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TMI Blog2008 (12) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... econsider the matter with regard to this fact as to whether the financial position of the company has improved. However, possession with regard to the property of the company will remain with the official liquidator till the matter is finally disposed of by the Board. After the matter is finally decided by the Board, if the Board comes to the conclusion that pos session should be delivered to the company in the interest of the parties, then it will be open for the Board to decide this question without seeking further direction from this court in this regard. - COMPANY APPEAL NO. 2 OF 2005 - - - Dated:- 2-12-2008 - B.C. KANDPAL AND DHARAM VEER, JJ. Rajeev Mehra and P.R. Mullick for the Appellant. A.K. Joshi and Sharad Sharma for the Respondent. M. C. Pant and R. K. Raizada for the Interveners. H. M. Raturi for the State. JUDGMENT 1. This company appeal arises from the order dated July 29, 2005, passed by the company judge of this court in Misc. Company Application No. 11 of 2001, Amitabh Textiles Mills Ltd. v. Board for Industrial and Financial Reconstruction, Finance Ministry Government of India, New Delhi and another. 2. The releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 999, gave a finding that there was no possibility of revival of ATML and dismissed the appeal and recommended the winding up orders of the BIFR to the High Court. The aforesaid opinion recommending the winding up of the company was referred to the Allahabad High Court in Company Case No. 1 of 1998 by the BIFR. Meanwhile during 2001-02 and 2002-03 Sri Sandhu Ram Gupta made changes in the board, inducting Sri Vijay Kumar Gupta, Sri Omkar Chand Garg, Sri Dinesh Jain and Sri O.P. Bhardwarj as co-directors so as to make efforts and take steps to provide necessary finances to assist the company to rehabilitate itself. But they did not bring in any need based capital funds for revival of the unit and some of them resigned on April 6, 2002. 3. Company Petition No. 1 of 1998 was subsequently transferred to this court and it was registered as Company Petition No. 11 of 2001. Upon notice to show cause as to why winding up proceedings may not be concluded as recommended by the BIFR, the managing director of the company Sri Sandhu Ram Gupta filed his objections in April, 2001, inter alia , pointing out that the only reason for the AAIFR dismissing the appeal was non-compliance to deposit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposit of an amount of Rs. 2,25,05,232.57 in full and final settlement of its claims. Similarly, upon clearance of one-time settlement amount arrived at with the IDBI, the same issued a no dues certificate dated March 16, 2005, confirming the receipt of an amount of Rs. 1,19,00,000 in full and final satisfaction of its claim against the company. The said scheme of compromise was made with the IDBI and PNB under section 391 of the Companies Act on the strength of the amounts provided by the said new promoters to the tune of Rs. 4 crores. The IDBI and PNB filed their consent for compromise and withdrawal of their cases in the Debts Recovery Tribunal, New Delhi after compromising for a settlement of Rs. 1.57 crores vide order No. 1088/DRT/II/UPC dated March 24, 2005. The appellant-company also approached the UPFC on June 12, 2005, for arriving at a one-time settlement requesting waiver of penal interest and other dues and requested them to make settlement on principal amount in interest free instalments. 6. It is the further case of the appellant that the new promoters also arranged the deposit of Rs. 3 lakhs by demand draft dated July 5, 2005. Towards further steps for reh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted November 16, 2004 (annexure 12). 10. During the pendency of the appeal, Smt. Raghuveri Devi and other workers of the Mills ; U. P. F. C. ; Sri Rajendra Kumar Goyal, one of the directors, and other employees of the State Insurance Corporation filed intervention applications, which were allowed and all these persons have been impleaded as respondents/interveners in this appeal. 11. We have heard learned counsel for the parties and perused the record. 12. The contention of the appellant-company is that on a miscellaneous application dated July 24, 2005, wherein the appellant desired to apprise the company court of the latest developments, including the rehabilitation proposal, as narrated above, the company judge, even without notice and without apparent consideration and appreciation of all such aforesaid efforts made towards the rehabilitation of the company, as well as the compromises actually effected, vide impugned order dated July 29, 2005, confirmed the opinion of the BIFR for winding up of the company and issued notice to the official liquidator to complete the proceedings within six months and directed the promoters from alienating or changing the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ludes the State of U.P., UPSIDC, Uttaranchal Trade Tax Department, Income-tax and Sales Tax Department, the rehabilitation scheme duly covers the proposal towards settlement of such creditors. It has further been averred that after filing of the draft rehabilitation scheme with the learned single judge, a meeting was held under the aegis of the Secretary Industrial, Uttarakhand, on July 7, 2005, i.e., prior to the passing of the impugned order on July 29, 2005. 16. On the basis of the aforesaid affidavit as well as the documents filed along with the same it is evident that even after passing of the impugned order dated July 29, 2005, numerous creditors of the appellant-company have been settled with and their dues liquidated in full. 17. The finding recorded by the learned single judge that "the viability of the company for rehabilitation cannot be looked into by the court for the simple reason that the question has already been covered by the BIFR and that finding has been affirmed by the appellate court", does not find sup port in view of the decision of the hon'ble apex court propounded in the case of V. R. Ramaraju v. Union of India reported in [1997] 89 Comp. Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd consisting of experts acting judicially will have a greater weight in deciding the question as to proceeding with the winding up of the sick industrial company. Such opinion of the Board cannot lightly be brushed aside. Even otherwise, it is a jurisdiction conferred upon the High Courts under the Companies Act'." 20. In view of the observations made by the Madras High Court as well as the Calcutta High Court, which has found support by the hon'ble apex court, we are of the opinion that the learned single judge should not have formed the opinion that "the finding recorded by the BIFR has been confirmed by the Appellate Authority, has become conclusive and thus this court does not require any interference", cannot be said to be justified. As we have discussed above, that several documents have been filed by the appellant-company in order to show that the numerous creditors of the appellant-company have been settled with and their dues liquidated in full, hence it would be just and proper to direct the Board to reconsider the matter afresh and if the financial position of the company has improved then this factor should be taken note of by the Board. 21. We have also consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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