TMI Blog2020 (9) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... s not binding and conclusive upon this Court in view of the Division Bench judgment relied upon by the Company's counsel upon the case of J.M. MALHOTRA AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 1994 (9) TMI 365 - MADRAS HIGH COURT ] which has been upheld by the Supreme Court, this Court is of the view that the recommendations of the BIFR can not be accepted at this belated stage for the aforesaid reasons and the proceedings for winding up are liable to be dropped. Even after requisite notification and publication as per Rules no one else has come forward claiming any amount from the Company as a creditor. Moreover, as already stated, the financial position of the company has undergone a change, during pendency of these proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings) Rules, 2016 have been notified on 07.12.2016 and as per Sub-rule 2 of Rule 5 thereof all cases where opinion has been forwarded by the Board for Industrial and Financial Reconstruct (BIFR), for winding up of a company to a High Court and where no appeal is pending, the proceedings for winding up initiated under the Act, pursuant to Section 20 of the Sick Industrial Companies (Special Provisions) Act. 1985, shall continue to be dealt with by such High Court in accordance with the provisions of the Act. In view of this provision, these proceedings continued to be maintainable before this Court and the judgment was reserved after hearing the parties on 06.03.2020. It is worthwhile to mention that under Section 20(1) the BIFR recom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord reveals that vide order dated 23.05.2017 this Court had ordered for notice under Rule 24 of the Companies (Court) Rule for being issued and the record reveals that the said notices were issued/published, but, no claims have been received from any creditor vis-a-vis the Company. Vide order dated 16.07.2018 the Company was granted time to file latest audited balance sheet. Vide order dated 18.01.2020 the statement of the petitioner ? Company?s counsel, that the Company is in financial position to meet its liabilities, was recorded, and the balance sheet of the Company for the last financial year was also mentioned as having been relied in this regard. The Court, however, sought a report from the Official Liquidator with regard to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 298.57 lakhs towards the Bank Guarantees also exists, which the Company has promised to indemnify the Bank of India for any future liability arriving thereon. The case filed by the beneficiaries is reported to have been dismissed in default. As per the affidavit of the Company filed along with the application dated 19.11.2019/06.12.2019 the assets of the Company far outweigh its liabilities. It further states that the creditor i.e. Bank of India at whose behest the proceedings were initiated before the BIFR, has already given an affidavit dated 29.04.2013 before this Court that the dues have been satisfied till 2012 and that since 2012 the net worth of the Company had started improving and it has arisen to ₹ 4,84,82,388/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is the same amount which was realized by the Sugar Corporation allegedly by wrongly invoking and encashing the Bank Guarantee. It is said in the affidavit that the total amount with interest till the date of filing of the affidavit was about ₹ 30 Crores. The application of the State Sugar Corporation for setting-aside the award under Section 30 of the Arbitration Act, 1940 has been rejected by the Civil Court and the Appeal filed against the same has also been dismissed by the High Court on 26.04.2018. The Special Leave Petition filed by the State Sugar Corporation has also been dismissed on 27.07.2018, as such, the said amount is to be realized by the Company from the aforesaid Corporation. In view of the above, it was conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usive upon this Court in view of the Division Bench judgment relied upon by the Company?s counsel upon the case of J. M. Malhotra (supra) which has been upheld by the Supreme Court, this Court is of the view that the recommendations of the BIFR can not be accepted at this belated stage for the aforesaid reasons and the proceedings for winding up are liable to be dropped. Even after requisite notification and publication as per Rules no one else has come forward claiming any amount from the Company as a creditor. Moreover, as already stated, the financial position of the company has undergone a change, as noticed hereinabove, during pendency of these proceedings. It is worthwhile to mention that these proceedings are not on the grounds fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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