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2014 (7) TMI 841 - HC - Companies LawCompany under winding up proceedings - application for revival of the company - Locus standi of the applicants - applications for convening meetings of creditors to consider their respective schemes of arrangement for revival of the company. - Held that - In the case of a company which is being wound up, it would be binding on the company and its contributories. - There is no question of invocation of Section 391 of the Companies Act, 1956 because the Official Liquidator has not come up with any application requesting the court to convene a meeting of creditors or members of the company. - This section makes it explicit that in the case of a company being wound up a meeting can only be convened at the instance of the Official Liquidator. The section does not say that an application may be made by the Official Liquidator also . It just says Official Liquidator , so as to exclude all other persons including creditors and contributories. The scheme proposed by the applicant is equally unimpressive. No fund is brought into the company. Nothing is shown how the mill would be re-opened and run. There is no market survey, projection of sales etc.. Only tall promises are made in the scheme, for payment to creditors. LOCUS STANDI - Held that - None of the applicants, who made applications for convening meetings of creditors for the purpose of consideration of their respective schemes for revival of the company, impressed me with regard to their locus standi. - The applicants who held themselves out to be the creditors of the company could not furnish any proof of the company s debt towards them. No evidence of supply of goods like delivery receipts, challans, contract papers etc between them and the company were produced before the court. Ownership of shares - transfer of shares after order of winding up - Held that - in the case of winding up any disposition of shares after commencement of winding up shall be void unless otherwise ordered by the court. - If the transaction is void there is no value of the shares certificates. Neither can it be said that the property in the shares has passed. The transferee gets no title. Equally flawed is the argument that the transferors in such cases are trustees for the transferees. If the transfer is void ab initio the relationship of trustee and beneficiary does not arise. Therefore, all these arguments fail. - all applications dismissed.
Issues Involved:
1. Application for stay of the winding up order and appointment of a Special Officer. 2. Application for validation of equity shares purchased post-winding up. 3. Application for referring the matter back to BIFR for considering the revival scheme. 4. Application by workers' union to intervene in the winding up petition. 5. Application for providing security services to the company's assets. 6. Examination of the schemes proposed for the revival of the company. 7. Locus standi of the applicants proposing revival schemes. Detailed Analysis: 1. Application for Stay of the Winding Up Order and Appointment of a Special Officer: Hilton Vinimay Pvt. Ltd. (C.A. 145 of 2009) applied for a stay of the winding up order and the appointment of a Special Officer to transfer 3,11,664 equity shares purchased from the Poddar Group. They also sought a general meeting to constitute the Board of Directors with the Special Officer as Chairman to frame a revival scheme. The court emphasized the need for genuine efforts to revive companies in liquidation but found the scheme lacking immediate infusion of funds and deemed the promises unrealistic. 2. Application for Validation of Equity Shares Purchased Post-Winding Up: Hilton Vinimay Pvt. Ltd. (C.A. 326 of 2009) sought validation of 3,11,664 equity shares purchased after the winding up order. The court noted that any transfer of shares post-winding up without court sanction is void under Section 536(2) of the Companies Act, 1956. The court refused to validate the transaction, emphasizing the void nature of such transfers. 3. Application for Referring the Matter Back to BIFR: Hilton Vinimay Pvt. Ltd. (C.A. 314 of 2009) requested the matter be referred back to the BIFR for considering their revival scheme. The court found the scheme lacking in immediate fund infusion and credible evidence of financial resources, rendering it impractical for revival. 4. Application by Workers' Union to Intervene in the Winding Up Petition: Gourepore Jute Mill Shramik Union (C.A. 975 of 2010) sought to intervene in the winding up petition to stay the order and constitute a Board of Directors. The court acknowledged the workers' support for reopening the company but found the proposed schemes lacking in feasibility and immediate financial backing. 5. Application for Providing Security Services to the Company's Assets: Ashray Vyaapar Private Limited applied for permission to provide security services to the company's assets. The court acknowledged Ashray's agreement to bear security expenses but highlighted the lack of funds with the Official Liquidator to pay outstanding security expenses. 6. Examination of the Schemes Proposed for the Revival of the Company: The court examined various schemes proposed by Hilton Vinimay Pvt. Ltd., Sprint Communication Pvt. Ltd., Sohanlal Chandanmull & Co., Jupiter International Ltd., and Dolphin Vintrade Pvt. Ltd. The court found all schemes lacking in immediate fund infusion, credible financial backing, and practical plans for restarting the company's operations. The schemes were deemed unrealistic with mere promises and no substantial foundation for revival. 7. Locus Standi of the Applicants Proposing Revival Schemes: The court scrutinized the locus standi of the applicants proposing revival schemes. None of the applicants could furnish credible proof of the company's debt towards them. The court emphasized the need for evidence of supply of goods or services to support their claims. The assignments of debts were found insufficiently stamped and dubious. The court concluded that none of the applicants had the necessary locus standi to propose revival schemes. Conclusion: The court dismissed all applications for convening meetings of creditors to consider revival schemes, finding them lacking in merit and bona fide elements. The court directed the Official Liquidator to proceed with the winding up of the company expeditiously, ensuring security services with expenses borne by Ashray to be reimbursed as winding up expenses. The court refused any stay on the winding up process, emphasizing the need for swift completion.
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