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2004 DIGILAW 492 (GUJ)

GOPAL JALAN v. O. L. OF JALAN ISPAT CASTING LTD

2004-07-30

K.A.PUJ

body2004
K. A. PUJ, J. ( 1 ) THIS application is filed by one Mr. Gopal jalan, one of the founders and promoters of M/s. Jalan ispat Industries Limited, the Company in liquidation. In the Judges Summons, taken out by the applicant, following prayers have been made :- (A) Your Lordships be pleased to revoke the winding up order passed by the Honble High Court in Company Petition No. 69 of 2002 on 12. 11. 2003 pursuant to the opinion forwarded by the Registrar, BIFR on 27. 03. 2002 in BIFR Case No. 126/97 (II) under section 466 of the Companies Act, 1956 for the reasons stated in the accompanying Affidavit in support of the Judges Summons. (B) Your Lordships be pleased to issue directions to the respondents that on staying of the winding up order, the applicant will be permitted to resume manufacturing activities of Jalan Ispat Casting Limited (Company in liquidation) as well as Manganese Mine operations on the terms and conditions which may be imposed by this Honble Court as may be deemed fit, just and proper in the interest of justice and fairness of things, especially when the contributory is ready and willing to settle the dues of secured creditors, as per the details set out in the present Affidavit in Support. (C) Your Lordships be pleased to restrain the Official Liquidator from taking possession of M/s Jalan Ispat Casting Limited as till the date of filing of the present application, the possession of the Unit is with the applicant for the reasons stated in the application. (D) Pending hearing and admission, hearing and till final disposal of this application, your Lordships be pleased to permit the present applicant to restart and run M/s. Jalan Ispat Casting Ltd. (the Company in liquidation) and mining of Manganese Ore, on appropriate terms and conditions which may be deemed fit, just and proper in the interest of justice. ( 2 ) AN affidavit in support of the Judges Summons is filed by Shri Gopal Jalan. It is stated in the said affidavit that the Company, namely, Jalan Ispat Casting limited (in liquidation) has been progressing up to the satisfaction of the promoters and had acquired a very good reputation in the market as one of the largest manufacturers of Steel and Ferroy Alloys in the Country. It is stated in the said affidavit that the Company, namely, Jalan Ispat Casting limited (in liquidation) has been progressing up to the satisfaction of the promoters and had acquired a very good reputation in the market as one of the largest manufacturers of Steel and Ferroy Alloys in the Country. However, all of a sudden, from the year 1995 onwards, there was major recession in the Steel industries all over the world on account of various reasons and further the skyrocketing increase in the price of electric energy supplied by the respective Agencies in Gujarat and Madhya pradesh, has also vitally affected the financial viability of the Company in liquidation, which has ultimately resulted into increase in the price of its products compared to other manufacturers who are situated in other States of India and, therefore, the Company could not sustain in the comparative market. ( 3 ) IT is further stated that though the power tariff remained the same, the Company in the past acquired the main raw material i. e. Manganese Ore, from outside sources from far-off places, resulting into high cost. However, with the mining lease sanctioned in favour of jalan Ispat Casting Limited in the year 1998, i. e. one year after the closure of the unit, the high tariff of electric energy is neutralized to a great extent, thus making the unit extremely profitable and viable. On account of worst market conditions of Steel industries all over the world, those who are giants in Steel industries in our country, namely, TATA, SAIL, JINDAL ispat, ESSAR, etc. have also sustained huge losses from the financial years 1997 - 98, 1998 - 99, 1999 - 2000 and 2000 - 2001 and this can be seen from the annual balance sheets published by these companies. On account of various reasons beyond the Companys control and also due to adverse market conditions in the Steel Industries and also due to recession in the Steel Market all over the world, many companies like the Company in liquidation were unable to withstand and ultimately were constrained to close down their units. Inspite of sincere and best efforts being made by the management of the Company in liquidation, the Company could not make it viable and ultimately stopped its manufacturing activities. Inspite of sincere and best efforts being made by the management of the Company in liquidation, the Company could not make it viable and ultimately stopped its manufacturing activities. ( 4 ) THE management of the Company in liquidation approached the BIFR and made best available efforts for revival of the unit. However, because of the reasons which were beyond the control of the Management of the company in liquidation, the management could not arrange for the funds as suggested by the Operating Agency before the BIFR and in view of the said facts, the BIFR formed opinion under Sub-section (1) of Section 20 of Sick industrial Company (Special Provision) Act, 1985 for recommending this Court that it is just, equitable and in the public interest to wind up the applicant company. This report has been received by the Registrar of BIFR and the report has been registered. as Company Petition no. 69 of 2002 and public advertisement has been given in the newspapers following the order passed by this court. This Court has thereafter passed an order for appointing Provisional Liquidator and finally the winding up order was passed on 12. 11. 2003. The said order was challenged by the Company in liquidation by filing O. J. Appeal No. 27 of 2003 and the Division Bench has directed the applicant to deposit Rs. 1 Crore as suggested by BIFR, but the Company in liquidation could not deposit the said amount and ultimately, the said O. J. Appeal was withdrawn by the Company in liquidation with a view to take all available opportunities and contentions before the learned Company Judge. ( 5 ) IT is in the above background of the matter, the present application is filed before this Court. This court has issued notice on 30. 04. 2004 making it returnable on 15. 06. 2004. On 15. 06. 2004, when the matter was placed for hearing, Mr. T. R. Mishra, learned advocate appearing on behalf of some of the workers of the Company in liquidation has submitted that the workers be heard in the matter before passing any order in this application. Mr. K. S. Nanavati, learned Senior counsel has submitted that the applicant would join the workers in the present application and would give copy of this application to Mr. Mishra. Mr. Utkarsh Jani, learned advocate appearing for Mr. B. G. Jani for respondent no. Mr. K. S. Nanavati, learned Senior counsel has submitted that the applicant would join the workers in the present application and would give copy of this application to Mr. Mishra. Mr. Utkarsh Jani, learned advocate appearing for Mr. B. G. Jani for respondent no. 3 - IFCI has asked time to file reply. On behalf of respondent No. 2 - Bank of Baroda, affidavit was filed by senior Manager of the Bank, namely, Mr. Praful B. Mehta wherein the Bank has submitted that the Company in liquidation has submitted one time settlement proposal for Rs. 813. 69 Lacs towards full and final settlement of the Banks dues and the said compromise proposal has been submitted to the Central Office, Mumbai for consideration. As per the said compromise proposal, the company will have to pay 10% down payment immediately on the date of sanction and balance amount to be paid in 10 equal quarterly instalment on interest free bases commencing after 6 months from the date of down payment. ( 6 ) ON 21. 06. 2004, this Court has recorded the submission of Mr. K. S. Nanavati, learned Senior Counsel appearing for the applicant that the applicant has approached various Govt. authorities and talks were going on. He has, therefore, prayed for some time to put the necessary information on record. The Official liquidator has submitted before the Court that pursuant to the order of winding-up passed by this Court, the liquidator has issued notices for handing over possession. However, since the present application was under consideration, the Court has directed the Official liquidator not to take possession till the next date of hearing i. e. 24. 06. 2004 and thereafter, the said order was extended from time to time. ( 7 ) MR. K. S. Nanavati, learned Senior Counsel with mr. However, since the present application was under consideration, the Court has directed the Official liquidator not to take possession till the next date of hearing i. e. 24. 06. 2004 and thereafter, the said order was extended from time to time. ( 7 ) MR. K. S. Nanavati, learned Senior Counsel with mr. B. T. Rao, learned advocate appearing for the applicant has submitted that even after the BIFR has forwarded its opinion to this Court and even after the winding-up order is passed, the ex-Management of the company in liquidation had made all its sincere and honest efforts to revive the Unit, but the Management could not do so because the Secured Creditors of the company in liquidation did not take any pragmatic view in the matter and did not show any interest or willingness to revive the Unit for the reasons best known to them, otherwise the Company might have been revived and might have been started its manufacturing activities since 2003 itself before passing of the winding up order by this court. Because of the over all recesion in the Steel industries, the Company could not make any progress and suffered huge losses. It was also on account of high electricity rates, the Company suffered a lot and steel plants in Gujarat, Maharashtra and Madhya Pradesh and orissa have come in bad weather and 75% of the Industries have been closed down. On account of International development of Trade by South Asian countries and european Union, the market for steel industry started improving. In the international survey for requirement of steel, finished products, semi-finished products and ferrous alloy, it was reported that even if the present plants situated in the South Asia work around the clock for five years, then also the international requirements of steel and Ferroy Alloys products cannot be met on account of development of infrastructure Projects in south Asian Countries. ( 8 ) MR. ( 8 ) MR. Nanavati has further submitted that the present applicant being one of the founder members and promoters and also being a Technocrat and having sound, knowledge, experience and expertise in the Steel industry for more than 20 years, has gathered courage to restart the Unit, because of the improved market conditions for steel industry and decided to restart the Company in liquidation as he was having 60% share and also being a contributory, has proposed to settle the claims of secured creditors and the said proposal has been forwarded to all the secured creditors. The applicant has worked out a strategy to ensure that within three years of restarting, the applicant can wipe out all the liabilities of the Company in liquidation if this Court permits the applicant to restart the Unit and allow mining of Manganese Ore, by revoking the order of winding up. For this purpose, Mr. Nanavati has invited the attention of the Court to the scheme prepared by the applicant giving projections and calculations for making payment of Secured Creditors in a phased manner. At the time when the time was granted by BIFR for bringing the funds and even by Division Bench of this Court, the applicant could not manage the said funds as the applicant was under a great depression and all his efforts and ability to revive and run the plant have gone in vain. However, situation turned in January 2004 and the Steel industry which was sinking for the last 8 years has revived and got a boost as a result of which in the first quarter of 2004, all the Steel industries have recorded sales 10 times more than the preceding Quarter and the price has also been increased from Rs. 12 per Kg. to Rs. 27 per Kg. On account of tremendous demand, which cannot be fulfilled by the present majors in the steel industry and on account of applicants good report and reputation in the market, the applicant has got confirmed orders from three major industries and the same has been placed on record with this application. Mr. 12 per Kg. to Rs. 27 per Kg. On account of tremendous demand, which cannot be fulfilled by the present majors in the steel industry and on account of applicants good report and reputation in the market, the applicant has got confirmed orders from three major industries and the same has been placed on record with this application. Mr. Nanavati has further submitted that the reason for moving this application for revoking the order of winding up under Section 466 of the Companies Act, 1956 as a contributory, is that on account of positive change in the market for Steel industry and Ferroy Alloy industry, the persons who have faith in the ability and skill of the applicant have made fixed deposit of Rs. 1. 70 Crores in a Hold Up Account with Syndicate Bank, Alwar Branch at alwar in Rajasthan. The proposal for one time settlement has been forwarded by the applicant to its Secured creditors and when the Secured Creditors accept the said proposal, this amount of Rs. 1. 70 Crores will be transferred to the Companys Account, which in turn, to be appropriated and transferred in the account of Secured creditors and meeting of working capital requirement according to the terms of settlement as approved by them as well as by this Court. He has, therefore, submitted that this Court should revoke the order of winding up and grant permission to restart the unit and operation of mining the Manganese Ore. For this purpose, the applicant will make available additional amount of Rs. 60 Lacs which would be invested for making the Unit functional. When the Unit was closed down its manufacturing and mining activities in the State of madhya Pradesh, there were no outstanding dues of Central excise Department, nor any amount was due and payable to the workers and there was no outstanding dues of Income tax Department. If the order of winding up is revoked and the applicant is permitted to restart the manufacturing activities, the applicant will file an undertaking before this Court that the applicant would not transfer, alienate or create any encumbrance on any fixed assets of the Company in liquidation. ( 9 ) MR. If the order of winding up is revoked and the applicant is permitted to restart the manufacturing activities, the applicant will file an undertaking before this Court that the applicant would not transfer, alienate or create any encumbrance on any fixed assets of the Company in liquidation. ( 9 ) MR. Nanavati has further submitted that the company was viable based on the revival scheme as considered by the BIFR and AAIFR but the viability could not take shape in reality only for the simple reason that the promoters were not able to manage funds of Rs. 211 lacs required under the revival scheme before the BIFR. It is not the case of the applicant that an unviable company has become viable now for extraneous reasons, but it is the case that the promoters are now in a position to bring in the funds required for implementing the revival scheme of the viable company. Even this Court has also taken note of viability of the Company, of course, depending upon the infusion of fresh blood in the sick company in the form of Rs. 1 Crore in order to meet the immediate financial commitments to the creditors of the Company. Unfortunately, the promoters could not arrange funds which turned out to be the sole reason for failure of an otherwise viable company being pushed into liquidation proceedings. The promoters are now ready with the funds of Rs. 2. 30 Crores as required in terms of rehabilitation scheme to which all the concerned parties had already agreed before the BIFR. Apart from the developments in the Steel industry, there are certain good factors such as favourable improved market conditions, confirmed orders on hand, comparatively good margin of profit, no past liabilities of Excise duty, income Tax, Labour etc. He has, therefore, submitted that looking to the totality of the facts and circumstances and availability of funds to the extent of full requirements, revocation of winding up order and permitting the applicant to restart the company manufacturing of units and mining activities would be in the interest of not only Creditors but Shareholders, suppliers, buyers, employees, revenue, growth of trade and industry in tribal area and national productivity also. The workers of the Company have also shown their solidarity and have expressed their desire and willingness to extend full support and cooperation to the applicant if the applicant is allowed to restart the unit. ( 10 ) WITH regard to the submission of Mr. Nanavati that the Court has power to stay the winding-up order, he relies on the decision of the Delhi High Court in the case of VOLUNTARY LIQUIDATOR, DIMPLES PVT. LTD. V/s. REGISTRAR OF COMPANIES, 48 COMPANY CASES 98 wherein it is held that "the power to stay the winding up of a Company under Section 466 of the Companies Act, 1956, in the case of Companies which were wound up by the Court, could also be exercised when a company was in voluntary liquidation; and that since the management wanted to revive the company and there was no impediment whatsoever, the winding-up proceedings should be stayed altogether. " ( 11 ) HE has further relied on the decision of the karnataka High Court in the case of V. B. PUROHIT V/s. GADAG AND JAMBUKESHWARA, 56 COMPANY CASES 360 wherein it is held that "under Section 466 of the Companies Act, 1956, the company court possesses the power to grant a stay of a winding up of a company even when it is a case of voluntary winding up, provided the facts justified the stay. It is further held that mere consent of the parties is not enough and the court should consider all the circumstances. The Court has further held that the company had a lease of limestone quarry with great potential and it had estimated that the limestone for quarrying was in the region of 27 million tonnes with an estimated reserves of 50 million tonnes, that increased production of cement was in the national interest and that since the shareholders had resolved to revive the company and make one more effort to start a cement factory, such opportunity should not be denied to the shareholders. " ( 12 ) MR. Nanavati has lastly relied on the decision of this Court in the case of NEW SWADESHI MILLS OF ahmedabad LTD. " ( 12 ) MR. Nanavati has lastly relied on the decision of this Court in the case of NEW SWADESHI MILLS OF ahmedabad LTD. V/s. DYE-CHEM CORPORATION, 59 COMPANY cases 183 wherein it is held that "even if there are huge debts, secured as well as unsecured, which, as matters stand, are far beyond the means of the company, whose winding up is sought, to meet, the company court will exercise a sound discretion in deciding whether to wind up the company or not and in doing so consider many relevant factors. It may be that despite the inability to pay its debts, a company has still prospects of coming back to life and if the court is told to any specific proposal, which in the opinion of the court is likely to materialise, the court will be inclined to give a chance to resurrect the company. It should be the policy of the court to attempt to revive though at all the moment the company may not be solvent and may not be able to meet its obligations to its creditors. But this should be done only if it is shown that there is reasonable prospect for resurrection and survival. It may be easy for a court when once it is shown that the company is unable to pay its debts to bury it deep and distribute whatever is available as distributable surplus. But it is the duty of the court to welcome revival rather than affirm the death of the company and for that purpose, the court is called upon to make a discreet exercise. Even after making the above referred observations, the Court has held on facts that where in spite of being given ample time, the company was still making efforts to get financial efforts but had not succeeded in persuading any financial institution to come forward to help, it was proper that the company be ordered to be wound up, since there were huge debts, far beyond the means of the company to meet and there was no reasonable prospect of the company reviving its normal operations. " ( 13 ) BASED the changed circumstances, such as improved market conditions of the steel industries, confirmed orders, infusion of funds, assurance to accept one time settlement proposal by Bank of Baroda and also the Courts approach to revive the sick units, Mr. " ( 13 ) BASED the changed circumstances, such as improved market conditions of the steel industries, confirmed orders, infusion of funds, assurance to accept one time settlement proposal by Bank of Baroda and also the Courts approach to revive the sick units, Mr. Nanavati has strongly urged before the Court to allow the applicant to restart the Company in liquidation by revoking the winding up order and/or by staying the winding up proceedings. ( 14 ) MR. B. G. Jani, learned advocate appearing for respondent No. 3 i. e. I. F. C. I. has opposed this application and placed on record detailed affidavit-in-reply. He has submitted that IFCI had sanctioned lease finance of Rs. 75 Lacs to the Company in liquidation in March 1990 for purchase of Rolling mill. As per the terms of sanction and the lease agreement entered into with the Company in liquidation on 26. 04. 1990, the Company was required to pay the monthly lease rentals for a period of 96 months. The machinery were actually invoiced in favour of IFCI and IFCI is the owner of the assets. The Company in liquidation has not paid the lease rentals since 01. 02. 1994 and IFCI has terminated the lease agreement by way of a letter dated 10. 04. 1997. The Company in liquidation has proposed one time settlement to IFCI, Bank of Baroda and other lenders which is based on outstanding principal amount. Any one time settlement should be based on the total outstanding amount including interest and not on the principal outstanding in order to give equitable treatment to all the lenders. The Company in liquidation has paid the dues of Bank of Baroda upto the year 1997 whereas Company in liquidation was in default of lease rentals to IFCI since 01. 02. 1994. The interest dues of IFCI has accumulated since 1994 whereas in case of Bank of Baroda, the interest has accumulated since 1997. It is, therefore, not just and proper to exclude the interest component for arriving at the one time settlement as it leads to discrimination among lenders. The assets have been provided to the Company in liquidation under lease finance and hence, IFCI is the lawful owner of the assets and if IFCI is permitted to sell the assets, sale proceeds would be realised by IFCI immediately. Mr. The assets have been provided to the Company in liquidation under lease finance and hence, IFCI is the lawful owner of the assets and if IFCI is permitted to sell the assets, sale proceeds would be realised by IFCI immediately. Mr. Jani has, therefore, submitted that one time settlement proposal submitted by the Company in liquidation is not acceptable to IFCI and needs substantial improvement in terms of settlement. ( 15 ) MR. A. D. Oza, learned advocate appearing for respondent No. 8 i. e. G. E. B. has also opposed the application moved by the applicant. He has submitted that the Company in liquidation was the consumer of the board having H. T. Connection. The connection was given to the Company on 03. 06. 1987. As the Company was not making payment of the regular bill of the Board, the company was given notice for disconnection. Accordingly, the connection of the Company was made Temporary disconnection on 02. 06. 1998 for non-payment of the dues of Rs. 1,04,95,979. 98ps. Thereafter, the Company was given termination notice on 04. 09. 1998 for termination of the agreement made with the consumer to pay the dues of the Board on or before 30. 11. 1998. However, the Company failed to pay the dues and accordingly, the agreement between the Company and the Board was terminated with effect from 01. 12. 1998. He has, therefore, submitted that as the Company has not paid the dues of the Board, the connection of the Company was made Permanent disconnection on 01. 12. 1998 for non-payment of the dues of the Board to the tune of Rs. 1,83,86,063. 24ps. Mr. Oza has further submitted that till date, the Company in liquidation has not made any payment towards dues of the board. In the present application which is moved by the applicant, the applicant has not made any proposal as to how the Company is going to raise funds towards the dues of the Board. Unless and until, the Company in liquidation gets electric connection by paying the electricity dues, the Company cannot be started. The proposal which is moved by the present applicant is absolutely illusory and in fact the amount which was due on 01. 12. 1998 has gone upto Rs. 3,26,05,713. 40 ps. as on February, 2004. Mr. Unless and until, the Company in liquidation gets electric connection by paying the electricity dues, the Company cannot be started. The proposal which is moved by the present applicant is absolutely illusory and in fact the amount which was due on 01. 12. 1998 has gone upto Rs. 3,26,05,713. 40 ps. as on February, 2004. Mr. Oza has lastly submitted that these facts have not been disclosed by the applicant before this Court and hence, the winding-up order which was passed by this Court is not required to be revoked. ( 16 ) MR. S. P. Hasurkar, learned advocate appearing for respondent No. 9 i. e. Madhya Pradesh State electricity Board has also objected the present application moved by the applicant. An affidavit-in-reply is filed by Shri Jagdish Prasad Dubey, superintending Engineer (Oandm), MPSEB, Jhabua. Mr. Hasurkar has submitted that in the entire application, the dues of the respondent No. 9 have not been clearly stated. He has further submitted that the respondent no. 9 has already lodged its claim in the prescribed form no. 66 before the Official Liquidator and affidavit in proof of debt was also filed before the Liquidator. As per the said affidavit, the Company in liquidation is in arrears of electricity dues to the tune of Rs. 3,12,64,250/ -. As per the Provisions contained in Dues recoveries Act, 1961, the debts of MPSEB can be recovered as per the procedure prescribed in the said Act. A recovery Certificate is issued to the tune of Rs. 3,12,64,250/- and properties situated in Madhya Pradesh, meghnagar were about to be auctioned. As per the provisions contained in the said Act, the dues of the mpseb have preferential claims as arrears of land revenue. He has further submitted that the scheme referred to by the applicant has expired way back in the year 2000 and applicants request for opening of the factory premises for the purpose of cleaning and initial trial work should not be accepted as unless and until the applicant shall deposit at least 10% of the outstanding dues + security deposit amount with the respondent No. 9 and unless and until an undertaking to the effect that the applicant will continue to pay all the installments as per the scheme as well as running bill, the said permission should not be granted. ( 17 ) ON behalf of respondent No. 2 i. e. Bank of baroda, additional affidavit was filed on 30. 06. 2004 wherein it is stated that the Bank has to recover an amount of Rs. 45. 77 Crores as on 31. 03. 2004 from the company in Liquidation. The Bank has already filed an application before the D. R. T. , Ahmedabad. It is further stated that since the Company was closed since 1997 and the matter was pending before BIFR and it was a non-performing assets since 1997. So far as the Bank is concerned, the Bank management has given very serious thoughts to consider the proposal submitted by the promoters of the Company in liquidation and if the company is not revived and the properties of the Company were to be sold, the Bank would not recover the amount even to the extent of the amount offered in one time settlement and keeping this point in mind, the proposal was considered by the Bank management for revival of the company and if this Court stays the order of winding-up, the Bank would get Rs. 81. 37 Lacs upfront within a period of one month and thereafter, amount as proposed in the scheme of revival would be paid to the Bank by the promoters. It is further stated in the said affidavit that the respondent Bank has no objection if the winding up order is stayed and the Company is revived only after taking into consideration the financial interest of the bank and public interest at large. ( 18 ) MR. T. R. Mishra, learned advocate appearing for the respondent Nos. 10 to 18 i. e. workers of the company has supported the application and has placed affidavits-in-reply of some of the workers. He has submitted that according to the record, gross assets of the Company is about Rs. 17 Crores and net assets are to the tune of Rs. 5 Crores. As against this, the liability of the Company in the form of loan taken from financial institutions and Banks is in the range of around Rs. 25 Crores. If the Liquidator takes the possession of the assets of the Company and proceeds further to auction the plant, machinery, land and building, the workmen would not get their legitimate dues. As against this, the liability of the Company in the form of loan taken from financial institutions and Banks is in the range of around Rs. 25 Crores. If the Liquidator takes the possession of the assets of the Company and proceeds further to auction the plant, machinery, land and building, the workmen would not get their legitimate dues. All the assets and properties of the Company are fully protected by the management of the Company and the management has deployed 4 to 8 Security Staff in all the three shifts for the protection of the property of the company. Mr. Mishra has, therefore, submitted that if the Company is revived and the production is started, the workers would cooperate with the Management and try to work hard to achieve the targeted production and if the workers are reabsorbed, this would help the workers in getting their livelihood. ( 19 ) THE Court has heard at length the learned advocates appearing for the respective parties and the court has also gone through their respective pleadings as well as the documents attached therewith. The applicants prayer for revocation of the winding-up order passed by this Court in Company Petition No. 69 of 2002 and/or staying the further proceedings so far as they relate to the winding up of the Company and/or to grant the permission to the applicant to resume manufacturing activities of the Company in liquidation can be examined in the peculiar facts and circumstances of the present case. It is an admitted position that the Company in liquidation has closed down its manufacturing activities way back in 1997 and the Company being a sick industrial company, its reference was pending before BIFR. The said reference was decided and the BIFR has forwarded its opinion on 07. 03. 2002 wherein it was recommended that it was just, equitable and in the public interest that M/s. Jindal Ispat Castings Limited should be wound up under section 20 (1) of Sick Industrial Companies (Special provision) Act, 1985. Even during the pendency of the companys reference before BIFR, several opportunities were given to the company. 03. 2002 wherein it was recommended that it was just, equitable and in the public interest that M/s. Jindal Ispat Castings Limited should be wound up under section 20 (1) of Sick Industrial Companies (Special provision) Act, 1985. Even during the pendency of the companys reference before BIFR, several opportunities were given to the company. It was, however, not possible for the Company to work out any acceptable revival scheme for the Company enabling to make its networth exceed the accumulated losses within a reasonable time by meeting all its financial obligations and that there was no possibility for the Company to become viable in future. The BIFR has also specifically recorded in its meeting of the hearing held on 13. 02. 2002 that the promoters and the company had been enjoying the protection of SICA unduly despite the fact that they were with the Board for more than the period normally required for rehabilitation and they have not come out with any acceptable viable proposal nor had they come to any understanding with the secured creditors with respect to settlement of their accounts in a manner acceptable to them. It is only after recording the above finding, the BIFR had firmed an opinion to the effect that it was just and equitable that the Company should be wound up and confirmed its earlier prima facie opinion to wind up the Company in terms of section 20 (1) of the Act. ( 20 ) PURSUANT to the aforesaid opinion of the BIFR and considering the facts and circumstances of the case, this court has passed the winding up order on 12. 11. 2003. The said order was challenged by the Company before the division Bench of this Court by filing O. J. Appeal No. 27 of 2003. To test the bonafide of the Company, the division Bench of this Court has passed an order on 04. 08. 2003 directing the Official Liquidator to maintain status quo with respect to the assets of the Company on condition that the Company shall deposit Rs. 1 Crore before the Court on or before 01. 09. 2003. The Division bench has made it very clear that the interim order was passed only with a view to test the bonafides of the company and with a view to see to it that the final settlement, if any between the parties was arrived at. 1 Crore before the Court on or before 01. 09. 2003. The Division bench has made it very clear that the interim order was passed only with a view to test the bonafides of the company and with a view to see to it that the final settlement, if any between the parties was arrived at. However, the Company was unable to deposit Rs. 1 Crore and hence, on 01. 09. 2003, the Division Bench has observed that the only possible conclusion which could be drawn was that it was not possible for the Company to pay the dues. However, the matter was adjourned to 03. 09. 2003 only with a view to make the necessary statement before the Court after receipt of the instruction from the company. On 04. 09. 2003, the O. J. Appeal was withdrawn with a view to raise appropriate contentions before the learned Single Judge of this Court and the said appeal was accordingly dismissed as withdrawn. ( 21 ) FROM 04. 09. 2003 till April, 2004, nothing was done either by the Company or by any one from the ex-Management of the Company. The present application was filed only on 29. 04. 2004 and notice was issued on 30. 04. 2004 making it returnable on 15. 06. 2004. After 15. 06. 2004, pending this application, the Court has protected the applicant by restraining the Official liquidator to take possession of the properties of the company so as to consider the merits of the present application. As far as the scheme proposed by the applicant is concerned, there is nothing new in the scheme. It was already there before the BIFR and it could not be worked out because of the lack of requisite funds. The applicant has now come out with the proposal that one Adhunik Cement Pvt. Ltd. has shown its willingness to provide an amount of Rs. 170 Lacs and the said amount has been deposited with the Syndicate Bank, alwar, Rajasthan. The Certificate issued by Syndicate bank on 27. 04. 2004 is placed on record which certifies that M/s. Adhunik Cement Pvt. Ltd. have placed with the Bank an amount of Rs. 170 Lacs and the said amount has been deposited with the Syndicate Bank, alwar, Rajasthan. The Certificate issued by Syndicate bank on 27. 04. 2004 is placed on record which certifies that M/s. Adhunik Cement Pvt. Ltd. have placed with the Bank an amount of Rs. 170 Lacs in F. D. R. and the said F. D. R. is held by the Bank in terms of the affidavit filed before the Bank and the said funds would be realised as per the order of this Court. The applicant has also produced on record an affidavit of one mr. N. Somnathan, Director of M/s. Adhunik Cement Pvt. Ltd. which interalia states that he has been given to understand that the promoters/ex-Directors have proposed a scheme of revival of the Company and for that purpose, the Company requires funds of Rs. 229. 09 Lacs so as to successfully carry out and complete the scheme of revival as proposed and pending before this Court for consideration. It is also stated in the said affidavit that the said Company, namely, M/s. Adhunik Cement Pvt. Ltd. has agreed to provide fund of Rs. 229. 09 Lacs to the Company in liquidation specifically for the purpose of implementation of the revival scheme and the said fund would not be utilised for any other purpose. M/s. Adhunik Cement Pvt. Ltd. would not claim any interest on the said unsecured loans before all secured creditors are paid and it would not demand repayment of the said loan before the scheme of revival is fully implemented and carried out and all payments to all the secured creditors are made as per the scheme of revival. It was also stated that the balance amount of Rs. 59. 09 Lacs would be given by M/s. Adhunik Cement Pvt. Ltd. to the company within seven days from the date as may be ordered by this Court and would produce a confirmatory letter from Syndicate Bank, Alwar to this effect. ( 22 ) THE applicant has further submitted in support of its claim for revival of the Company certain confirmed orders received from various parties and three of such letters are produced along with the application. ( 22 ) THE applicant has further submitted in support of its claim for revival of the Company certain confirmed orders received from various parties and three of such letters are produced along with the application. The whole emphasis of the applicant is that since the steel market has been changed and there are bright prospects so far as the steel industry is concerned and there is already a shortage of steel supply in the market, the application would be considered in light of these changed circumstances and the applicant would be permitted to start the manufacturing activities of the Company as an agent of the Official Liquidator and it should be in the complete supervision and control of either of the official Liquidator or any person appointed by this court. ( 23 ) THE above circumstances enumerated by the applicant appears to be attractive but its actual implementation is hardly possible. The Company is closed for the last more than seven years. Several attempts were made in the past and they have failed. The conduct of the promoters and/or Ex-Directors of the Company do not generate the confidence of the authorities and looking to the huge liability towards secured, unsecured and statutory creditors, the funds which are to be brought in did not seem to be adequate. Even otherwise, the Secured Creditor, namely, IFCI has objected to any relief which is to be granted in the present application as its dues are outstanding since 1994. G. E. B. as well as MPSEB have also strongly objected to the proposal for revival of the scheme as each one of their dues are also more than Rs. 3 Crores. Bank of Baroda, of course, has agreed to the proposal for one time settlement and the workers have also shown their inclination to support the revival scheme of the Company. However, the facts which are emerged from the record do not lead to believe that the present applicant would be in a position to discharge all the liabilities of the Company and restart the company even in a phased manner. It appears to the Court that the present application is nothing but to prevent further actions to be taken by the Official Liquidator pursuant to the winding up order passed by this Court and the Ex-Management does not want to part with the possession of the assets of the Company. It appears to the Court that the present application is nothing but to prevent further actions to be taken by the Official Liquidator pursuant to the winding up order passed by this Court and the Ex-Management does not want to part with the possession of the assets of the Company. It is with that intention only, the present application seems to have been filed before this Court. The authorities relied on by Mr. Nanavati does not lead to the applicants case any further as there is no dispute about the proposition that this Court has got enough power to stay the winding up of a Company under Section 466 of the Companies Act, 1956. In the case of V. B. PUROHIT V/s. GADAG AND jambukeshwara, 56 COMPANY CASES 360 (SUPRA), the karnataka High Court has specifically held that the company court possesses the power to grant a stay of a winding up of a company even when it is a case of voluntary winding up, provided the facts justified the stay. The Court is of the view that looking to the present facts and circumstances of the case, it is not a fit case where the Court has to exercise its power under section 466 of the Companies Act, 1956 to stay the winding up of the Company. Even in the case of NEW swadeshi MILLS OF AHMEDABAD LTD. V/s. DYE-CHEM corporation, 59 COMPANY CASES 183 (SUPRA) after laying down the proposition that it is the duty of the Court to welcome revival rather than affirm the death of the company and for that purpose, the Court is called upon to make a discreet exercise, the Court has taken the view in that matter that it was proper that the company be ordered to be wound up, since there were huge debts, far beyond the means of the company to meet and there was no reasonable prospect of the company reviving its normal operations. While taking over all view of the matter and considering the entire facts and circumstances of the case, this Court is also of the same view that since there were huge debts far beyond the means of the Company to meet and all attempts made in the past have failed and despite several opportunities, no concrete proposal worth its name came out and the present proposal also does not inspire any sort of confidence, there is no reasonable prospect of the Company being revived. ( 24 ) IN view of the above discussion, the Court is not inclined to grant any relief in this application and hence, the application is rejected. The stay granted earlier by this Court is vacated. No order as to costs. ( 25 ) AFTER the judgment is pronounced, Mr. B. T. Rao, learned advocate appearing for the applicant has prayed for extension of stay restraining the Official Liquidator to take possession. However, since the matter is already decided and Court has rejected the application, there is no question of granting or extending the stay and hence, the request is rejected. .