2015 (1) TMI 1414 - HC - Companies Law

Winding up of the company - Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 - Held that - Since, none of the secured creditors objected to winding up of the company, namely, M/s Electronic System Punjab Limited, the recommendation made by BIFR is hereby accepted - Accordingly, the company, namely, M/s Electronic System Punjab Limited is ordered to be wound up. The Official Liquidator is appointed as Liquidator of the company and he is directed to take over the charge of the records, moveable and immovable assets of the company. Let notice of the winding up be published in the newspapers namely, Indian Express (English) and Dainik Bhaskar (Hindi) both Punjab editions and in the Official Gazette of Government of Punjab.

Summary

Issues:
1. Winding up recommendation by BIFR for M/s Electronic System Punjab Limited (ESPL).
2. Acceptance of winding up recommendation by secured creditors.
3. Appointment of Official Liquidator and publication of winding up notice.

Analysis:
1. The judgment pertains to the winding up recommendation made by the Board for Industrial and Financial Reconstruction (BIFR) for M/s Electronic System Punjab Limited (ESPL) under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR recommended the winding up of ESPL, leading to the legal proceedings in the High Court.

2. The secured creditors, namely Punjab Financial Corporation, Punjab State Industrial Corporation Ltd., Indian Overseas Bank, and State Bank of India, did not object to the acceptance of the recommendation made by the BIFR for winding up of ESPL. Counsel representing the secured creditors explicitly stated their non-objection to the winding up of the company. Indian Overseas Bank had already filed a petition before the Debt Recovery Tribunal (DRT) for the debt due to the bank.

3. In light of the lack of objections from the secured creditors, the High Court accepted the recommendation made by BIFR for the winding up of M/s Electronic System Punjab Limited. Consequently, the company was ordered to be wound up, and the Official Liquidator was appointed as the Liquidator of the company. The Official Liquidator was directed to take over the charge of the company's records, moveable, and immovable assets. Additionally, the court ordered the publication of the winding up notice in newspapers such as 'Indian Express' and 'Dainik Bhaskar,' along with the Official Gazette of the Government of Punjab. The responsibility for the publication was assigned to the State Bank of India, the operating agency before BIFR.

Overall, the judgment concluded by disposing of all other applications as they had become infructuous in light of the decision to wind up M/s Electronic System Punjab Limited as per the recommendation of the BIFR and the acceptance by the secured creditors.