2002 (2) TMI 1240 - HC - Companies Law

Summary

Issues:
1. Company application for winding up based on BIFR opinion under Sick Industrial Companies (Special Provisions) Act, 1985.
2. Notices issued to respondent-company and IFCI for show cause.
3. Declaration of company as Sick Industrial Company, actions by operating agency, and decision for winding up.
4. Acceptance of BIFR opinion by the Court for winding up and appointment of official liquidator.
5. Directions for official liquidator regarding sale of company's assets and further proceedings.

Analysis:
1. The company application for winding up was initiated following the opinion of the Board for Industrial and Financial Reconstruction (BIFR) under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR's opinion, recorded on 26-9-2001, recommended winding up of the company due to non-revival and absence of response from promoters.

2. Notices were duly issued to the respondent-company and IFCI to show cause as to why the company should not be wound up. Despite sending notices via registered post A/D, the acknowledgment due or undelivered cover was not returned, leading to the notice being deemed sufficient under the Court rules.

3. The company was declared a Sick Industrial Company by BIFR under section 3(1)(o) of the Act, with IFCI appointed as the operating agency. Various actions were taken, including attempts for change of management, reports of promoters disposing of assets, and the company remaining closed. The BIFR formed a prima facie opinion to wind up the company, considering the promoters' disinterest and absence of response to rehabilitation efforts.

4. The Court, based on the BIFR's opinion and the circumstances presented, accepted the recommendation for winding up. Chandra Synthetics Ltd. was directed to be wound up, with the official liquidator appointed to oversee the process in accordance with the Companies Act, 1956 and Companies (Court) Rules, 1959.

5. The official liquidator was tasked with informing IFCI about the winding up order and the status of asset sale as directed by BIFR. Instructions were provided for handling the sale proceeds, depositing sale consideration, and taking charge of unsold assets for further proceedings as per the relevant legal provisions.

This comprehensive analysis outlines the legal proceedings leading to the decision for winding up the company, the roles of the BIFR, operating agency, and official liquidator, along with the necessary directions for asset management and liquidation in compliance with the applicable laws.