufficient opportunities to the company to come with viable scheme, the Court may not now defer making of the winding up order. 11. The Court, having heard learned advocates, finds that as per the company, the total outstanding dues of the secured creditors as on 31.03.2017 are about ₹ 1652 lac. The sales tax dues are of ₹ 630 lac. The dues of electricity company are of ₹ 86.41 lacs and the workmen dues are of ₹ 3.85 lacs. As observed in the opinion, after the matter was remanded to BIFR, the operating agency (IDBI) had called meeting of the lenders of the company and during the meeting they rejected the proposal of OTS from the company and final opportunity was given to come with fully tied up proposal with or with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the Government scheme for making payment of the principal outstanding dues within the time schedule, the Court asked learned Senior advocate Mr.Pahwa as to how such amount shall be managed, if the Government immediately accepts the proposal and whether such amounts could be deposited with this Court by the promoters or the persons interested in the company. Mr.Pahwa after taking instructions stated before the Court that it was not possible for his clients to deposit any amount before this Court. Therefore, when three years time is already passed after the opinion was given by the BIFR for winding up of the company and when it does not appear that the company will be able to get any benefit of the scheme, the Court finds that there is no need to wait or defer making of the winding up order. Even otherwise, unlike statutory provisions in SICA Act not to proceed with winding up petition pending consideration of the scheme by the BIFR, the Court is not required to postpone making of winding up order simply because the company has made application to avail the benefit under the Government scheme for reliefs and concessions to it especially when for long 3 years, after the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to winding up of the sick industrial company. Before BIFR or AAIFR, as the case may be, makes a recommendation for winding up of the company, an enquiry is made in terms of Section 16 thereof wherefor all relevant facts and circumstances are required to be taken into consideration. Before an opinion is arrived at in that behalf, the parties are given an opportunity of hearing. The satisfaction arrived at by BIFR that the company is not likely to become viable in future and it is just and equitable that the company should be wound up must be based on objective criteria. The High Court indisputably on receipt of such recommendation of BIFR would initiate a proceeding for winding up in terms of Section 433 of the Companies Act. Sub-section (2) of Section 536 ipso facto does not confer any jurisdiction upon the Company Court to direct sale of the assets of the sick company. It has to exercise its power thereunder subject to the provisions of the special statute governing the field. Despite the fact that the procedures laid down under the Companies Act would be applicable therefor but they must be read with sub-section (4) of Section 20 of SICA which contains a non-obstante clause and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is required to be filed for initiating a proceeding under Section 433 of the Companies Act as the recommendations therefor are made by BIFR or AAIFR, as the case may be, and, thus, the date on which such recommendations are made the Company Judge applies its mind to initiate a proceeding relying on or on the basis thereof, the proceeding for winding up would be deemed to have been started; but there cannot be any doubt whatsoever that having regard to the phraseology used in Section 20 of SICA that BIFR is the authority proprio vigore which continues to remain as custodian of the assets of the Company till a winding up order is passed by the High Court. 15. Mr.Pahwa however submitted that as held by this Court in judgment dated 10.10.2006 in Company Petition No.234 of 2001, the opinion of the BIFR is always not binding to the High Court. It is true that the opinion of the BIFR may not bind this Court for winding of the company, however, if the company fails to satisfy this Court that it has become viable economically and financially, there is no reason not accept the opinion of the BIFR which was rendered after giving full opportunities to the company and after finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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