AI Structured Summary
Not yet generated for this judgment
Judgment
K.A. Puj, J.—The Official Liquidator has filed OLR No. 24 of 2003 upon winding up order passed by this Court on 18.02.2002 in Company Petition No. 103 of 1998. Several prayers were made by the Official Liquidator in the said report and several orders were passed by the Court from time to time. Some of the prayers were considered by this Court.
During the pendency of this report, the Official Liquidator has filed Criminal Case No. 14 of 2002 u/s 454(5) of the Companies Act, 1956 against the Ex-Directors / accused requesting this Court to take cognizance of the default committed u/s 454(5) of the Companies Act, 1956 and to issue process against them and try and punish them in accordance with the provisions of law.
During the pendency of the said criminal case, one of the accused, namely, Kamal. S. Agrawal has filed Company Application No. 472 of 2007.this Court has considered in detail the facts stated and averments made in the said application and also gone through the documents furnished on the record of this Court and since the statement of affairs was filed before the Official Liquidator, this Court has disposed of Criminal Case No. 14 of 2002 on 22.11.2007. It was held by the Court that in view of the fact that Statement of Affairs was filed by the Ex-Director and in view of the further fact that the accused No. 2 has moved an application being Company Application No. 472 of 2007 praying for an order for holding a meeting with the Official Liquidator of the Company in liquidation for the purpose of considering, and to approve with or without modification, a Scheme of arrangement proposed to be made between the said Company and the Official Liquidator in view of the further fact that the accused No. 2 has paid substantial dues of the secured as well as unsecured creditors and has also undertaken to pay the dues of the statutory creditors, security charges and other expenses incurred by the Official Liquidator and there is possibility of revival of the Company, no useful purpose would be served to continue this Criminal Case against accused Nos. 2 and 3. The Court further observed that since sufficient compliance was made and Statement of Affairs was filed though belatedly, however, with genuine reason, the Court did not think it fit to impose any penalty looking to the facts and circumstances of the case.
As far as Company Application No. 472 of 2007 is concerned, during the pendency of the said application, the applicant has preferred Company Application No. 563 of 2007 and hence, no further order was passed in the said application and it was ordered to be heard along with Company Application No. 563 of 2007.
Company Application No. 563 of 2007 is filed by Shri Kamal S. Agrawal, Shareholder, Member and Ex-Director of the Company in liquidation praying for recalling of the winding up order dated 18.02.2002 passed in Company Petition No. 103 of 1998 as the outstanding statutory and other liabilities of the company in liquidation were paid by the applicant except the interest dues of the notified area Vapi and the outstanding dues of security charges payable to the Official Liquidator, which the applicant has undertaken to pay as per the direction of this Court.this Court has passed an order on 19.12.2007 directing the applicant to issue public advertisement stating therein that the applicant has moved Company Application No. 563 of 2007 for recalling of winding up order passed in Company Petition No. 103 of 1998 and if any one has any objection, he may raise the same on or before the returnable date i.e. 16.01.2008 so that after hearing the objectors, if any, appropriate orders can be passed on that day.
Pursuant to the said order, the applicant has issued advertisement in two newspapers, namely, Gujarat Mitra (Surat) and Indian Express (Ahmedabad / Surat) dated 31.01.2008 and affidavit of advertisement was filed on 22.02.2008 along with the relevant newspapers. The application is, therefore, taken up for hearing.
Mr. B. D. Karia, learned advocate appearing for the applicant has submitted that the applicant has filed detailed affidavit in support of the Judge''s Summons. He has further submitted that the Company in liquidation commenced its business of manufacturing of Dye-intermediates in the year 1988 after taking over business of M/s. Smita Dye-Chem Private Limited and its product, K-Acid (dye-intermediates) was having good demand for export at the relevant time. However, the Company was ordered to close down its production business in the year 1995 vide order passed by this Court in a Public Interest Litigation being Special Civil Application No. 14019 of 1995. Therefore, the Company had to stop its production from October 1995 onwards. He has further submitted that the Company had borrowed Working Capital facility of Rs. 32 Lacs and Term Loan of Rs. 9.5 Lacs from Central Bank of India, Walkeshwar Branch, Mumbai. However, due to stoppage of production and business of the Company in 1995, the Central Bank of India filed suit for recovery of Rs. 50.95 Lacs in the Bombay High Court, which was subsequently transferred to Debt Recovery Tribunal, Mumbai.
He has further submitted that Patan Cooperative Bank Limited filed Company Petition No. 103 of 1998 for winding up of the Company for recovery of its dues amounting to Rs. 2,83,757.16 in the Account of erstwhile Smita Dye-chem Private Limited, as the Directors of the Company in liquidation were unable to pay the debts of the Bank at the relevant time.this Court passed the winding up order on 18.02.2002. The Official Liquidator thereafter had taken possession of the immovable properties of the Company in liquidation situated at Vapi on 24.06.2002.
Mr. Karia has further submitted that the applicant has repaid all the liabilities / debts of secured and unsecured creditors of the Company in liquidation. The same are as under:
Central Bank of India had filed a suit for recovery in the High Court of Bombay for a sum of Rs. 50.95 Lacs which was thereafter transferred to Debt Recovery Tribunal at Bombay. A compromise was arrived at between the Company in liquidation and Central Bank of India and all the outstanding dues as per compromise have been fully paid to Central Bank of India. The Bank has issued No Due Certificate subject to demand for security and fire service charges of Rs. 3,18,720/- made by the Official Liquidator. No Due Certificate issued by the Bank is produced on the record of this application.
Dues of other Secured and Unsecured Creditors which appeared in the balance sheet as on 31.03.2001 are also satisfied in the following manner:
Patan Cooperative Bank vide letter dated 3.7.2006 has issued a No Due Certificate. Copy of the said Certificate is placed on record.
M/s. Fortis Financial Services Limited vide letter dated 03.09.2005 has cancelled all its H.P. Agreements on receipt of its dues. Copy of the letter dated 03.09.2005 along with copies of pay orders are placed on record of this application.
M/s. Alta Leasing & Finance Limited has entered into a consent term-cum-Memorandum of Understanding with the applicant for compromise of its dues. A copy of the said Memorandum of Understanding is also placed on record of this application.
In respect of outstanding dues of M/s. BASP Chemical Products Limited, the applicant has entered into a compromise in an Execution Application No. 394 of 2006, in the High Court of Judicature at Bombay to discharge its dues. A copy of the compromise along with copies of receipts issued by M/s. BAPS Chemical Products Limited is placed on the record of this application.
Mr. Karia has further submitted that there are certain trade Creditors and other Creditors, details of which are given in the application. The applicant has paid the said outstanding dues and copies etc. are placed on the record. Except the outstanding dues of the Notified Area pertaining to interest amounting to Rs. 56,011/- which are likely to be waived, and the dues towards security charges payable to the Official Liquidator, all other statutory and other liabilities of the Company in liquidation are discharged by the applicant. The applicant has undertaken before this Court to repay the outstanding dues of interest, if any, to the Notified Area Officer and the outstanding dues towards security charges to the Official Liquidator within stipulated time as may be ordered by this Court. Mr. Karia has, therefore, submitted that since there are no outstanding dues of the Company in liquidation, except as indicated above, the winding up order dated 18.02.2002 passed by this Court in Company Petition No. 103 of 1998 may kindly be recalled and revoked and the Company in liquidation is required to be revived which will create opportunity and prospects of generating job and utilizing the assets of the Company in liquidation for manufacturing of chemical dyes, as against its disposal and distribution.
Mr. Nitin Mehta, learned advocate appearing for the Official Liquidator has relied on the two reports filed by the Official Liquidator in Company Application No. 472 of 2007. In the report filed on 21.11.2007, it is stated that the applicant has complied with all the requirements including filing of statement of affairs and recording of the statement under Rule 130 of the Companies (Court) Rules, 1959 and based on this, subsequently, this Court has passed an order disposing of Criminal Case filed by the Official Liquidator. He has further submitted that another report was filed by the Official Liquidator on 19.12.2007 wherein it is stated that statement of affairs filed by the Ex-Director fulfilled all necessary requirements and the applicant had discharged all liabilities of the Company except the due interest of GIDC, Vapi with all documentary evidence and that nothing remains to be paid by the Company towards any dues or liabilities of the Company. As far as the dues on account of security charges are concerned, the applicant may be directed to deposit atleast an amount of Rs. 5 Lacs which can be appropriated by the Official Liquidator towards security charges and the applicant may be directed to file an undertaking before this Court that if there is any short-fall, the applicant will pay the balance amount to the Official Liquidator. However, if there is any surplus, after discharging the liability of the payment to the security charges, the surplus amount will be refunded to the applicant.
Having regard to the facts and circumstances of the case and after having heard learned advocates appearing for the respective parties, the Court is of the view that since the entire liability of the Company in liquidation has been discharged by the applicant and since nobody has raised any objection against recalling of the winding up order nor anybody has lodged his claim despite public advertisements issued in two leading newspapers and since the applicant has even otherwise shown his readiness and willingness to discharge the remaining liabilities, if any, there is very strong case for recalling and/or revoking the winding up order passed by this Court. Looking to the details given by the applicant in the present application with regard to the discharge of liabilities and the documents produced in support of the facts stated and averments made in the application, there is no justification to continue the winding up proceedings against the Company in liquidation. The Company is, therefore, required to be revived and accordingly, the winding up order passed by this Court is hereby recalled. Company Petition No. 103 of 1998 is restored to the file. Registry is directed to notify Company Petition No. 103 of 1998 on 25.03.2008 for passing appropriate order.
The applicant is directed to deposit a sum of Rs. 5 Lac with the Official Liquidator on or before 25.03.2008. The applicant shall also file an undertaking before the Court that he will deposit the said amount of Rs. 5 Lac with the Official Liquidator on or before 25.03.2008 and that he will discharge any liability that may arise against the Company in liquidation.
Subject to the aforesaid direction and observation, Company Application No. 563 of 2007 is accordingly disposed of.
Since Company Application No. 563 of 2007 is allowed and disposed of, Company Application No. 472 of 2007 and O.L. Report No. 24 of 2003 do not survive and they are disposed of accordingly.