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TMI Blog2013 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... at the second motion stage, objection raised for the workmen maintainability of the application are rejected - Decided against petitioner. - CO.APPL.(M) 83/2013 in Co.Pet.321/2001 - - - Dated:- 3-7-2013 - R.V. EASWAR , J. For the Appellant : Arun Kathpalia and Amit Goel. For the Respondent : Barun Kumar Sinha, Ms. Pratibha Sinha and Rajiv Bahl. JUDGMENT:- PER : R.V. Easwar This is a first motion joint application filed under section 391 to 394 of the Companies Act, 1956 ('Act', for short) in connection with the scheme of arrangement and compromise proposed between the company by name S.B.L. Industries Ltd (in liquidation) and its creditors. The scheme is propounded by P.C. Sen, the Ex-management and Director company, who holds substantial shares in the company and for issuing directions for holding the meetings of the shareholders and various classes of creditors. 2. The company, which is now under liquidation was incorporated as a public limited company on 26.12.1960. The registered office of the company at the time of passing the winding up order was situated at Delhi. 3. The main objects of the company as set out in its memorandum of association, in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y off all creditors within a period of 6 to 12 months from the acceptance of the proposal by this Court and to complete the refurbishment and the recommencement of the manufacturing operations within the said period, or at any rate, within a maximum period of 24 months. It is further averred in the application that the scheme is in the interest of the company, the shareholders and the creditors inasmuch as their dues will be paid by entering into a compromise and arrangement with them which will enable the company to recommence the operations. It is stated that the scheme is ultimately in public interest as it would revive the economic activity, generate revenues for the State and provide employment. The fresh funds generated by the revived business, it is stated, will be ploughed back so that the financial health of the company improves. 8. Copy of the scheme of arrangement is annexed to the application and marked as Annexure A5. 9. It has further been stated that no investigation/proceedings have been instituted or are pending under section 235 to 251 of the Act or under any other provisions of the Act against the company. The proposed scheme of arrangement, it is stated, wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. He further argued that the acquisition of shares by P.C. Sen in the year 1999 was itself a sham transaction and if that is proved, the entire scheme of arrangement would fall flat. He submitted that he should be heard on behalf of the workmen at this stage itself. 13. Mr. Kathpalia appearing for the company opposed the contentions of Mr. B K Sinha appearing for the workmen and pointed out that at the first motion stage no such right to object inheres in the workmen and that whatever rights they have to object to the scheme may be voiced at the second motion stage and before the winding up order is passed. He pointed that the statutory provisions do not contemplate any hearing to be given to the workers at the first motion stage. 14. On a careful consideration of the objections raised by Mr. Sinha appearing for the workmen and the arguments of Mr. Kathpalia appearing for the company, I am of the view that at the first motion stage the workmen have no right to be heard. Section 391(1) of the Act says that where a compromise or arrangement is proposed between a company and its creditors or any class of them or between a company and its members or any class of them, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) fixing the quorum and the procedure to be followed at the meeting or meetings, including voting by proxy; (5) determining the values of the creditors and/or the members, or the creditors or members of any class, as the case may be, whose meetings have to be held; (6) notice to be given of the meeting or meetings and advertisement of such notice; (7) the time within which the chairman of the meeting is to report to the Court the result of the meeting, and such other matters as the Court may deem necessary. The order made on the summons shall be in Form No.35 with such variations as may be necessary." My attention was not drawn by Mr. Sinha to any Rule in the Companies (Court) Rules mandating the Company Court to direct, at the first motion stage, that the workmen ought to be heard in relation to their objections to the maintainability of the application. The reason is simple. Dues payable to workmen are treated on par with dues payable to secured creditors and in this sense the workmen are treated on par with secured creditors. If the workmen have any objection to the scheme or compromise, they can voice the same i the meeting of the secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9899984879, is appointed as the Chairperson and Mr. R. Gopalan, Court Officer, Mob. No. 9910390965, is appointed as the Alternate Chairperson for the meeting of the statutory liabilities creditors of the Applicant company. They would be paid a fee of Rs. 50,000/-. Ms. Garima Madan, Mob. No. 9871895157 and Mr. Jitender Kumar, Mob. No. 9717922519, officials to this Court shall provide secretarial assistance to the Chairperson and the Alternate Chairperson. They shall be paid a fee of Rs. 10,000/- each for this purpose. vii. The quorum of the meeting of the statutory liabilities creditors is fixed as follows: No. % 2 20% in value viii. It is also directed that if the quorum is not present at the commencement of the meeting, the meeting would be adjourned for 30 minutes and thereafter the persons present in the meeting, who would not be less than one, would be treated as proper quorum. ix. The Company has 136 unsecured creditors classified as Class III Creditors. A prayer has been made for convening the meeting of the unsecured creditors. Consequently, I direct that a meeting of the unsecured creditors of the Company shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than 5% in number, would be treated as proper quorum. xvii. The Company has the preference shareholders holding 2,47,50,000 preference shares. A prayer has been made for convening the meeting of the preference shareholders. Consequently, I direct that a meeting of the preference shareholders of the Company shall be held on 17thAugust 2013 at 4.30 P.M. at Hotel Krishna Residency, Plot No. 2, Sector 12B, Dwarka, New Delhi - 110078 xviii. Mr. Y.P. Singh, Advocate, Mob. No. 9953711028, is appointed as the Chairperson and Mr. Mukesh Kumar, Company Secretary, Mob. No. 9990620949, is appointed as the Alternate Chairperson for the meeting of the preference shareholders of the Applicant company. They would be paid a fee of Rs. 50,000/- each. Mr. S. Prem Kumar, Mob. No. 9910652606 and Mr. Hariom Singh, Mob. No. 9971843622, officials to this Court shall provide secretarial assistance to the Chairperson and the Alternate Chairperson. They shall be paid a fee of Rs. 10,000/- each for this purpose. xix. The quorum of the meeting of the preference shareholders is fixed as follows: No. % 15% in number 20% in value xx. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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