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TMI Blog2005 (12) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is that New Jahangir Vakil Mills (for short NJVM) (in liquidation) is one of the units of Gujarat State Textile Corporation Limited (for short GSTC) (in liquidation) since 6-2-1997. GSTC was incorporated on 30-11-1968 and it was fully owned Company by the State Government and it was incorporated mainly with an object of carrying on its business of Textile Mills and managing any such business or undertaking of any person or Company entrusted to it, either by the Central Government or by the State Government. The other object of the Company was to acquire and undertake the whole or any part of the business, property, assets and liabilities of any person, firm or company carrying on textile business. The Company was also formed with a view to take and run as an unemployment relief or otherwise any textile mill in Gujarat State, which was closed or likely to be closed, or has gone into liquidation or otherwise. NJVM became a part of a Unit of GSTC by virtue of the provisions of the Gujarat State Textile Undertakings (Nationalization) Act, 1986. The said Act provided for nationalization of total four Textile undertakings of which one was NJVM. Although the ordinance was promulgated o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 5. Upon winding up order having been passed, statement of affairs was filed by the Director of GSTC before the Official Liquidator and the symbolic possession of all the textile mills units and head office have been taken over by the Official Liquidator at the relevant time. 6. Company Application No. 16 of 2000 is filed by the applicant, namely, 21st Century Developers praying for confirmation of sale in favour of the applicant of the entire assets comprised in lot No. 3 of M/s. New Jahangir Vakil Mills (in liquidation), a Unit of M/s. Gujarat State Textile Corporation Limited (in liquidation) as per the auction proceedings held on 17-1-2000 subject to such terms and conditions as may be deemed fit and proper and imposed by this Court. The applicant has also prayed for the permission to post security guards at its own expenses within the premises of M/s. New Jahangir Vakil Mills (in liquidation), subject to such terms and conditions as may be deemed just and proper and imposed by the Court. 7. Company Application No. 26 of 2000 is filed by one Mr. Rajabhai K. Kangadh praying for the acceptance of the applicant s offer for purchase of all assets including land, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 248, dated 12-1-1931 over which there is a building and the factory premises of New Jahangir Vakil Mills, Bhavnagar (in liquidation). The applicant has also prayed for quashing and setting aside the auction held on 16-2-2000 by the order of this Court in O.L.R. No. 3 of 2000. The applicant has further prayed for handing over the possession of the said properties to the applicant on winding up of the Company. 12. Company Application No. 257 of 2000 is filed by the applicant, namely, Satishbhai Chavda praying for quashing and setting aside the action of the Official Liquidator of initiating auction of the land occupied by the New Jahangir Vakil Mills, Bhavnagar (in liquidation). 13. Company Application No. 52 of 2002 is filed by the State of Gujarat seeking impleadment of State of Gujarat, through Collector, Bhavnagar as party to the proceedings of Company Application No. 186 of 2000 and seeking an audience in the said matter. The applicant-State of Gujarat has also prayed for the declaration that the Official Liquidator has no power or authority to sell by public auction or otherwise the land belonging to the applicant situated in City Survey No. (1)7, Sheet No. 166, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment which the Official Liquidator owes to the Government to the tune of Rs. 889.86 crores for discharging the liabilities towards all the dues of the Gujarat State Textile Corporation (now in liquidation). The applicant-State has also prayed for the stay against the Official Liquidator from taking any further action pursuant to the order passed by this Court on 6-2-1997 in Company Petition No. 205 of 1996 in respect of disposal of properties and/or to deal with the assets and properties in any manner whatsoever. 17. Company Application No. 268 of 2004 is filed by Mill Kamdar Union seeking direction to the Official Liquidator to release the unpaid wages of the members of the applicant-Union, who are the workers of M/s. New Jahangir Vakil Mills (in liquidation) for the period commencing from 1-10-1994 to 30-9-1996 as directed by the Industrial Tribunal, Bhavnagar in Review Application Reference (IT) No. 19 of 1995 dated 27-9-1996, for which the claim has been filed by the Union before the Official Liquidator on 12-1-2000 along with the order passed by the Tribunal. The applicant-Union has also prayed for the direction to the Official Liquidator to pay the amount of Provident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the statement of affairs submitted to the Official Liquidator and the liabilities of the labourers have been fully discharged as per the record available. So far as the immovable properties of New Jahangir Vakil Mills is concerned, the superstructure is existing and the plants and machineries were sold to one M/s. Vicky Traders. Over and above the existing superstructure, there is huge portion of land admeasuring 65,890.23 Sq. Mts. The valuation was carried out by the Collector, Bhavnagar through its valuation machinery and it has come to Rs. 42,13,44,000. The major amount of liabilities of GSTC is only of the Government and the Government is the major creditor which has been paid approximately an amount of Rs. 826.79 lakhs until the order of winding up was passed on 6-2-1997. The State Government has moved an application earlier being Company Application No. 348 of 1997 for taking over the assets of all the 17 Units which were nationalized and vested with the GSTC. However, since the matter could not be settled at the relevant time due to non-co-operative attitude of the Secured Creditors, namely, Banks and other financial institutions, the entire idea was dropped by the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d if there is any case of any isolated dispute which may be pending before the Court and if any liability arises upon GSTC, the State Government takes this responsibility to discharge an obligation as and when it arises in future. 25. Since the Official Liquidator has filed O.L.R. No. 72 of 2005 and asked for strict proof, affidavit was filed on behalf of the State Government on 11-7-2005. It was stated therein that the State Government has sought for analysis of the statement of affairs submitted by GSTC dated 6-5-1997. Shri Suketu Trivedi, a Chartered Accountant, has submitted report re-garding liability of the Mill. The Chartered Accountant has discussed the liabilities of the Mills Company at three stages (1) Pre-taking over period (prior to acquiring lease rights from OL) (2) Post-take over period (subse-quent to acquiring lease rights from OL) (3) Post Nationalization period (period subsequent to Nationalization). During all these three periods, liabilities were created by the New Jahangir Vakil Mills while in operation. However, the liability created by the New Jahangir Vakil Mills during the first period i.e., Pre-Take over period which was prior to its having any sor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institution fully owned by the State Government. The liability towards deferred dues of taxes aggregating to Rs. 1,08,19,033 is due to State Government/various departments of State Government. Thus, out of the total liability for Post Nationalization management period, Rs. 9,13,283 is due to other creditors which is to be liquidated out of the assets of the undertaking. The State Government has also paid through GSTC an amount to the tune of Rs. 11.66 crores to pay the terminal benefits of all the employees of the undertaking immediately before winding up of the Company. 27. Thus, the total liabilities of both the periods aggregating to Rs. 453.40 lakhs, the liability of Bank to the tune of Rs. 149.93 lakhs is already discharged by the State Government. Out of the remaining unpaid dues of Rs. 303.47 lakhs, Rs. 126.14 lakhs are due to State Government towards rates and taxes and Rs. 10.48 lakhs are due to a wholly owned State Government Undertaking. The amount of unclaimed workers dues to the tune of Rs. 3.22 lakhs will have to be deposited to Labour Welfare Fund with the Social Welfare Department of State Government. The dues of CCI to the tune of Rs. 146.18 lakhs are being se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 31. Mr. A.L. Shah, learned advocate appeared for the Official Liquidator and he has also submitted after due deliberation and discussion with the Official Liquidator that since the State Government has discharged the liabilities of the Mills Company towards Secured Creditors and labourers and there is still surplus fund available with the Official Liquidator in the account of GSTC and since the State Government has undertaken to discharge the liability, if any, which may arise in future, the Official Liquidator has no objection in handing over the possession of the properties in question to the State Government. 32. In the above view of the matter and looking to the entire facts and circumstances of the case and considering the various contentions raised from time to time and the reports submitted including the report of the Chartered Accountant, the Court hereby directs the Official Liquidator to hand over the possession of the properties in question of the New Jahangir Vakil Mills (in liquidation) to the State Government as the State Government is the only Secured Creditor and sole shareholder of the Company in liquidation. The State Government is, however, directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Company Application Nos. 44 186 of 2000 moved by Bhavnagar Municipal Corporation are concerned, since the submissions have been made that there are inter se disputes and the same would be resolved amicably, the Court has not gone into the merits of these two applications and accordingly, these two applications stand disposed of. 37. As far as O.L.R. No. 3 of 2000 is concerned, since the sale of plant, machinery, furniture/fixtures, office equipments, spares, scrap and misc. items of the Mills Company has been confirmed by this Court in favour of M/s. I.B. Enterprise, nominee of M/s. Vicky Trading and immovable property of the Company is decided to be handed over to the State Government, O.L.R. No. 3 of 2000 does not survive and it is accordingly disposed of. 38. As far as O.L.R. No. 23 of 2004 is concerned, this Court has passed two orders earlier on 5-5-2004 and 20-7-2004. Pursuant to the order passed by this Court on 20-7-2004, the Official Liquidator has filed further report on 9-8-2004 seeking direction from this Court as to whether he should accept the claim of Rs. 1,48,307 against the total loss and/or damages of Rs. 98,57,500 assessed by the Executive Engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were no longer employees of the Corporation, they could not work for the Company. It is further stated in the said affidavit-in-reply that the Union has claimed the wages for the period from 1-10-1994 to 30-9-1996 during which time they have not rendered their services to the Company and, therefore, the principle of no work no pay would be applicable to them. The Mill Company has not taken work from these 97 workers who were the workers of the loom shed department of the Mill Company and since May 1994, the loom shed department was closed. It was done after taking the respective Union in confidence and, therefore, the question of non-acceptance of retrenchment compensation by 97 workers did not arise. It is further stated that at this juncture, when the Mill Company is not in existence and the Corporation who took over the management of the Mill Company is also not in existence, these 97 workers cannot claim salary for the period for which they have never worked. 41. In any case, the petition is still pending before this Court and hence, it is not necessary to pass any order in this application. It is open for the applicant-Union to move this Court after the aforesaid Speci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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