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1995 DIGILAW 6 (CAL)

BAJARANG ELECTRIC STEEL PRIVATE LTD v. STATE

1995-01-04

BABOO LALL JAIN

body1995
BABOO LALL JAIN, J. ( 1 ) THE Court : This matter is coming up in the list for orders pursuant to the order dated 24th of January, 1994 passed by the Appellate Authority for Industrial and Financial Reconstruction, New Delhi (here-in-after referred to as "aifr" ). The said appellate authority forwarded its recommendations to this Court by their letter dated 4th of February, 1994. The appellate authority after considering various aspects of the matter held that there was absolutely no substance in the appeal which was accordingly dismissed and the impugned order of the BIFR dated 7th of September, 1992 was confirmed by the said appellate authority. ( 2 ) BY the order dated 7th of September, 1992 the Board for Industrial and Financial Reconstruction (here-in-after briefly referred to as BIFR') inter alia held as follows :-"19. After carefully considering all the facts on record and submissions made at the hearing, the Bench concluded that no agreed scheme to rehabilitate the company was forthcoming. The objections made by the company to the report of the consultant too were not substantively borne out. The points raised by Shri Gupta in regard to projections for miscellaneous realisation, wastage, job/own work, etc. were duly taken in view by the Operative Agency while formulating the rehabilitation scheme and justification thereof was duly explained by its representative in to-day's hearing; the same was found quite satisfactory. The promoters had received the report early in July and, therefore, had adequate time to examine it. Shri Gupta also could not substantiate his statement in regard to the filing of an appeal against the order of the concerned Court in the case of Sanchita Investments. The Bank and creditors are fully in support of the winding up of the company. 20. Having considered all facts, the Bench, therefore, confirmed that it was just and equitable that Shree Bajarang Electric Steel Company Limited should be wound up. The Bench also decided to send its decision to wind up the company to the High Court of Calcutta for necessary action according to law. Copies of this order as well as those of the earlier proceedings should be forwarded to the said High Court". The Bench also decided to send its decision to wind up the company to the High Court of Calcutta for necessary action according to law. Copies of this order as well as those of the earlier proceedings should be forwarded to the said High Court". ( 3 ) MY attention was also drawn to the order of the Hon'ble Supreme Court dated 21st April, 1994 passed in Petition for Special Leave to Appeal (Civil) No. 12446 of 1992 (Bank of India v. The Commissioner, Sanchita Investment and Anr. ). The Supreme Court recorded the submissions of the respective parties inter alia to the effect that in view of the order aforesaid of the AIFR the petitioner could go back to this High Court and raise all such issues as are available to it and the respondent could also raise all such pleas as are available to the respondent before this Court. The Supreme Court also directed the matter to be expedited in this Court. ( 4 ) THE learned advocate appearing on behalf of the company submitted that a writ petition was moved on behalf of his client before the learned Judge then taking company matters on or about March 4, 1994. However, be fairly submitted that his client was not granted any stay of the operation of the appellate authority dated 24th of January, 1994. His client also did not go in appeal from the order refusing stay and there is no subsisting order of stay of the order of the AIFR dated 24. 1. 94. ( 5 ) ACCORDING to the submissions made on behalf of the parties appearing before me i. e. the Bank of India, the Company as also Sanchita Investment there is no subsisting order for stay as on to-day with regard to the said order of the appellate authority or of the BIFR. Furthermore, interim order for stay was sought for on behalf of the Company and was refused on March 4, 1994. ( 6 ) THE learned advocate appearing on behalf of the Bank of India relied on the judgment of the Division Bench of this Court reported in Calcutta Law Times 1990 (1) HC 152 (Industrial Reconstruction Bank of India v. Textile Processing Corpn. ( 6 ) THE learned advocate appearing on behalf of the Bank of India relied on the judgment of the Division Bench of this Court reported in Calcutta Law Times 1990 (1) HC 152 (Industrial Reconstruction Bank of India v. Textile Processing Corpn. of India Ltd. and Anr.) whereby the Division Bench of this Court held that sub-section (2) of section 20 of the Act of 1985 makes it quite clear that the high Court has no option but to pass an order of winding up on the basis of the opinion of the Board. After such an order is passed the proceedings in the winding up order in respect of a particular Sick Industrial Company are to be in accordance with the provisions of the Companies Act, 1956. In such a case there is no question of any advertisement to be published. ( 7 ) RELIANCE was also placed on an earlier judgment delivered by me in Case No. 3 of 1989 (In Re: Eastern Paper Mills Ltd.) dated 3rd August, 1994, where also it was held that in terms of the provisions of section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 the opinion of BIFR and/or of the AIFR (as the case may be) has to given effect to by the High Court, in case of the Sick Industrial Company. ( 8 ) I am of the view that in this matter, in view of the opinion of the BIER as confirmed by the AIFR, this Court has no option but to make an order for winding up of the Company. There will, therefore, be an order that Shri Bajrang Electric Steel Company Pvt. Ltd. more fully and particularly referred to in the opinion of the Board of Industrial and Financial Reconstruction as forwarded to this Court as also the order dated 24th of January, 1994 of the Appellate Authority for Industrial and Financial Reconstruction as forwarded to this Court under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, be and is hereby directed to be wound up by this Court, in view of the provisions of the said Act and particularly in terms of section 20 of the said Act. ( 9 ) THE Official Liquidator is directed to take over possession of the assets of the company. The matter is thus disposed of. ( 9 ) THE Official Liquidator is directed to take over possession of the assets of the company. The matter is thus disposed of. ( 10 ) THE stay of operation of this order is prayed for on behalf of the company. Such stay is opposed on behalf of the Bank of India as also on behalf of the Sanchita Investments and the prayer for stay is declined. The Official Liquidator and all parties to act on a signed copy of this dictated order upon the usual undertaking. Appeal disposed of.