2010 (12) TMI 1065 - HC - Companies Law

Whether such tea undertaking can be restarted? Held that - In considering the case under section 16E(1) the Central Government is to consider the ability of the applicant shareholder before me, Gopinath Das holding 75.6 per cent. shares in the company, to restart the tea estate by himself or with other contributors, creditors and so on. This consideration must be with reasons.After such consideration is complete and report prepared the Tea Board may apply to this court by way of a fresh application for orders for formal handing over of the tea estate to any person or body of persons selected by it for running the estate. The winding up order will remain but all steps in winding up are to remain suspended till further orders. No sale of any asset of the company in liquidation is to be made or any steps taken for such sale till further orders of this court. No disbursement to any creditor or contributor should be made till further orders of this court.

Summary

Issues:
1. Application by Tea Board under the Tea Act, 1953 for taking over a tea estate.
2. Application by a shareholder for staying the winding up of the company and exploring possibilities for revival.

Analysis:
1. The judgment considered an application by the Tea Board under the Tea Act, 1953, following an order of the Supreme Court directing the Central Government to carry out statutory duties concerning abandoned tea estates. The Tea Board sought permission to take over the Dheklapara Tea Estate and hand it over to a private entrepreneur selected through an expression of interest process. Another application by a shareholder requested a stay on the winding up of the company, exploring revival options, and preventing the sale of assets by the official liquidator.

2. The provisions of the Tea Act, particularly sections 16B, 16C, and 16E, were crucial in determining the course of action. Section 16B(2) allows the Central Government to investigate the possibility of running or restarting a tea undertaking being wound up by the court. Section 16E(1) empowers the Central Government to appoint persons to take over a tea garden in specific circumstances, without prejudice to other provisions of the Act.

3. The judgment highlighted the importance of fulfilling conditions precedent for the exercise of powers under the Tea Act. It emphasized the need for the Central Government to form an opinion in the public interest before making investigations or appointing individuals to manage a tea estate. The Supreme Court's order underscored the necessity of compliance with the Tea Act, guiding the court's decision-making process.

4. The judgment concluded by directing the Central Government to conduct an investigation into the tea estate, considering the ability of the shareholder holding a significant portion of shares to participate in the revival process. It suspended winding-up proceedings, asset sales, and creditor disbursements until further court orders, outlining a structured approach for the Tea Board to apply for formal handing over of the estate in the future.