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TMI Blog1994 (12) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act, 1956. The petitioners are the unsecured creditors of Kapil Agro Limited to the extent of Rs. 1,80,000 which amount has been lent and advanced by them from time to time. The petitioners are also entitled to interest at the rate of 12 per cent. per annum on the said advance. The statement of account of Kapil Agro Limited (exhibit "A" to the petition) for the period ending March 31, 1990, reflects that a sum of Rs. 1,80,000 is due to the petitioners. It transpires that Kapil Agro Limited was declared a sick unit under the Sick Industrial Companies (Special Provisions) Act, 1985, and a revival scheme was proposed by way of amalgamation of Kapil Agro Limited with Pudumjee and Company Limited. This revival scheme was placed before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nasmuch as the petitioners were required to receive the amount under a package scheme which was required to be implemented in toto. Being unsecured creditors, they cannot claim a preference over the secured creditors and on that count the company challenged the right of the petitioners to issue the notice or to file the petition. So far as the company is concerned, it transpires that Kapil Agro Limited became a sick unit by the order dated April 4, 1989, passed by the BIFR. By order dated July 27, 1989, the State Bank of India was appointed as the operating agency to submit the scheme of revival of the sick company, Kapil Agro Limited. The scheme contained various terms and conditions. The BIFR, by their order dated May 8, 1990, consented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce the rate of interest on the term loans by 2 per cent. points ; to waive all penal interest, damages and charges, to fund the amount of interest and certain benefits as set out therein. Reference is required to be made to the viability clause which is required to be taken into consideration for considering whether the scheme was viable for the company. The said "viability" clause reads as under : "Viability. On the basis of production plan proposed by FPC, the projected profitability of KAL is given in annexure II. Projected profitability statement in respect of the amalgamated company and projected balance-sheet of KAL as well as amalgamated company are given in annexures III to V. The working sheet in respect of debt service cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company may be wound up by the court. Clause ( e ) of section 433 of the Companies Act stipulates that if the company is unable to pay its debts, the company may be wound up by the court. Clause ( f ) of section 433 stipulates that if the court is of the opinion that it is just and equitable that the company should be wound up, the company may be wound up. So far as this petition is concerned, the question that arises is as to whether the amalgamated company, Pudumjee Agro Industries Limited, can be wound up merely on the basis that a notice of demand was sent and that they have failed to pay the amount. So far as the respondent-company is concerned, it is not that the respondent-company is in financial straits or that it is unable to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidelines for the purpose of finalising the scheme which, in terms, clearly specifies that the scheme should be for a period of 7 to 10 years. In pursuance of and in consonance with these guidelines at the time when the draft scheme was submitted, the question of viability was also taken into account which also, in terms, specified that the amalgamated company will be able to service its entire debt over a period of ten years which is supported by the document in annexure "5" which in terms provides that so far as the payment of unsecured creditors is concerned, the same is to be cleared by 1997-98. Therefore, it is not open to the petitioners to contend that the respondent-company was liable to pay the amount immediately upon the scheme be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the industrial company referred to is Kapil Agro Industries Limited and not the amalgamated company. By virtue of the fact that the company has been amalgamated with the respondent-company, Kapil Agro Limited ceases to have an independent entity. Therefore, so far as section 22 of the Sick Industrial Companies (Special Provisions) Act is concerned, the same is not applicable to the respondent-company. It is, therefore, not open to the respondent-company to contend that the petitioners are not entitled to file proceedings for winding up inasmuch as the proceedings for winding up is not in respect of Kapil Agro Limited, but it is in respect of the amalgamated company. However, so far as the petition is concerned, in the light of my above d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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