9911796707
TMI Blog2008 (9) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... hile these proceedings were pending, C.A. No. 387 of 2006 has been preferred by Ashwani Kumar, son of Padam Kumar Jain, one of the promoters and shareholders of the company (in liquidation) under order 9, rule 13 of the Code of Civil Procedure for setting aside the ex parte order dated March 23, 2006, whereby this court ordered the sale of the movable and immovable assets of the company (in liquidation) in absence of the applicant. Two more C.A. Nos. 815 of 2007 and 682 of 2007 have been filed for recalling the winding up order dated January 16, 2004. Simultaneously, another C.A. No. 364 of 2006 was preferred seeking stay of the operation of the winding up order. In this C.A. the company court passed order dated May 18, 2006, which reads as under : "Mr. Suri states that on receipt of Rs. 25 lakhs, the petitioner has settled his claim and has no objection if the winding up order is recalled. Learned counsel for the petitioner-creditor further states that the petitioner shall withdraw the complaints filed by him under section 138 of the Negotiable Instruments Act and C.P. No. 418 of 2002. Mr. Malik, learned counsel representing the former management states that the management is rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the EPCG Scheme for manufacture and export of fabrics and garments. It is one of the scheduled industries specified in the First Schedule at Sr. No. 23, sub-heading (1), under the heading of Textiles under the IDR Act, 1951. The company has been established in joint sector with PSIDC as a co-promoter. The private promoters are qualified and experienced in international marketing and manufacturing. The company has established the most advanced and high tech plant to manufacture and produce the world class fabric. The renowned buyers of the world like Gap Inc., USA, Timberland, USA, Champion, USA, Hartstring, USA and Dockers, USA are some of the buyers who have assured to purchase the products of the company. In sum and substance, the contention of the applicant is that the company in liquidation is a potentially viable, but sick unit. The company has secured loan from IDBI as also the working capital credit from Canara Bank. It is alleged that the petitioner company M/s. Winsome Textiles Industries Limited has filed the petition for winding up on the basis of the disputed claim, but due to ex parte order, the winding up of the company has been ordered. It is the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to July 11, 2003 and then to September 5, 2003 and thereafter to September 12, 2003. The company remained unrepresented and the petition was admitted on October 31, 2003. The order of admission was duly published in The Indian Express (Chandigarh edition) and Dainik Tribune as also in the Government Gazette. In C.A. No. 387 of 2006, the only ground for setting aside the ex parte order dated March 23, 2006 is that the applicant came to know about the proceedings in the Company Petition No. 416 of 2002 on April 22, 2006, when the sale notice was published in The Tribune, Chandigarh and prior to that the applicant had no knowledge of the winding up proceedings. In the application itself, the applicant has referred to the winding up order dated January 16, 2004. No prayer has been made for setting aside the admission order dated October 31, 2003 and the winding up order dated January 16, 2004. However, two more applications have been presented being C.A. Nos. 682 of 2007 and 815 of 2007 seeking recalling of the winding up order dated January 16, 2004. In C.A. Nos. 815 of 2007 and 682 of 2007, it is averred that the applicant settled their debt with the original petitioner M/s. Winsom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to recall the winding up order. In the case of R. Ganesha v. H.R. Engineering Works [1995] 82 Comp. Cas. 250 (Kar.), it has been observed that where the company is in a position to pay its debts and no other creditors have come up in support of winding up, it is appropriate that the order of winding up be recalled. In the case of Meghal Homes (P.) Ltd. v. Shree Niwas Girni K.K. Samiti [2007] 139 Comp. Cas. 418 ; AIR 2007 SC 3079, the hon'ble Supreme Court made following observations (page 434 of 139 Comp. Cas.) : "The argument that section 391 would not apply to a company, which has already been ordered to be wound up cannot be accepted in view of the language of section 391(1) of the Act, which speaks of a company which is being wound up. If we substitute the definition in section 390(a) of the Act, this would mean a company liable to be wound up and which is being wound up. It also does not appear to be necessary to restrict the scope of that provision considering the purpose for which it is enacted, namely, the revival of a company including a company that is liable to be wound up or is being wound up and normally, the attempt must be to ensure that rather than dissolving a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court or the company court can go into the said questions relating to the liability and the recovery except as provided in the Act. . ." It is further argued that it is also within the exclusive domain of the Tribunal to adjudicate upon the counter claim and set-off. Reliance is placed upon the case of Mudit Entertainment Industries (P.) Ltd. v. Banaras State Bank Ltd., AIR 2000 All. 181 ; [2001] 105 Comp. Cas. 572 (All.) wherein following observations have been made (page 577 of 105 Comp. Cas.) : "12. The Tribunal is not merely an executing authority to recover debts as claimed by the bank or financial institutions. The Tribunal is enjoined with the duty to decide the debts due to the bank. Taking into account the entire scheme and modalities, the Tribunal, while adjudicating the claim of the banks or the financial institutions, has to take into account the cause shown by the debtor as required under sub-section (3) of section 19. Such cause could include the counterclaim and set off of the debtor as put forth against the claim of the bank. The Tribunal, having regard to the cause as shown, has to decide the liability of the debtor and if the debtor succeeds, the Tribunal has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e affirmed and another chance be given to the company to survive. Applying the aforesaid principles emerging, the case of the applicant, ex-management is to be examined. Admittedly, the claim of the M/s. Winsome Textiles Industries Ltd., the original petitioner in the winding up petition in C.P. No. 416 of 2002 has been paid. The liquidation expenses of the official liquidator also stand paid. However, there is huge liability towards the two secured creditors, i.e., IDBI through the SASF and the Canara Bank, although both the secured creditors have initiated recovery proceedings before the Debts Recovery Tribunal. Nevertheless, the liability is that of the company in liquidation. One of the secured creditors, namely, Canara Bank, has assumed the role of the petitioner in the winding up petition on its transposition as the petitioner therein meaning thereby that now the present liquidation proceedings are deemed to be at the instance of the Canara Bank in view of the order dated November 16, 2006, passed in C.A. No. 650 of 2006. The debt of the Canara Bank is unpaid as on date. Although the ex-management has raised counter claim before the DRT and the counter claim as also the liab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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