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TMI Blog2010 (1) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... . Garg for the Official Liquidator. ORDER 1. This application has been presented under section 466 of the Companies Act, 1956 ( the Act of 1956 ) read with rules 147, 148, 159, 163 and 167 of the Companies (Court) Rules, 1959 (hereinafter referred to as the Rules of 1959 ) by the applicant, Podar Finance Private Limited, a Company incorporated under the Act of 1956, having its registered office at Podar Centre, 85, Parel Post Office Lane, Mumbai, seeking permanent stay of the liquidation proceedings of the Company (in liquidation); directing the Official Liquidator to furnish to the applicant the details and Photostat copies of the uninvited claims, if any, received by the Official Liquidator with regard to Jaipur Spinning and Weaving Mills Limited (hereinafter referred to as the Company (in Liquidation) ); further to invite claims under rule 147/148 of the Rules of 1959 and furnish to the applicant the details of the such claims; to adjudicate the claims received pursuant of notice issued by the Official Liquidator in accordance with rule 163 of the Rules of 1959 and provided opportunity of hearing to contest the claims; to file a list of Creditors of the Company in L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the State Bank of India and placed before the Court the valuation report received from the Bank vide Company Application No. 33/2006. The Court on Company Application No. 07/2007 filed by the Official Liquidator directed the Official Liquidator, vide order dated 23-2-2007, to once again take the task of valuation and to conduct public auction in respect of the said leased property. The Official Liquidator vide Company Application No. 33/2007 submitted the Draft Tender Notice and the terms and conditions of sale of leased out land measuring 47349 square meters which were approved by the Court vide order dated 20-7-2007 in respect of the leased property. Pursuant thereto, the Tender Notice was issued which came to be published in Dainik Bhaskar on 8-8-2007. The reserved price fixed by the Official Liquidator was Rs. 118 crores. 6. At this stage, Mr. Ajay Podar, Ex Director of the Company (in liquidation) intervened expressing his right to revive the company and to pay off all the Creditors of the Company (in liquidation) and bring it out of liquidation. The Official Liquidator did not file details of all the creditors of the Company (in liquidation). The Court vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (in liquidation) as on the date of winding up order has been placed on record. The application is further not maintainable as the application is outside the scope of section 391 of the Act of 1956. The applicant has neither made out any case for staying winding up proceedings nor his request made in prayer clause 11( b ) and ( c ) is governed by provisions of section 466 of the Act of 1956. It is also stated that the applicant has not shown any cause of action on account of which the present application is moved seeking permanent stay of liquidation proceedings. It is also stated that the application is not maintainable for the reason that the plant and machin- ery of the Company (in liquidation) has already been sold by giving wide publication in Newspapers i.e., Times of India and Rajasthan Patrika in the year 1984-85 and at that time the applicant never raised any objection that either he wants to revive the Company (in liquidation) or to pay the creditors according to the settled list of the Creditors by the Official Liquidator. 11. It is also stated that the winding up proceedings have already been completed and payment to the Secured Creditors and workers to some e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mala fide intentions of the applicant to save the subsequent transferees. It is further stated that after winding up of the Company (in liquidation) all the requirements under rules 147, 148, 149, 159, 163 and 169 of the Rules of 1959 have been complied with. The claims were invited from creditors of the Company (in liquidation) through wide publication in Newspapers Times of India , Rajasthan Patrika (Hindi Edition) and Rajasthan Patrika (English Edition) on 2-1-1985, 24-12-1984 and 23-12-1984 respectively. 14. It is stated that individual notices were also issued pursuant to rule 147 of the Rules of 1959 to the creditors whose information was available with the Official Liquidator. The claims received from the creditors were admitted/rejected and intimation to that effect was furnished in Form Nos. 69 and 70. The dividend has also been declared/paid pursuant to rules 275 and 276 of the Rules of 1959. Rule 174 is not applicable on the company which stood wound up by this Court. It is further stated that the Official Liquidator has already invited claims and paid dividend which were settled as per the provisions of rules 147, 148, 149, 159, 163, 167, 169, 275 and 276 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the tenders invited for sale of the land has been sought to be stayed without even a murmur in the application in respect of this land. The litigation on the face of it, therefore, appears to be mala fide and malitious. 18. It is made out from the record that the requirement of the rules 147, 148, 149, 159, 163, 167, 169, 275 and 276 of the Rules of 1959 have been complied with. The claims of the creditors, workers and others whose information was available with the Official Liquidator were invited and received. The claims so received were considered by the Official Liquidator in terms of the Rules of 1959 which have been accepted and rejected as the case may be. The payment has been made to the workers and others without payment of interest and the claimants are pressing for payment of interest also which may run into crores. 19. It is not made out by placing evidence before the Court that the applicant has invested in the Company (in liquidation) as pleaded with regard to 1,63,550 equity shares of the face value of Rs. 10 each. The Official Liquidator has also produced Balance Sheets of the applicant Company which were filed with the Registrar of Companies from the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of the settled list of the creditors. Similar dispute with regard to seeking stay of the winding up proceedings was subject-matter in case title Mahabir Prasad Agarwala v. Askaran S. Singh 1980 Tax LR NOC 150. The Court while dealing with this situation held as under : "Therefore, from the above principles which have been summarized in different authorities and the decision referred to hereinbefore it appears that the discretion for stay under section 466 can only be exercised by the Court (1) if the Court is satisfied on the materials before it that the application is bona fide ; (2) the Court would be guided by the principles and definitely come to the finding that the principles are applicable to the facts of a particular case; (3) mere consent of all the creditors for stay of winding up is not enough; (4) that offer to pay in full or make satisfactory provisions for the payment of the creditors is not enough; (5) Court will consider the interest of commercial morality and not merely the wishes of the creditors and contributories; (6) Court will refuse an order if there is evidence of misfeasance or of irregularity demanding investigation; (7) a firm had accepted propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favourable order. But the conduct of the petitioners particularly the Ex-Directors and management of the company although seems to be dubious, wrongful and illegal and violative of the provisions of the Companies Act, 1956. The duty cast on the Court as it appears from the principle laid down in the above authorities and by the cases cited seize to be very responsible one, the matter has to be very seriously and carefully examined from all aspects particularly in the light of the conduct of the ex-management and the applicant before the Court for stay of winding up petition. As I have already discussed above I have no doubt in my mind that the applicants who were some of the Ex-Directors have adopted various contrivances to hang on other properties and deprive the creditors of their legitimate dues only to carry on business in illegal, dishonest manner and absolutely lacking in commercial morality. It is also the further duty of the Court from the Socio-Economic point of view to eradicate dishonest and corrupt management of the company affairs and to set up a healthy atmosphere in the industry, particularly the Jute Industry which is foreign exchange earner and passing through a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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