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2001 (12) TMI 809 - HC - Companies Law
Issues:
Company application under Sick Industrial Companies (Special Provisions) Act, 1985 - Winding up of the company. Analysis: The High Court of Allahabad received an opinion from the Board for Industrial and Financial Reconstruction under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The court issued notice to the company, but the notices were returned as the office was locked. The court observed that the company initially responded to the notice but later absented itself from the proceedings. Despite efforts to reach the company, including a public notice, no one appeared on behalf of the company. The court deemed the service to have been effected on the company as per court rules. Upon reviewing the Board's opinion, it was found that the company was declared a Sick Industrial Company in 1999. The operating agency, Bank of Baroda, was appointed to assess the company's viability and formulate a rehabilitation scheme. However, the company failed to submit proposals within the stipulated period, even after extensions. The agency highlighted deficiencies in the proposals and the company did not address them. The Board concluded that the company was not serious about rehabilitation and lacked the resources to mobilize funds. It was determined that the company was not likely to recover and should be wound up under section 20(1) of the Act. No objections were raised against the Board's opinion, leading the court to direct the winding up of the company. The Official Liquidator was appointed to take over the company's assets and accounts in accordance with the Companies Act. Additionally, the court appointed UPFC as the operating agency to sell the company's assets and distribute the proceeds as per the Companies Act. The Official Liquidator was instructed to issue a notice to UPFC to hand over the assets and stop any ongoing sale proceedings without court permission. A report was to be submitted by the Official Liquidator within four weeks regarding the status of the assets and accounts.
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