2010 (9) TMI 1279 - HC - Indian Laws

Summary

Issues Involved:
1. Direction for convening meetings of creditors and other stakeholders for considering the Scheme of Arrangement/Compromise.
2. Validity and feasibility of the proposed Schemes by the applicants.
3. Interest of the applicants in purchasing the land of the company in liquidation.
4. Compliance with the Supreme Court's interim order regarding the revival of the company.
5. Objections raised by other parties including co-owners and lessors.

Detailed Analysis:

1. Direction for Convening Meetings:
The applicants sought the Court's direction to convene meetings of Secured Creditors, Statutory Creditors, Workmen, Unsecured Creditors, and other Creditors of Omex Investors Private Limited (in Liquidation) to consider and approve a Scheme of Arrangement/Compromise. The Court noted that such applications are typically decided ex-parte and without delving into the merits of the Scheme at this preliminary stage. However, the Court also recognized that in certain cases, it may refuse to issue such directions if it deems it inappropriate or not in the public interest.

2. Validity and Feasibility of the Proposed Schemes:
The Court observed that the Company had been in liquidation since 1989, with all movables, plant, machinery, and building structures already disposed of. The remaining asset was the land, which the applicants were interested in acquiring. The Court found that the applicants had no genuine interest in reviving the Company but were instead interested in acquiring the land at a throwaway price. The Schemes proposed by the applicants were deemed neither real, genuine, nor bona fide. The Court emphasized that the applicants' primary interest was in the land, not in the revival of the Company.

3. Interest of the Applicants in Purchasing the Land:
The Court noted that the applicants were primarily interested in purchasing the land of the Company in liquidation. The applicant in Company Application No.97/2010, being the sponsor of the Scheme, wanted the land for expanding its existing business of manufacturing industrial valves. The applicant in Company Application No.191/2010 wanted the land for ready-made garment business and construction activities, including developing an Industrial Park. The Court found that the applicants' interest in the land was the main driving force behind the proposed Schemes.

4. Compliance with the Supreme Court's Interim Order:
The applicant in Company Application No.191/2010 cited an interim order by the Supreme Court, which suggested that an attempt should be made to revive the defunct Company. However, the Court noted that the Supreme Court's order was passed on 18.11.2009, while the present application was filed in July 2010, indicating a delay. The Court also highlighted that the applicant had not disclosed the sponsor's name and lacked the necessary funds to implement the Scheme.

5. Objections Raised by Other Parties:
The Scheme proposed by the applicant in Company Application No.97/2010 was opposed by the applicant in Company Application No.191/2010 and other co-owners. The objections included the lack of feasibility and genuineness of the Scheme, as well as the applicant's lack of resources and the opposition from other lessors. The Court found that the objections were valid and that the Scheme proposed by the applicant in Company Application No.191/2010 was not workable.

Conclusion:
The Court concluded that no directions were required for convening the meetings of creditors/shareholders/workers of the Company (in liquidation) as prayed for in the respective Company Applications. The Court found that the Schemes proposed by the applicants were not genuine and were merely a ruse to acquire the land at a throwaway price. The Court directed the Official Liquidator to put the freehold land of the Company to sale, fixing the upset price at Rs. 150 Crores and issuing public advertisements to invite offers from intending purchasers. The applications were disposed of as rejected.