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TMI Blog1998 (7) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... court. An application (A-9) has now been filed by the applicant, Bengani Food Products Private Limited of Calcutta, stating that they have entered into a lease agreement with respondent No. 2 and has prayed that the same may be approved by this court under section 536(2) of the Companies Act, 1956, and appropriate directions as made in the prayer be issued. In the said application, the applicant has impleaded the official liquidator as respondent No. 1, Indian Maize and Chemicals Limited as respondent No. 2, the Karamchari Sangh as respondent No. 3, ICICI, IDBI, IFCI as respondents Nos. 4, 5 and 6, the Punjab National Bank, Central Bank of India as respondents Nos. 7 and 8, U.P. State Electricity Board as respondent No. 9 and Infrastructure Leasing and Finance Limited as respondent No. 10. The official liquidator has filed a counter-affidavit in which it has been stated that the proposal given by the applicant may be beneficial and in the interest of the company and the same can be considered by this court. However, a condition can be imposed that the applicant will execute an undertaking and will not dispose of any of the assets of the company. Respondent No. 2 has also suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2 was about Rs. 47 crores and the proposal given by the applicant was a collusive one to circumvent the winding up proceedings and to siphon off the assets. The total electricity dues was about Rs. 50 lakhs and the application of respondent No. 2 for restoration of the electricity connection was rejected by respondent No. 9 and, even the Hon'ble Supreme Court refused to stay the recovery instituted by respondent No. 9. Consequently, it was prayed that the application be rejected. The applicant has filed rejoinder affidavits to the aforesaid counter-affidavits filed by the respondents. I have heard Shri R.P. Agrawal, learned counsel for Bengani Food Products Private Limited (applicant), Shri Vivek Chawdhary for respondent No. 2, Shri K.P. Agrawal for respondent No. 3, Shri O.P. Mishra for respondents Nos. 4, 5 and 6, Shri K.L. Grover for respondent No. 7, Shri Sharad Varma for respondent No. 8 and Shri Sunil Ambwani for respondent No. 10. Learned counsel for the applicant has placed the terms and conditions of the lease agreement and had contended that the applicant would be paying a sum of Rs. 60 lakhs per annum at Rs. 5 lakhs per month as lease rent, part of which could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the interest of every one to preserve the company as a going concern. In support of the above proposition advanced by him, he has referred to certain decisions which are noted below: (1) Prasad Mills Ltd. v. Parikh Agencies [1986] 60 Comp Cas 727 (Guj). (2) Aryodaya Spinning and Weaving Co. Ltd., In re [1986] 60 Comp Cas 897 (Guj). (3) Siddhpur Mills Co. Ltd., In re [1987] 61 Comp Cas 756 (Guj). (4) Punjab Maize Products Ltd. (In liquidation), In re [1996] 1 Comp L] 253 (P H); [1998] 94 Comp Cas 757 . (5) Wearwell Cycle Co. (India) Ltd. (in Liquidation), In re [1994] 1 Comp LJ 219 (Delhi); [1998] 94 Comp Cas 723 (Delhi). (6) Champaran Sugar Mills Co. Ltd., In re [1998] 91 Comp Cas 182 (All). (7) J. Sengupta P. Ltd (in liquidation), In re, AIR 1962 Cal 405. I have also carefully considered the second submission made by learned counsel and the aforesaid decisions cited by him. The observations made in the said cases were on the peculiar facts of the respective cases. It is well-settled that the effort of the court should be to preserve the company as a going concern provided the proposition is viable and there is prospect of the company to be put on the rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 50 crores. Against that, the applicant-company has come up with a proposal to take the factory of respondent No. 2 on lease on payment of Rs. 60 lakhs per annum for a period of three years. The said amount would not be even 2 per cent, of the total dues of respondent No. 2. The contesting respondents have strongly opposed the present application and have stated that the same appears to be collusive and not in the interest of the creditors and the real purpose being to delay the winding up proceedings. It has also been pointed out before the Appellate Authority that respondent No. 2 had mentioned about the proposal being given by the applicant to take the factory on lease and to run the same, however, the Appellate Authority had also not accepted the said submission. In the writ petition filed before this court against the recommendation of the BIFR, the applicant was one of the petitioners. However, subsequently, it withdrew from the writ petition and has filed the present application before this court. Having given my anxious consideration to the matter, I am of the view that in the facts of the present case and also in view of the huge amount of dues against respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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