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TMI Blog2010 (1) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... te buyers at a commission to be settled by the court. M/s. Engineers and Valuers collaboration referred to hereinabove should also be contacted for this purpose. The applicant who is the lessor in this case is also expected to render adequate assistance to the official liquidator in finding an appropriate buyer so that the plant and machinery can be sold at an appropriate price for the benefit of all the creditors of the company in liquidation. - C.A. NO. 283 OF 2006 BIFR NO. 520 OF 1992 - - - Dated:- 15-1-2010 - GIRISH CHANDRA GUPTA, J. Asutosh law and A.K. Ray for the Union of India. Subol Moitra and Mrs. Keya Bhattacharya for the E.S.I. Corporation. Mithua Sen and Mukti Ghosh for the Official Liquidator. S.C. Prosad for the Provident Fund Authority. Ranjan Deb, Soumen Sen, Ravi Asopa and Susanta Pal for the Parties. JUDGMENT Girish Chandra Gupta, J. Lansdowne Jute Co. Ltd., originally incorporated on June 30, 1904, under the Indian Companies Act, 1882, under the name and style of the Arathoon Jute Mills Ltd., was renamed Birds Jute and Exports Ltd., in the year 1971. Birds and Co. P. Ltd., a wholly owned subsidiary of Birds Jute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office rooms, assistants' quarters, staff quarters and quarters for mazdoor comprise of an area of 7,50,000 sq.ft. approximately held on long lease which however has already expired. The aforesaid landed property situate at Dakhindari Road which lies in between Ultadanga and Laketown on the way to Netaji Subhash Chandra Bose airport is a very valuable property. At a very conservative assessment value of the said 7,50,000 sq. ft. is Rs. 75 crores at the rate of Rs. 1,000 per sq. ft. The actual value of the land may be more but this is the minimum price that I can think of taking judicial notice of the rate of land prevailing in the city of Kolkata. ( b ) The registered office of the company in liquidation is situate at premises No. 4. Netaji Subhash Chandra Bose Road, Kolkata-1, which is the commercial hub of this city near the Reserve Bank of India which originally was also a lease held land with the right to sublet as would appear from the deed of lease dated December 18, 1962, a copy whereof is an annexure to the affidavit affirmed by Pammi Gupta and Siddharta Roy on January 8, 2008, filed in C.A. No. 27 of 2008. The relevant clause reads as follows : "That the lessee shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not charged in favour of the bank. The said letter dated November 25, 2005, is a part of annexure A appearing at page 63 of an affidavit affirmed by Shri Sanjay Chatterjee on behalf of the official liquidator in C.A. No. 641 of 2007. (B) From an affidavit affirmed by Shri Dilip Kumar Sarkar on behalf of the Employees' State Insurance Corporation in C.A. No. 291 of 2008 it appears that a sum of Rs. 1,89,58,216 is due and payable by the company in liquidation to the Employees' State Insurance Corporation inclusive of interest and damages calculated up to July 30, 2008. (C) From an affidavit affirmed by one Shri Ashim Kumar Chakraborty on behalf of the Regional Provident Fund Commissioner, West Bengal, affirmed on April 9, 2008, in C.A. No. 299 of 2008 it appears that on April 24, 2006, an affidavit in proof of debt amounting to Rs. 7,02,880.95 was filed and a further affidavit in proof of debt was filed on July 26, 2007, for an amount of Rs. 64,04,291. (D) From an affidavit affirmed by Shri S.N. Mukherjee, the company secretary of Bharat Bhari Udyog Ltd., which is the holding company of the company in liquidation, on July 10, 2008, in C.A. No. 291 of 2008 it appears that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability on account of rental alone shall be a further sum of Rs. 15 lakhs on account of principal approximately. Interest is payable statutorily at the rate of 8.75 per cent, per annum. (H) It appears from an affidavit of Shri Gautam Sengupta affirmed on August 16, 2007, in C.A. No. 641 of 2007 that an amount of Rs. 4,29,757 is due and payable to the Eastern Security Services Company on account of guarding charges of the registered office up to June, 2007 which includes a sum of Rs. 78,960 on account of guarding charges for the factory premises. It appears that by an order dated February 21, 2005, passed in C. A. No. 118 of 2005 the responsibility of guarding the factory premises was assigned to the secured creditor the UCO Bank and the official liquidator is now required to provide security only to the registered office. It is for providing security to the registered office that the aforesaid claim was made and further claims are accruing continuously. 5. This is the picture which I have been able to collate from various pleadings filed by various parties in various matters, brief particulars whereof are as follows : (1) By a judge's summon dated May 2, 2006, an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judge's summon dated January 9, 2008, taken out by Sandip Agarwalla, an advocate on behalf of Coldgold Syntex P. Ltd., and Standard Chartered Bank, an application registered as C.A. No. 27 of 2008 was made praying for the following reliefs : "Leave be given to the Official Liquidator, High Court, Calcutta, as liquidator of the said company (in liquidation), to disclaim the tenanted areas comprising of a portion of the first floor, a portion of the second floor, a portion of the third floor, one room and two lavatories on the second mezzanine floor and one room on the ground floor of premises No. 4, Netaji Subhash Road, Kolkata-700 071 of the said company (in liquidation). The Official Liquidator, High Court, Calcutta as liquidator of the said company (in liquidation), be further directed to deliver possession of the entire tenanted portions of the said company (in liquidation) as mentioned hereinabove." (4) By a judges' summon dated April 2, 2008, registered as C.A. No. 272 of 2008, taken out by Messers L.P. Tewari Co., on behalf of Messers Consortium Enterprises P. Ltd., an application praying, inter alia, for the following reliefs was made : "Direction be given to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Dutta, Paresh Chandra Roy and Dilip Kumar Chakraborty in C.A. No. 620 of 2008 an application was made praying, inter alia, for the following reliefs : "Permanent stay of the order of winding up dated July 27, 2004 ; The scheme formulated by respondent No. 4 being annexure C herein be sanctioned by this hon'ble court in respect of Bharat Process and Mechanical Engineers Ltd. (in liquidation) on such terms and conditions as to this hon'ble court may deem fit and proper; Injunction restraining respondent No. 1 and/or its men, agents and servants and each of them from taking any step or any further steps with regard to the winding up of Bharat Process and Mechanical Engineers Ltd. (in liquidation) in any manner whatsoever and/or giving effect or any further effect to the order of winding up dated July 27, 2004; Respondent No. 1 be directed to make over all assets and properties of Bharat Process and Mechanical Engineers Ltd. (in liquidation) to the applicants forthwith; Liberty be granted to the applicants to enter into negotiations for settling the claim of respondent No. 2; Liberty be given to respondent No. 4 to purchase the shares held by respondent No. 3 in Bhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPG Equity Management Company shall initially invest a sum of Rs. 40 lakhs which in phases shall be increased to Rs. 4 crores, 1,00,000 sq.ft. of land has to be leased out to them. 50 per cent. of the principal amount due to the UCO Bank shall be paid over a period of five years. From an affidavit affirmed on behalf of the UCO Bank by one Shri Rakesh Kumar Ghosh, it appears that they have agreed to accept a sum of Rs. 50 lakhs whereas dues appear to be more than Rs. 4 crores. 10 per cent. of the statutory dues is proposed to be paid within a period of five years, 30 per cent. of the dues of the unsecured creditors is proposed to be paid within a period of 10 years. Neither the statutory creditors nor the unsecured creditor shall be paid any interest. The shares of the holding company are sought to be purchased at Re. 1 each but the holding company by way of an affidavit has expressed its refusal to sell its share. The dues of the workers shall be paid over a period of three years without any interest. It has been alleged in the application that the applicants have the support of all the workers but there is no evidence with regard thereto. C.A. No. 620 of 2008 10. This is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misfeasance or of irregularity demanding investigation, (7) a firm and accepted proposal for satisfying all the creditors must be before the court with material particulars, (8) the jurisdiction for stay can be used only to allow in proper circumstances a resumption of the business of the company, (9) the court is to consider whether the proposal for revival of the company is for the benefit of the creditor but also whether the stay will be conducive or detrimental to commercial morality and to the interest of the public at large, (10) before making any order the court must see whether ex-directors have complied with their statutory duties as to giving information to the official liquidator by furnishing the statement of affairs, and (11) any other relevant fact which the court thinks fit to be considered for granting or not granting the stay having regard to the peculiar facts of a particular case." 12. The Supreme Court in the case of Meghal Homes P. Ltd. v. Shree Niwas Girni K.K. Samiti reported in [2007] 139 Comp. Cas. 418 ; [2007] 7 SCC 753, paragraph 47 opined as follows (page 441) : ". . . the court has necessarily to see whether the scheme contemplates revival of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any further consideration. 15. Another reason why neither of these schemes can be accepted is the fact that the lessor of the immovable property where the factory of the company is situate is itself a sick company and there is an order of injunction dated July 6, 1999, passed by the BIFR by which Birds Jute and Exports Ltd. has been restrained from alienating any of its assets without the approval of the BIFR. Considering that the lessor Birds Jute and Exports Ltd., itself is a sick company which is also a Government company, it would only be fair that the entire lease-hold premises where the factory of the company in liquidation is situate be disclaimed so that the valuable property may be sold or otherwise fruitfully exploited, so as to improve the financial health of that Government company rather than acceding to the prayers of these ' investors who have applied for revival of the company but the real intention, I apprehend for reasons already discussed, is to eat up the fruits of the winding up at the cost of the large body of the creditors. The lessor Birds Jute and Exports Ltd., has applied for direction upon the official liquidator to disclaim the property as already i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, Ministry of Heavy Industries and Public Enterprises on July 25, 2008, in C.A. No. 291 of 2008 stating, inter alia, that all the employees of the company in liquidation have been relieved and further stating that the proposals for revival of the company have to be viewed in the light of the opinion expressed by the BIFR and the AAIFR. They are the expert bodies on the subject and they were of the opinion that there was no scope for any revival. I do not think that the submissions made by Shri Dipak Kumar Chaudhury are without justification. On the contrary the views expressed by the BIFR and the AAIFR are of great value in the sense that they emanated from expert bodies on the subject. The company in liquidation was a Government company. When the Central Government could not revive the company it would amount to day dreaming that the applicants in these three cases would succeed in doing what the Government of India could not do. 18. I however propose to dispose of those applications by my orders to be passed separately for the reasons discussed herein. The application being C.A. No. 283 of 2006 therefore succeeds. The prayers made therein have already been indicated above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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