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TMI Blog2015 (3) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... e request. Dena Bank initiated a proceeding before the debt recovery Tribunal Lucknow and obtained certificate dated February 14, 2008 permitting Dena Bank to recover Rs. 17 crores approximately. Kamalapur preferred an appeal before the appellate authority. The appellate authority affirmed the decisions vide judgment and order dated December 15, 2008. In this backdrop, Dena Bank filed an application for winding up in 2009 before this Court inter-alia claiming, the Company was in involved circumstances and was unable to pay its debts hence, it should be wound up. The company opposed the application. They contended, being a secured creditor, Bank was not entitled to pray for winding up. Their remedy would lie in execution of the decree. His Lordship negated the contention and ultimately passed the order of winding up vide order dated July 30, 2010 appearing at pages-34-45 of the paper book. Kamlapur filed an appeal. The Division Bench upheld the judgment and order of the learned Single Judge vide judgment and order dated July 23, 2012 appearing at pages 50-71. Pertinent to note, the Division Bench heard the matter for five days on and from June 25, 2012. The Division Bench dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant placed the orders passed from time to time referred to above, and contended, the erstwhile management committed fraud on Court by making deliberate suppression, about the proceedings of the BIFR, before this Court. He would contend, once the High Court passed the order of winding up there was no scope for the BIFR to entertain the reference. Drawing our attention to the various provisions of SICA Mr. Roy Chowdhury would contend, the said Act was a Code by itself and on a combined reading of the various provisions it would never suggest, this could be applied at the post winding up stage. He would rely upon an age old decision of this Court in the case of Smith Stanistreet Pharmaceuticals Limited Vs. Nester Pharmaceuticals Limited reported in 1993 Volume-I Calcutta High Court Notes Page-368. He would pray for setting aside of the judgment and order of the learned Company Judge impugned herein. Appearing for the Official Liquidator, Ms. Ruma Sikder learned Counsel would inform the Court, Official Liquidator for the first time came to know of BIFR proceeding on September 20, 2013 when the management informed the Court about such proceeding. Ms. Sikder would also inform, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the instance of the Official Liquidator in proceeding towards the liquidation. Mr. Abhrajit Mira learned senior Counsel also appearing for Manoj Saha would rely upon the following decisions: 1. M/s. Foremost Industries (India) Limited Vs. The A.A.I.F.R. & Others reported in 2000 Volume-IV Company Law Journal Page- 362. 2. Khurshid Alam Vs. P. Pagnon Company Private Limited and others reported in 2002 Company Law Board Page-523. 3. Tan India Limited Vs. Sundaram Finance Limited and another reported in 2002 Volume-108 Company Cases Page-591. 4. Modi Rubber Limited Vs. Madura Coats Limited and Another reported in 2006 Volume-130 Company Cases Page-32. 5. Tata Motors Limited Vs. Pharmaceutical Products of India Limited and another reported in 2008 Volume-VII Supreme Court Cases Page-619. He would also rely upon an unreported decision of the Delhi High Court in the case of Zenith Infotech Limited Vs. Union of India. He would contend, the decisions cited at the bar would clearly show, the subject Act would apply also at the post winding up stage and such application was considered to be in accordance with the law as held by the Apex Court in the case of Rishabh Agro (supra). Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings before the BIFR. We are of the opinion that once the winding up order has been made by the Court in the proceeding for winding up of the company, the proceeding for winding up of the company comes to an end, and the other provisions in the Companies Act, 1956 relating to the company in liquidation will come into play and Official Liquidator after taking possession of the assets of the company in liquidation will discharge his functions as specified in various provisions on the Companies Act relating to the company in liquidation." 2. Rishabh Agro Industries Limited Vs. P.N.B. Capital Services Limited reported in 2000 Volume-V Supreme Court Cases Page-515: In the said case, the Company Court passed an order of winding up however, the Division Bench stayed the order of winding up. During the period when the company was enjoying stay Company approached the BIFR. The creditor contended, it was a misconceived attempt. Moreover, on the date of the passing of the order by the Division Bench, no proceeding was pending before BIFR. In this backdrop, the Apex Court held, the proceeding was maintainable. The Apex Court, in paragraph 10, held, in a winding up petition when the Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "." 3. M/s. Foremost Industries (India) Limited Vs. The A.A.I.F.R. & Others reported in 2000 Volume-IV Company Law Journal Page-362: The Division Bench of the Delhi High Court, relying on Rishabh Agro, held post winding up BIFR proceeding maintainable. 4. Khurshid Alam Vs. P. Pagnon Company Private Limited and others reported in 2002 Volume-108 Company Cases Page- 523: Mr. Mitra relied on paragraph 1 and 2 of this Company Law Board decision. We do not find any relevance in the present context. 5. Tan India Limited Vs. Sundaram Finance Limited and another reported in 2002 Volume-108 Company Cases Page- 591: The Single Bench decision of the Madrass High Court held, when the company Court passed an order of winding up, the said order could not be set aside however, could be stayed during pendency of the reference before BIFR. Learned Single Judge relied upon the observation of the Apex Court made in Rishabh Agro (supra). 6. Modi Rubber Limited Vs. Madura Coats Limited and Another reported in 2006 Volume-130 Company Cases Page-32: Division Bench of the Allahabad High Court also relied upon Rishabh Agro (supra). In this case BIFR registered the reference on February 4, 2004 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er precedent would speak otherwise; however, the factual scenario in the said case could also be clearly distinguished from the present one. Hence, we have to rely on the provisions of SICA to get a clear vision. We fully agree with Tata Motors (supra) where Apex Court observed, SICA would have an overriding effect on Companies Act. However, the concept of overriding effect would only come when there would be a conflict in law. We should read these two statutes harmoniously to find out whether the present scenario would have application of such observation. Under the law of winding up the Company Court was the supreme authority to exercise its discretion as to whether the company would be wound up or not. Such exercise might be at the instance of the creditors or at the instance of shareholders or contributory. In a given situation it could also be at the instance of the Central Government. SICA would prevail upon a totally different field i.e. rehabilitation/revival. If we read the provisions, we would find, a complete procedure was laid down, commencing from Section 15 to Section 22 as well as Section 26 as to the consideration to be made by the BIFR or the AAIFR in a given situa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is ordinarily entitled to seek winding up upon compliance of the provisions of Section 434 of the Companies Act 1956 that would ultimately culminate into an order of winding up blocking the chance of revival. Hence, such winding up process would come within the mischief of Section 22 and following Tata Motors. SICA would have overriding effect and winding up petition would be liable to be stayed till BIFR or AAIFR is in seisin or a scheme framed by the said authorities is in operation. The aggrieved party is not remediless. They are free to appear before BIFR and/or AAIFR for protection of their interest ventilating their grievance which they could otherwise do before a civil Court or a company Court as the case may be. This is well-settled principle of law that would deserve no relook. The decisions cited at the bar consistently upheld such principle of law. The present case would however, stand on a complete different footing. In the instant case, admittedly the order of winding up was passed on a date when there was no reference pending. Pertinent to note, the order of winding up was passed on July 30, 2010 whereas the reference was registered on September 12, 2013. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the deliberate disregard that the respondent had shown to this Court by making deliberate suppression. They left no stone unturned in stalling the process of winding up. However, they could not bring any plausible scheme that could take care of an effective process of discharge of debt and at the same time revival of the unit. All such attempt failed before this Court. Each and every order was passed upon giving due consideration to their contentions. Before the Court of Appeal, when they pressed their appeal against the order of winding up, they deliberately suppressed the pendency of the BIFR proceeding. When they failed they tried to stall the sale, ultimately used the last resort taking recourse to SICA. Our conscience would prick, if we uphold the judgment and order of the learned Company Judge. We have no hesitation to hold, the entire conduct of the respondent and their approach made as discussed above, was nothing but a deliberate attempt to forestall the process of winding up. If we allow the same that would be a premium to dishonesty. The appeal succeeds and is allowed. The judgment and order is set aside. There would be no order as to costs There would be howev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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