9911796707
TMI Blog2003 (11) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... wards working capital facilities. The consortium consists of State Bank of India, Bank of Baroda, Canara Bank, Union Bank of India, State Bank of Indore, Corporation Bank, ABN Amro Bank N.V.,Central Bank of India, Standard Chartered Bank, Bank of India, HDFC Bank and Barclays Bank. As of 31st March, 2002, an amount of approximately Rs. 250 crores is stated to be outstanding from the company to the consortium. The outstandings of the intervenor, State Bank of India, are estimated at Rs. 79 crores exclusive of interest. Apart from this, it has been averred that a comprehensive restructuring proposal was prepared by the company and has been submitted by the Bank to the financial institutions. The State Bank of India has granted its in-principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it by any sufficient evidence. The words "relating to the winding up of a company," used in sub-section (1) of section 557 are broad enough to comprehend within its purview the stages of admission and of the final hearing of a Company Petition for winding up. Therefore, as a matter of statutory interpretation, the right of the creditors to appear and be heard in all matters relating to the winding up of a company is recognised by law. That right to appear and be heard comprehends the stage of admission as well. 3. There can be no gainsaying the fact and the order passed by the Company Court admitting a petition for winding up by itself has serious consequences for a Company. An order of admission seriously affects the market position of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2600, the Supreme Court was considering a case where after a petition for winding up came to be accepted and, at the stage of admission, a large number of creditors of the company appeared to oppose the petition for winding up. A learned Single Judge of this Court refused to wind up the company and directed it to deposit the disputed amount of Rs. 72,556.02 with a consequential direction for institution of a suit. The judgment was affirmed in appeal by a Division Bench of this Court. The principle in so far as the intervention of creditors is concerned was formulated in para 22 of the judgment of the Supreme Court thus : "Another rule which the Court follows is that if there is opposition to the making of the winding up order by the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 211, T.P.S. Chawla J. was of the view that the creditors who are inclined to oppose a petition for winding up are not entitled to be heard at the stage of admission. Relying upon the provisions of Rule 96 of the Companies Rules, 1959, the learned Judge held that the creditors would be entitled to be heard after the petition has already been admitted but, there is no rule which envisages that anyone other than the company may be heard to oppose the admission of the petition. With great respect. I must hold that it is not possible to accept this view. The circumstance that there is no rule which envisages that the creditors may be heard to oppose the admission of a petition does not interpose any bar to the Company Court even at the stage o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the intervenor, State Bank of India, are estimated at Rs. 79 crores exclusive of interest. Apart from this, it has been averred that a comprehensive restructuring proposal was prepared by the company and has been submitted by the Bank to the financial institutions. The State Bank of India has granted its in-principle approval by a letter dated 19th April, 2003 for the acceptance of the restructuring package by other members of the consortium. State Bank avers that care has been taken to protect the interest of the petitioners, of the workers and of the banks and financial institutions. On these averments made by State Bank of India and in view of similar averments made by other creditors, the applications for intervention must be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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