TMI Blog2021 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... last 8 10 years. This, prima facie, means that while the productive Assets of the Company are going junk because of disuse and no effective resolution of the matter is happening, either by payment to the Secured Creditors and other Creditors nor the Secured Creditors are allowed to take further recovery measures, subject to the rights and contentions of the various parties involved in the matter, therefore, as an interim measure at this stage, it is deemed appropriate to modify the aforesaid blanket Status Quo order - the Respondent No.5 Shree Industries Ltd. and the Respondent No.9 ASREC (India) Ltd., the Assignee of Bank of Baroda and other Secured Creditors, who have not yet been finally settled and paid off by the Respondent No.5 Shree Industries Ltd., are directed to undertake the negotiation process for Settlement of the dues of such Secured Creditors and try to settle the dues of such Secured Creditors in the interregnum period. The matter shall be treated as Part-Heard. Put up on 15.03.2021, as prayed. - R/LETTERS PATENT APPEAL NO. 2480 of 2010 In R/SPECIAL CIVIL APPLICATION NO. 12979 of 2009 With R/SPECIAL CIVIL APPLICATION NO. 11116 of 2008 With CIVIL APP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he clock back at that stage. If the proceedings are pending in the High Court at such an advanced stage, the Company Court must proceed with the winding-up instead of transferring the proceedings to the NCLT to be decided in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016. Whether such a stage is reached or not would depend upon the facts and circumstances of each case. 3. Paragraph-22 of the aforesaid judgment is quoted below for ready reference:- 22. Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a preadmission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre admission, the same result would ensue. However, post admission of a winding up petition and after the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Electricals Employees Organization V. Jaipur Metals Electricals Ltd. reported in (2019) 4 SCC 227. (iii) Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. reported in 2019 (18) SCC 549. (iv) M/s. Kaledonia Jute Fibres Pvt. Ltd. V. M/s. Axis Nirman Industries Ltd. reported in AIR 2021 SC 32. (v) Swiss Ribbons Pvt. Ltd. and Anr. V. Union of India others reported in (2019) 4 SCC 17. (vi) Innoventive Industries Ltd. V. ICICI Bank reported in (2018) 1 SCC 407. (vii) Arcelor Mittal (India) (P) Ltd. V. Satish Kumar Gupta reported in (2019) 2 SCC 1. 5. After referring to the aforesaid judgments, the Hon'ble Supreme Court laid down the legal position as given in paragraph-22 quoted above. 6. We have sought the assistance of learned counsels Mr. A.S. Vakil, Mr. B.H. Bhagat, Mr. Abhijit Joshi, Mr. Nandish Chudgar and Mr. Devang D. Trivedi appearing in the present case before us for the respective parties on the issue whether the provisions of the Sick Industries Companies Act (Special Provisions) Repeal Act, 2003, as amended by Section 252 of the Insolvency and Bankruptcy Code, 2016 with effect from 01.12.2016 the date notifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., i.e. the Assignee of another Secured Creditor Bank of Baroda, Respondent No.3 before us, that while the dues of other Secured Creditors or Banks, GIIC, etc. were settled by Respondent No.5 Shree Industries Ltd. after the said Auction Purchaser also defaulted in repayment of the loan of Respondent No.1 Gujarat State Financial Corporation, as the purchase price under section 29 of the State Financial Corporation Act, 1951 was converted into a Term Loan to Respondent No.5 M/s. Shree Industries Ltd., but the dues of the Assignee of Bank of Baroda, Respondent No.3 and some other Secured Creditors were not settled. He also referred to some proceedings before the Delhi High Court and the purported Settlement between said Bank of Baroda / Assignee M/s. ASREC (India) Ltd. with M/s. Shree Industries Ltd. by referring to the order of the Division Bench of the Delhi High Court and submitted that even that Settlement did not fructify and M/s. Shree Industries Ltd. did not pay up according to the said Settlement to the Assignee of Bank of Baroda Respondent No.9. He submitted that the present Letters Patent Appeal is pending in this Court for the last more than ten years and bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to take further recovery measures, subject to the rights and contentions of the various parties involved in the matter, therefore, as an interim measure at this stage, we feel it appropriate to modify the aforesaid blanket Status Quo order in the following manner:- (I) We direct the Respondent No.5 Shree Industries Ltd. and the Respondent No.9 ASREC (India) Ltd., the Assignee of Bank of Baroda and other Secured Creditors, who have not yet been finally settled and paid off by the Respondent No.5 Shree Industries Ltd., to undertake the negotiation process for Settlement of the dues of such Secured Creditors and try to settle the dues of such Secured Creditors in the interregnum period. If the Settlement can be arrived at, let such Settlement Document be produced before this Court. If, however, such Settlement is not possible, at least the details of the efforts made for that purpose and the reasons for not arriving at the Settlement, may also be produced in the form of Status Report by the concerned parties before this Court. To that extent, the earlier Status Quo orders dated 22.10.2010 and 13.12.2010 passed by the Coordinate Bench of this Court in the present Lett ..... X X X X Extracts X X X X X X X X Extracts X X X X
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