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TMI Blog2022 (12) TMI 1554X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to establish its bonafide, it may be expedient to pass an order calling upon the Applicant to make deposit and file requisite undertakings and direct the Official Liquidator to publish a notice inviting the attention of all the stake holders to the proposal to permanently stay the winding up order and revive the Company. Conclusion - The winding up order ought to be permanently stayed. Application disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... k Industrial Companies (Special Provisions) Act, 1985. BIFR declared Svadeshi Mills as a sick Company. Eventually, by an order dated 5 February 2011, BIFR recommended winding up of Svadeshi Mill. An Appeal preferred thereagainst by RMMS - Respondent No. 3 before AAIFR came to be dismissed by an order dated 14 May 2001. 2.7 Pursuant to the recommendations of the BIFR, winding up petitions were admitted by this Court and the Official Liquidator was appointed as Provisional Liquidator of Svadeshi Mills by an order dated 13 February, 2002. 2.8 After several intermediatory orders, by a composite order dated 5 September, 2005 this Court ordered winding up of Svadeshi Mill and directed the Provisional Liquidator to act as the Official Liquidator (Respondent No. 1), with all powers under the Act of 1956. Various proceedings ensued, including by the financial institutions before the Debt Recovery Tribunal - I (DRT), Mumbai. 2.9 The Applicant acquired secured debt of the company under the Deeds of Assignment dated 1 December, 2006 and 31 August 2007 from Stress Assets Stabilization Fund (SASF) and Bank of Baroda (BOB). Proceedings were also initiated to bring about the expeditious resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation, involved in the manufacture of textiles, the said business is no longer feasible for a myriad of reasons. The Applicant, therefore, proposes that the Company enters into business of real estate development, upon its coming out of the winding up. 2.17 In substance, according to the Applicant, all the stake holders' interest is best subserved if the order of winding up is permanently stayed and the company is permitted to revive its operations in accordance with the proposal which has the approval of Respondent No. 3. 2.18 The Applicant further asserts that despite concurrence of Respondent No. 3 - RMMS, in the event ex-workers or any creditors are not agreeable to the amount promised to be paid under this Application, their liberty to approach the Official Liquidator may be reserved and such ex-workers may be paid the amount as calculated as per the judgment dated 22 December 2015 passed by the Division Bench of this Court in Appeal No. 447 of 2014 or the amount set out under the Agreement for Settlement, whichever may be higher. Hence, this Application. INTERIM APPLICATION (L) NO.29439 OF 2021 3. RMMS has filed this Application seeking direction to Grand View - Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istance of the learned Counsel for the parties, I have perused the pleadings, documents annexed with the respective Applications and the Official Liquidator's Report. 7. In the light of the view which this Court is persuaded to take, it may not be necessary to note the submissions canvassed on behalf of each of the parties, in detail. It would be suffice to note that there is, in a sense, consensus among the parties that the liquidation process, in the backdrop of the impediments encountered, may not yield the satisfactory result qua each of the stake-holders. The learned Counsel were in unison on the point that if the parties act upon the Agreement for Settlement, the workers and other stake holders of the company in liquidation would stand to benefit. Since the Applicant - Grand View and the Respondent No. 2 - Forbes and Co. Ltd., are the only two secured creditors, who also jointly hold more than 50% shares of the company in liquidation, and they propose to keep their claims in abeyance till the company comes out of the liquidation, and the Applicant proposes to deposit the amount to meet the specified liabilities of the Company, the winding up order ought to be permanently sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The total debt as on 31st March, 2022 owed by the Company to the secured creditors is approximately Rs. 737.44 Crores. As the secured creditors are vitally interested in bringing the Company out of liquidation, it is agreed that if this application were allowed the Applicant and the Respondent No. 2 shall defer any action for recovery of this amount. Such an undertaking shall be recorded as an undertaking given to this Hon'ble Court. The Applicant and the Company shall instead arrive at a mutually acceptable payment schedule which shall facilitate the Company to be able to begin its business operations as set out in the present application. C. SETTLEMENT OF OTHER UNSECURED CREDITORS: From the information made available to the Applicant, it is observed that 146 unsecured creditors have filed claims to the tune of Rs. 119.97 Crores with the Respondent No. 1. Out of these 146 unsecured creditors, 70 unsecured creditors to the tune of Rs. 114.52 Crores have assigned their claims to the Applicant and to (1) Chinsa property pvt. Ltd and (2) Shachin Real Estate Pvt. Limited, which are group companies and which too are part of the Shapoorji Pallonji Group, who have agreed to give al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Official Liquidator. Upon an order of permanent stay of the Company being passed by this Hon'ble Court, the Official Liquidator may be directed to pay to the statutory creditors their legitimate statutory dues from the the said deposit or as this Hon'ble Court may deem fit and proper. This payment in full shall be towards the full and final discharge of their claims of whatsoever nature, against the Company. In the event, the amount deposited as above by Applicant falls short, the Applicant undertakes to deposit any additional amount, as required, with the Official Liquidator to discharge the said statutory liabilities, as aforesaid. Such an undertaking may be recorded as undertakings given to this Hon'ble Court. F. The Applicant has already paid the entire amount due to the Employees State Insurance Corporation and Profession Tax Department of Rs. 1.99 Crores and Rs. 0.70 Crores, respectively. The Applicant is therefore entitled to receive this money from the Company. However, in the event this Hon'ble Court orders permanent stay of winding up of the Company the Applicant in its capacity as a secured creditor is agreeable to give all co-operation to the Company to come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p the chawls located on its hand, which are presently in dilapidated and ruinous condition. Their redevelopment will provide housing for their residents. Thus, for this reason also, the revival of the Company is in the larger public interest. It may be noted that the redevelopment of the land of the Company will also lead to the construction of low-cost housing by MHADA as per law. The erstwhile workers will be entitled to participate and apply for these low-cost housing units, a portion of which will also be offered free of costs to eligible erstwhile workers. For this reason also, the revival of the Company is in the larger public interest. Further, the Applicant also proposes that the Company shall establish and operate a Textile Educational Institution upon its land which will be in furtherance of government policies. The erstwhile workers and their dependents would also be entitled to preference in admission to this institution. This would also be in the larger public interest. It may also be noted that the redevelopment of the immovable property of the Company would lead to a development of the overall locale where they are located. This area is presently under develped a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed RMMS has put up a Notice on its notice board to generally inform all ex-workers of the option of claiming higher of the dues, either adjudicated by the Official Liquidator or the amount payable under the Agreement for Settlement (Para 63). A copy of the Notice dated 8 December, 2022 published on its notice board incorporating the said option, is annexed to the said Affidavit. RMMS contends that the said proposal be accepted as an undertaking to the Court. 12. An endeavour is made in the Affidavit to demonstrate that the proposed settlement is more beneficial to the ex-workers than what they stand to gain under adjudication by the Official Liquidator. Since the Provisional Liquidator came to be appointed 20 years ago, the workers have not received substantial part of their dues, 2471 ex-workers have crossed the age of superannuation and many of them have passed away, RMMS reiterates that the Agreement for Settlement dated 28 February 2020 read with the Supplementary Agreement dated 29 June, 2021 is in the best interest of ex-workers of the company in liquidation. 13. The situation which, thus, obtains is that the Company in liquidation is under winding up since 5 September 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peditious resolution of their claims. 16. Apart from the workers, none participated in the instant proceedings. Having regard to the huge potential of the assets of the company in liquidation, and the claims which have been made by the government agencies like MHADA, in my view, it is imperative that the Court has full assurance that the rights of the parties who have the stake in the company in liquidation are not affected before the order of permanent stay of the winding up order is passed. An identical prayer, in the past, came to be rejected upto the Supreme Court, albeit on account of resistance by some workers. Therefore, to provide an opportunity to the Applicant to establish its bonafide, it may be expedient to pass an order calling upon the Applicant to make deposit and file requisite undertakings and direct the Official Liquidator to publish a notice inviting the attention of all the stake holders to the proposal to permanently stay the winding up order and revive the Company. 17. Hence, the following order : ORDER (i) The Applicant in IA No. 3663 of 2022 - Grand View, shall deposit an amount of Rs. 240 Crores with the Official Liquidator within a period of six weeks ..... X X X X Extracts X X X X X X X X Extracts X X X X
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