Belwal Spinning Mills Ltd. vs Official Liquidator and Others

A.K. Sikri, J.

C.M. Nos. 4195, 12634, 12635/2010 and 6651/2011 In Co. Appl. No. 68/2003.

The Appellant, herein, which is an Industrial undertaking, became a sick company because of which it filed reference to the Board of Industrial & Financial Reconstruction (''BIFR'') under the provision of State Level Inter Institutional Committee (''SLIIC''). The BIFR after examining the matter, gave a finding that it was not possible to revive this company and it was just and equitable to wind up the same. On this basis, a reference was made to the Company Judge of this Court to wind up all the companies which were registered as C.P. No. 145/1999. In the said company petition the learned Single Judge passed an order dated 12th December, 2003 directing the winding up of the Appellant company.

Against that order, present appeal, i.e., Co. A. No. 68/2003 was preferred by the Company. During the pendency of this appeal, the Company came out with various suggestions which have settled the matter with different secured creditors. Opportunity in this behalf was given to the Appellant from time to time. Ultimately, finding that the company would not be in a position to settle the dues of the creditors, the appeal was dismissed vide orders dated 27th January, 2010. Against that order said writ petition was filed by the Company. In the said SLP also the company came forward with a proposal to settle the dues of the secured creditors and submitted that it was possible to revive this company. In the said SLP, the Apex Court passed an order permitting the Company to move an application in this appeal for a direction by this Court to consider the same. It was in this background that the aforesaid applications are filed. The Company has also, along with one application, filed scheme of reconstruction/revival. The matter was taken up on the basis of the said scheme of rehabilitation from time to time when this Court was informed about the settlement arrived at by the Appellant company with various unsecured creditors. Almost all the secured creditors settled the matter with the company except IDBI. Today, we are informed that the Company has been able to arrive at a settlement even with IDBI. Learned Counsel appearing for IDBI confirms this decision and states that he has received instructions in this behalf on telephone by his clients, thus, he is not aware about the terms.

Be that as it may, in view of the aforesaid development, namely, the company been able to settle with all the secured creditors, we recall our order dated 27th January, 2010 dismissing this appeal. As a consequence, order dated 12th December, 2003, passed by the Company Judge directing winding up of these companies are also set aside.

The company has to make payment to various creditors in terms of settlement arrived at with them. Though, some creditors are fully satisfied, however, in respect of some creditors dues are fully not paid. As far as IDBI is concerned a sum of Rs. 25 lakhs has been paid. As per learned Counsel for the Company, balance amount of Rs. 2.05 crores is yet to be paid since the dues of IDBI were settled at Rs. 2.35 crores.

Learned Counsel for the IFCI also stated that the Company is yet to pay interest on the delay claimed. Ms. Purnima Sethi, learned Counsel for Official Liquidator (''OL'') also claims that a sum of Rs. 11 lakhs is payable by the OL to the security agency which was engaged to save goods. The property after this decision was taken over by OL and the liability is also to be discharged by the Company, in addition the charges of the OL are also to be satisfied. As far as satisfaction of the claims of 6 crores is concerned, this aspect can be looked into by the learned Company Judge. We may note that the workers have supported the scheme of restoration/rehabilitation which is placed on record by the executive management. They claim that it is in their interest that company gets revival as early as possible so that it starts production which will enable the workers to get their wages at the earliest.

All the aforesaid applications and appeal, are accordingly, disposed of with the following findings:

OL shall de-seal the premises and hand over the same to the management of the Appellant Company within two weeks, however before the possession of the Assessee company are handed over to the management all the dues of the OL shall be settled/paid. The OL shall inform the dues payable within two days.

It would be open to the learned Company Judge to give directions for payment of dues of different creditors and further directions as may be required in view for the rehabilitation/restoration as promulgated by the management of the company.

During the pendency of this appeal, the Appellant had deposited Rs. 1.50 crores in a fixed deposit, out of which a sum of Rs. 15 lakhs has already been released to Regional Provident Fund Commissioner. The IDBI shall be paid a sum of Rs. 1.30 crores out of this amount by the Registry. Out of the balance amount, dues of OL shall also be settled. In case there is any deficiency, the same shall be met by learned Company Judge.

We are informed that the matter is coming up before learned Single Judge on 3rd May, 2011. It would be open to the learned Single Judge to pass any other order and given any direction in the matter.

A copy of this order be given dasti to learned Counsel for the parties under the signature of Court Master.