2002 (2) TMI 1235 - HC - Companies Law

Summary

Issues Involved:
Company application under Sick Industrial Companies (Special Provisions) Act, 1985 to wind up the company based on BIFR opinion.

Analysis:
The judgment pertains to a company application filed under the Sick Industrial Companies (Special Provisions) Act, 1985, based on an opinion of the Board for Industrial and Financial Reconstruction (BIFR) to wind up the company. The BIFR opinion was recorded on 17-8-2001, prompting the registration of the company application. Notices were issued to the company and IFCI to show cause as to why the company should not be wound up. Despite sending the notices, no acknowledgment or undelivered cover was returned. The respondent-company appeared through its representative, Sri C.N. Tewary.

The company had previously filed a reference under section 15(1) of the Act, leading to the sanctioning of a rehabilitation scheme in 1996. However, during a review in 1999, it was found that the existing promoters had failed to implement the sanctioned scheme adequately. Efforts for rehabilitation were unsuccessful, leading to the issuance of notices for a change of management. The monitoring agency, I.F.C.I., was directed to conduct a Techno Economic Viability Study (TEVS) and estimate the market value of assets. Despite no progress towards rehabilitation and lack of funds from the promoter, the Board formed a prima facie opinion to wind up the company.

During the hearing, various parties, including IFCI, IDBI, Bank of India, Union Bank of India, and Rajasthan State Mines & Minerals Ltd., expressed no objection to the winding up of the company. The company itself acknowledged its inability to infuse more funds and lack of responses to the advertisement for co-promoters. The BIFR concluded that the company was liable to be wound up, a position supported by the Managing Director's affidavit. Consequently, the Court accepted BIFR's opinion and ordered the winding up of Ganges Fertilizers & Chemicals Ltd., appointing the Official Liquidator to proceed with liquidation in accordance with relevant laws.

In conclusion, the judgment reflects a comprehensive analysis of the company's financial position, failed rehabilitation efforts, and the just and equitable decision to wind up the company in the public interest based on BIFR's opinion and the company's own acknowledgment of its financial constraints.