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TMI Blog1983 (10) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a period of five years. The rest of 50% liabilities have to be treated as wiped off. The company was incorporated in the year 1960 for doing the business of manufacture and dealings in electrical equipments. It has its business premises in Connaught Place, New Delhi. The company is otherwise close-knit with Jaswant Singh as its managing director and his wife, Mohinder Kaur, as director. The shareholders are relations or friends. The subscribed capital is Rs. 1,30,000. It is averred in the petition that the company had to face considerable difficulties from the very inception. In the year 1963, it was said to have been defrauded by a concern known as "Blood Bank" of Rs. 47,000. Subsequently, there were disputes between Jaswant Singh an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar. They opposed the scheme. Since Jaswant Singh and the other creditors from whom he held the proxy were creditors to the extent of Rs. 1,65,737 as against the amount of Rs. 24,000 due to the other four, the scheme was declared to have been approved by a majority of creditors claiming more than 75% of the amounts. It was thereafter that the present petition (C.P. No. 119 of 1978) was moved by the company for sanction of the scheme as approved by the shareholders and the creditors. Along with this, annexure "C" has been attached giving the details of the creditors and the loans taken by the company. They total Rs. 33,581 and Rs. 62,076 respectively. The same shows that the main creditor (Rs. 26,851) is Jas Electric and Mfg. Co. which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermed as a device to cheat them. The company, it is pointed out, has been running regular business in Connaught Place, New Delhi, and as per annexure "A" attached with the petition, its yearly net profit since 1975 onwards ranges between Rs. 20,000 and Rs. 30,000. At present, the respondents have got the goods of the company attached in execution of their decrees, but the company managed to get the winding up petition moved from a collusive creditor, namely, M/s. Unico Engineers, to whom a small amount of Rs. 557.93 only was due. The respondents claim that they are the genuine creditors, and that the so-called creditors have been set up collusively to defeat their claims. It may also be mentioned that Shri Rameshwar Dass Gupta, proprietor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition within seven days of the filing of the report by the chairman. In fact, such a petition, after the approval of the scheme by the shareholders and the creditors, does not require any further instructions or investigation, and it is as such that a short period of seven days has been prescribed under the Rules. That apart, this petition is liable to be rejected on another ground. The proviso to section 391 (2) of the Companies Act lays down that no order sanctioning any compromise or arrangement shall be made by the court unless the court is satisfied that the company has disclosed to the court all material facts relating to the company such as the latest financial position of the company, the latest auditor's report on the accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss premises of the company is located in Connaught Place which is one of the most sought after commercial areas. The managing director has also been away to the Middle East running business there, and the circumstance that he has been there for quite some time corroborates the contention of the respondents that he has good business there. Rather the respondents have asserted that the modus operandi adopted by the company has been to pass on the profitable dealings to the directors individually and saddle the company with unprofitable transactions. The company at present is admittedly making profits and there is, therefore, no justifiable reason to allow it to disown these small claims of about Rs. 20,000 of these three bona fide creditors. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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