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TMI Blog1974 (7) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... Works, having their office at Tavdipura, Ahmedabad. The said firm claims itself to be a creditor of the mills-company to the tune of Rs. 1,41,000. The scheme has been opposed at the initial stage of issuing directions on the summons being taken out mainly by the two secured creditors, namely, the Gujarat State Financial Corporation and the State Bank of Saurashtra. On behalf of the Corporation as well as the State Bank of Saurashtra, affidavits-in-reply to this application have been filed and they have opposed any orders being issued by this court for convening the meeting of the shareholders and creditors for consideration of the scheme contending, inter alia, that the scheme is neither reasonable nor practi-cable of being implemented a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, advertised the sale of the assets in the various newspapers and the advertisements have appeared in the newspapers all over India. The last date for receiving the tenders is 15th July, 1974, which on receipt, shall be placed before this court on 16th July, 1974, that is, to-morrow. The tenderers are required to remain present at the time of opening of tenders so as to enable them to raise their offers. The official liquidator has for the purposes of advertisements incurred expenses to the extent of Rs. 6,000 by way of advertisement charges. The invitation of offers for the purchase of this unit together with the valuation report has been circulated with the terms and conditions of sale to 32 Chambers of Commerce and Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of Saurashtra, one Arvindray Chimanlal Parikh has filed an affidavit-in-reply opposing the scheme at an initial stage. The amount of Rs. 4,95,000 is due to the State Bank of Saurashtra under the various accounts of the mills-company with them. ****** In In re Alabama, New Orleans, Texas and Pacific Junction Railway Company [1891] 1 Ch D 213 (Ch D) , the relevant principles which the court has to bear in mind in connection with the sanction to be granted, have been laid down succinctly. The court was considering the scheme at the final stage, whether the sanction to the scheme as approved and adopted by the meeting of the shareholders and creditors should be accorded or not. However, the principles which are to be borne in mind h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to convene meetings of creditors and shareholders to consider the scheme. The court, has, therefore, to consider whether the scheme as proposed is reasonable and practicable of being implemented. The two secured creditors, namely, Gujarat State Financial Corporation and the State Bank of Saurashtra, are opposed to this scheme. The total value of the said two secured creditors would be in the vicinity of about Rs. 22 lakhs to Rs. 23 lakhs out of the total value of Rs. 40 lakhs. It is, therefore, clear to me that to give directions to convene the meeting of the creditors would be an exercise in futility, inasmuch as the creditors of the value of more than 1/2 of the total value of the creditors are opposing the scheme. It would never be a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra and the Gujarat Industrial Investment Corporation. At that time also the scheme was seriously opposed by the secured creditors and by the Gujarat Industrial Investment Corporation. And this court by its order of 26th June, 1972, discharged the notice as the scheme at the notice stage was seriously opposed by the secured creditors and by the Gujarat Industrial Investment Corporation and in the opinion of the court no useful purpose would be served by calling a meeting. The scheme was also found to be unworkable. Mr. Shah has given me a short summary of what were the broad features of the scheme which were rejected by this court at that time and also the broad features of the present scheme. It appears on perusal of these features that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm loan would also meet with the same fate and the Bank has opposed it. To suggest that they must allow the hypothecation and pledge account to be satisfied and to agree to the creation of a second charge in its favour is a proposal, which I do not think that the Bank can agree to. The proposal in respect of the labour is also equally objectionable. To suggest that they should agree to waiver of compensation under section 25-FFF of the Industrial Disputes Act, and notice pay and gratuity only in consideration of the recommencement of the mills could not be received favourably by the workers. A discrimination made between the workmen and the clerical staff in the matter of repayment of their dues is also one, which cannot be appreciated. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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