2000 (8) TMI 1052 - HC - Companies Law

Summary

Issues:
1. Recall of winding up order against M/s. Srishti Video Corporation Limited.
2. Agreements with creditors for repayment of debts.
3. Consideration of settlement proposals with secured creditors.
4. Stay of winding up proceedings under relevant sections of the Companies Act.

Detailed Analysis:

1. The judgment deals with an application by M/s. Srishti Video Corporation Limited seeking the recall of a winding up order dated August 16, 1999. The company, through its promoters and managing directors, presented agreements with creditors who had filed winding up petitions, proposing to settle their debts. The application was supported by detailed affidavits outlining the agreements and payments made towards debt settlement. The court directed notice of the application to secured creditors for consideration.

2. The company had entered into agreements with various creditors, such as M/s. Orchid Securities Limited, Raunaq Finance Ltd., Times Guarantee Finance Ltd., Magma Leasing Ltd., J. G. Finance Ltd., PICUP, Syndicate Bank, and IIBI, for repayment of debts. The documents submitted included settlement deeds, affidavits signifying no objection to revival, and proposals for one-time settlements. The court noted that certain payments had been made, and further payments were scheduled upon the company's revival.

3. The court considered submissions from representatives of the secured creditors, including PICUP, Syndicate Bank, and IIBI, who indicated that settlement proposals were under consideration, and they did not oppose the company's revival. The official liquidator confirmed taking possession of company assets post winding up order and making realizations. The court, invoking relevant sections of the Companies Act, decided to keep the winding up order in abeyance, given the proposed settlements with creditors and no opposition to the company's revival.

4. Citing sections 466(1) and 447 of the Companies Act, the court ordered the winding up order to remain in suspension until further orders. Creditors were granted liberty to approach the court if the company defaulted on settlements. The official liquidator was directed to return possession of assets, hold realizations in a fixed deposit pending further orders, and report compliance within a specified timeline. The application seeking recall of the winding up order was disposed of accordingly.