M/S Belwal Spinning Mills Ltd. vs Official Liquidator & Ors.
2011 Latest Caselaw 1884 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+                       COMPANY APPEAL No. 68/2003


%                             Date of Decision:   31st March, 2011


M/S BELWAL SPINNING MILLS LTD.                          ... APPELLANT

                        Through:   Ms. Alpana Poddar, Advocate.

                                   Versus


OFFICIAL LIQUIDATOR & ORS.                            ... DEFENDANTS

                        Through:   Ms. Purnima Sethi, Advocate for OL
                                   Mr. Jasmeet Singh, Advocate for State
                                   of Uttrakhand.
                                   Mr. Amit Gaurav, Advocate for Labour
                                   Union.
                                   Mr. Sanjay Bhatt, Advocate for IDBI.
                                   Mr. Rahul Tyagi, Advocate for IFCI.
                                   Mr. Vipin Pillai, Advocate for Kotak
                                   Mahindra Bank.


CORAM:
HON'BLE MR. JUSTICE A.K.SIKRI
HON'BLE MR. JUSTICE M.L.MEHTA


1. Whether the Reporters of local papers                 NO
   may be allowed to see the judgment?

2. To be referred to Reporter or not?                    NO

3. Whether the judgment should be                        NO
   reported in the Digest?




Co. Appeal No.68/2003                                             Page 1 of 6
 A.K. SIKRI, J. (Oral)

C.M. Nos. 4195, 12634, 12635/2010 and 6651/2011 In Co. Appl. No. 68/2003 *

1. The appellant, herein, which is an Industrial undertaking,

became a sick company because of which it filed reference to

the Board of Industrial & Financial Reconstruction ('BIFR')

under the provision of State Level Inter Institutional

Committee ('SLIIC'). The BIFR after examining the matter,

gave a finding that it was not possible to revive this company

and it was just and equitable to wind up the same. On this

basis, a reference was made to the Company Judge of this

Court to wind up all the companies which were registered as

C.P. No. 145/1999. In the said company petition the learned

Single Judge passed an order dated 12th December, 2003

directing the winding up of the appellant company.

2. Against that order, present appeal, i.e., Co. A. No. 68/2003

was preferred by the Company. During the pendency of this

appeal, the Company came out with various suggestions

which have settled the matter with different secured creditors.

Opportunity in this behalf was given to the appellant from

time to time. Ultimately, finding that the company would not

be in a position to settle the dues of the creditors, the appeal

was dismissed vide orders dated 27th January, 2010. Against

that order said writ petition was filed by the Company. In the

said Special Leave Petition also the company came forward

with a proposal to settle the dues of the secured creditors and

submitted that it was possible to revive this company. In the

said SLP, the Apex Court passed an order permitting the

Company to move an application in this appeal for a direction

by this Court to consider the same. It was in this background

that the aforesaid applications are filed. The Company has

also, along with one application, filed scheme of

reconstruction/revival. The matter was taken up on the basis

of the said scheme of rehabilitation from time to time when

this Court was informed about the settlement arrived at by the

appellant company with various unsecured creditors. Almost

all the secured creditors settled the matter with the company

except IDBI. Today, we are informed that the Company has

been able to arrive at a settlement even with IDBI. Learned

counsel appearing for IDBI confirms this decision and states

that he has received instructions in this behalf on telephone

by his clients, thus, he is not aware about the terms.

3. Be that as it may, in view of the aforesaid development,

namely, the company been able to settle with all the secured

creditors, we recall our order dated 27th January, 2010

dismissing this appeal. As a consequence, order dated 12 th

December, 2003, passed by the Company Judge directing

winding up of these companies are also set aside.

4. The company has to make payment to various creditors in

terms of settlement arrived at with them. Though, some

creditors are fully satisfied, however, in respect of some

creditors dues are fully not paid. As far as IDBI is concerned a

sum of Rs.25 lakhs has been paid. As per learned counsel for

the Company, balance amount of Rs.2.05 crores is yet to be

paid since the dues of IDBI were settled at Rs.2.35 crores.

5. Learned counsel for the IFCI also stated that the Company is

yet to pay interest on the delay claimed. Ms. Purnima Sethi,

learned counsel for Official Liquidator ('OL') also claims that a

sum of Rs.11 lakhs is payable by the OL to the security agency

which was engaged to save goods. The property after this

decision was taken over by OL and the liability is also to be

discharged by the Company, in addition the charges of the OL

are also to be satisfied. As far as satisfaction of the claims of 6

crores is concerned, this aspect can be looked into by the

learned Company Judge. We may note that the workers have

supported the scheme of restoration/rehabilitation which is

placed on record by the executive management. They claim

that it is in their interest that company gets revival as early as

possible so that it starts production which will enable the

workers to get their wages at the earliest.

6. All the aforesaid applications and appeal, are accordingly,

disposed of with the following findings:-

1. OL shall de-seal the premises and hand over the same to the management of the appellant Company within two weeks, however before the possession of the assessee company are handed over to the management all the dues of the OL shall be settled/paid. The OL shall inform the dues payable within two days.

2. It would be open to the learned Company Judge to give directions for payment of dues of different creditors and further directions as may be required in view for the rehabilitation/restoration as promulgated by the management of the company.

3. During the pendency of this appeal, the appellant had deposited Rs.1.50 crores in a fixed deposit, out of which a sum of Rs.15 lakhs has already been released to Regional Provident Fund Commissioner. The IDBI shall be paid a sum of Rs.1.30 crores out of this amount by the Registry. Out of the balance amount, dues of OL shall also be settled. In case there is any deficiency, the same shall be met by learned Company Judge.

7. We are informed that the matter is coming up before learned

Single Judge on 3rd May, 2011. It would be open to the

learned Single Judge to pass any other order and given any

direction in the matter.

8. A copy of this order be given dasti to learned counsel for the

parties under the signature of Court Master.

                                                      A.K. SIKRI
                                                       (JUDGE)




                                                      M.L.MEHTA
MARCH 31, 2011                                         (JUDGE)
AK