Union Of India vs Shivalik Cellulose (P) Ltd. And ...
1990 Latest Caselaw 514 Del

JUDGMENT

N.N. Goswami, J.

(1) This appeal by the Union of India is directed against the order dated February 15, 1990 passed by the learned Company Judge, whereby the winding up order dated December 9, 1989 passed against respondent No. I. company was rescinded and the application filed by Industrial Development Bank of India (hereinafter referred to as 1DBI') under section 50 of the Industrial Reconstruction Bank of India Act, 1984 (hereinafter referred to as 'the Act') was allowed and the scheme was drawn.

(2) Admittedly around Rs. 700.00 lakhs are due to the Financial Institutions from the Company in question. The winding up of the Company was not likely to result in recovery of the said dues. In order to revive and rehabilitate the Company the scheme was propounded and an application under section 50 of the Act was filed. All the Financial Institutions were represented before the learned Company Judge and their case was that the scheme will be the only way to rehabilitate the industrial concern and to ensure repayment of loans to Financial Institutions/Banks and also for repayment of Statutory loans. The learned Company Judge after looking into the entire matter in details came to the conclusion that the scheme ensures the reconstruction revival and rehabilitation of the industrial concern in question. The learned Judge was further satisfied that the reconstruction/revival and rehabilitation will ensure an increase in the production of goods needed by the community. Consequently the application under section 50 of the Act was allowed and the scheme was drawn.

(3) The Union of India has challenged the scheme. The main contention of the learned counsel of the appellant was that the scheme does not provide for existing employees of the company which is mandatory under section 49(7) of the Act. This contention has obviously no merit for the simple reason that the company is closed for the last several years and there is nothing to show if there is any existing employee of the company. In any case no employee has put forward any claim before the learned Company Judge or in this appeal. The other contention of the learned counsel was that all the Financial Institutions were not satisfied with the scheme. This contention is again imaginary as all the Financial Institutions were represented before the learned Company Judge as also before us. They all expressed their approval and wanted the scheme to go through. In fact the scheme is very much in the interest of the Financial Institutions and that is the only way and possibility for recovering their amounts. In fact the entire scheme has been examined by Industrial Development Bank of India in consultation with all Financial Institutions and only thereafter the application under section 50 of the Act was filed.

(4) After giving our careful consideration to the entire facts of the case, we are of the opinion that the appeal filed is ill advised and is not in the interest of anyone, made so the Financial Institutions which are the parties directly concerned. Thus, we find no merit in this appeal and dismiss the same.

(5) Counsel for respondent No. 5 stated that he had filed cross-objections which he may be permitted to agitate before the learned Company Judge. There can be no objection in accepting this submission. The respondent No. 5 is at liberty to raise his objections before the learned Company Judge. With these observations the appeal is dismissed.