Rajasthan State Agro Industries ... vs Unknown
2021 Latest Caselaw 7686 Raj/2

       HIGH COURT OF JUDICATURE FOR RAJASTHAN
                    BENCH AT JAIPUR
            S.B. Company Application No.130/2000
Rajasthan State Agro Industries Corporation                     ----Petitioner
                                    Versus
                                                                ----Respondents

Connected With S.B. Company Petition No.30/1996 Rajasthan State Agro Industries Corporation ----Petitioner Versus

----Respondent

For Appellant(s) : Mr. Gaurav Sharma Saraswat, Adv. for Official Liquidator Mr.Ruvit Kumar, Official Liquidator For Respondent(s) : Mr.M.S.Singhvi, Advocate General with Mr.Sheetanshu Sharma, Adv.

HON'BLE MR. JUSTICE ASHOK KUMAR GAUR Order 16/12/2021

IA No.4/2019:-

The applicant-State of Rajasthan through Additional Chief

Secretary, Agriculture Department, Government Secretariat,

Jaipur has filed the present miscellaneous application under

Sections 391 & 443 of the Companies Act, 1956 read with

Sections 230 and 273 of the Companies Act, 2013, seeking revival

of the Rajasthan State Agro Industries Corporation Limited.

The Company Petition No.30/1996 was filed by the Rajasthan

State Agro Industries Corporation Limited (hereinafter referred to

as 'the Company') for the purpose of its voluntary winding up.

This Court vide order dated 03.09.1997 directed the winding

up of the company and Official Liquidator was also appointed.

The matter was pending before this Court and vide order

dated 09.08.2018 had directed the State Government to hand

over the charge of the properties of the Company, which is a

Government Company, to the Official Liquidator.

(2 of 8) [COAP No.130/2000]

The direction dated 09.08.2018 was followed by the State of

Rajasthan and handed over the charge of all the properties of the

Company to the Official Liquidator (except two properties situated

at Chittorgarh and Hanumangarh) and another property situated

at Subhash Nagar, Jaipur was allowed to be kept for Directorate of

Civil Defence.

The applicant has submitted that there has been steep rise in

value of the properties of the Company and as such the State

Cabinet vide its Cabinet Memo No.97/2016 took a decision to

withdraw the winding up petition and to get back the properties

from the Official Liquidator.

The matter was pending before this Court and an application

was also moved on 24.01.2019 with a prayer for handing over the

assets of the Company to the State Government.

The applicant has pleaded that the matter was again

considered in the Cabinet and as per Cabinet Memo No.87/2019

proposal was approved for making payment of entire outstanding

amount of the Company.

The applicant has submitted that all the entire share-holding

of the company is owned by the State Government and its officials

and as per report of M/s Rajvanshi Insolvency Professional Private

Limited dated 05.07.2018, the total value of the assets of the

company is worked out to be Rs.119.11 Crores, whereas the third

party liabilities of the Company other than that of the State

Government is Rs.4.11 Crores. The applicant-State Government

has informed that they will pay-off other liability and also decided

to take the liability of other part of the loan, which was advanced

by the State Government to the Company.

(3 of 8) [COAP No.130/2000]

The applicant has submitted that there are prospects of

revival of the Company and for development of the properties of

the Company since entire shareholding is owned by the State

Government/its officials. It is prayed that in the interest of justice,

the winding up order of the Company may be reviewed.

The applicant has further submitted that in view of the

provisions contained in Section 391 of the Companies Act, 1956

read with Section 230 of the Companies Act, 2013, it is always

open to the members of the Company to propose an

arrangement/compromise even in respect of a Company, which is

being wound up. The applicant has submitted that since members

of the Company being the State Government itself, the decision

has been taken by working out the arrangements for paying off

the liabilities of the Company and as such no cause survives for

winding up of the Company.

The applicant has prayed that valuation of the assets of the

company has already been furnished before this Court and except

for the liabilities mentioned in the said report, no other liabilities

remain.

The applicant has prayed that their application may be

allowed, in view of the decision taken by the State Government to

pay off the third party dues and take over the remaining loan

advanced by the State Government to the Company and

straightway be permitted to take over the Company i.e. Rajasthan

State Agro Industries Corporation Limited or in alternative winding

up order of the Company be recalled/reviewed and the company

may be directed to be revived by the share-holders of the

Company namely, the State Government and its nominee.

The Official Liquidator has filed reply to the application.

(4 of 8) [COAP No.130/2000]

The Official Liquidator has submitted that possession of the

assets of the Company pursuant to the order of the High Court

and as per Sections 456 and 460 of the Companies Act, 1956, the

Official Liquidator has appointed security guards to protect the

assets of the Company in liquidation and also got the valuation

work of the property from the panel valuer.

The Official Liquidator has submitted that since the company

was in liquidation from 1997 to 2018 and the State Government

has filed applications beleatedly and possession of the property

has already been taken.

The Official Liquidator has further submitted in his reply that

the State Government has not filed proper proposal regarding

resources of fund and payment of the liabilities to the concerned

parties within a time bound manner with approval of the

shareholders and creditor of the company and the same can only

be done, as per the directions issued by this Court after appointing

the Chairman.

The Official Liquidator has also objected that since proper

scheme of revival has not been submitted before this Court for its

approval and the same is required to be furnished before this

Court and as such the permission sought by the applicant may not

be granted.

The applicant has filed rejoinder to the reply and has

reiterated that since entire shareholding of the Company owned

by the State Government, as such it is not open for the Official

Liquidator to object that the State Government has not shown the

resources of the fund from the payment of liability to the party

concerned.

(5 of 8) [COAP No.130/2000]

The applicant has reiterated that the scheme of revival has

already been approved by the State Cabinet and further submitted

that the scheme has been submitted by the shareholder itself and

major creditor is the State Government and other creditors

constitutes only around 10% of the total dues and as such State

has full authority to seek for revival of the company.

Learned counsel Mr.Gaurav Sharma Saraswat appearing on

behalf of the Official Liquidator, submitted that there has been

amendment in the Companies Act, 2013 and by virtue of provision

contained in Section 434, the matter if at all requires revival of the

company or recalling the order of winding up, the same now needs

to be transferred to the National Company Law Tribunal.

Learned counsel has further submitted that the proposed

arrangement or compromise as alleged by the applicant can

always be looked into by the National Company Law Tribunal and

this Court may not exercise its power since jurisdiction now lies

with the National Company Law Tribunal.

Learned Advocate General Mr.M.S.Singhvi has submitted that

when the matter was taken up by this Court on 21.01.2020, the

Official Liquidator had principally agreed not to contest the

recalling application, but only submitted that the expenditures,

which were incurred by the Official Liquidator after winding up

order passed by the High Court and the State Government was

required to reimburse the said expenditures incurred before

recalling of the winding up order.

Learned counsel further submitted that amendment in the

Act of 2013 relating to transfer of the Companies Petitions, will not

apply in the present facts of the case and this Court alone can

(6 of 8) [COAP No.130/2000]

recall the order of winding up and revival of the Company can also

be permitted by the High Court.

Learned counsel for the State has placed reliance on the

judgment passed by the High Court of Gujarat at Ahmedabad in

the case of Prasad Mills Ltd. Vs. Bhupendra Bhagwatprasad

Patel (R/O.J.Appeal No.11/2017 and Civil Application (OJ)

No.1/2017) decided on 09.07.2018.

Learned counsel also placed reliance on the judgment passed

by the High Court of Delhi in the case of Sunil Gandhi and Ors.

Vs. A.N.Buildwell Private Limited and Ors. (Co.Appl.(M)

115/2016, Co.Pet.704/2017, 948, 1061/2016 and Cri.O.

(Co.) 11/2016 decided on 15.03.2017.

I have heard the submissions made by learned counsel for

the parties and perused the material available on record.

This Court finds that the Company Petition No.30/1996 was

filed under Section 433(a), (e) & (f) read with Section 439 (a) of

the Companies Act, 1956 and the said company petition was

allowed vide order dated 03.09.1997.

This Court further finds that Rajasthan State Agro Industries

Corporation Limited was a Government Company within meaning

of Section 617 of the Companies Act, 1956.

The Company had sought voluntary winding up and this

Court considering all aspects of the matter, allowed the winding up

petition.

This Court further finds that the company is wholly owned by

the State Government and its officials and as such if the State

Cabinet has taken a decision for revival of the company, the

applicant has come forward before this Court for revival of the

company and further for recalling the order of winding up.

(7 of 8) [COAP No.130/2000]

This Court further finds that the State Cabinet has approved

the proposal for making payment of entire outstanding of the

Company and the expenses incurred by the Official Liquidator

have also been undertaken to be paid to them.

This Court further finds that the State Government while

taking the decision for revival of the company found that the

properties of the company are of much more value and by putting

the property on auction in winding up petition, the Official

Liquidator will ultimately reimburse the entire amount to the State

Government as the shareholding of the company is of the State

Government itself.

This Court further finds that decision of the State

Government is not tainted with any mala-fide intention or to

defraud any creditor and as such considering the bona-fides of the

State Government, the applications filed by the State, needs to be

considered in the same perspective.

As far as objection with regard to revival of the company by

recalling the order of winding up is concerned, the Official

Liquidator at one point of time had principally agreed and only

objection was with regard to the payment of expenses incurred in

maintaining the property, after possession was handed over to the

Official Liquidator.

Learned Advocate General Mr.M.S.Singhvi has made a

statement before this Court that whatever expenses have been

incurred for maintenance of the property, the same have already

been reimbursed to the Official Liquidator and further the State

will pay the expenses till the properties are returned back to the

State Government.

(8 of 8) [COAP No.130/2000]

This Court, however, finds that the technical objection has

been raised about transfer of the present applications, as per

provisions contained in Section 434 of the Act, 2013.

This Court finds that though Sub-clause (c) of Section 434 of

the Act, 2013, speaks of transfer of certain proceedings to the

National Company Law Tribunal including the proceedings relating

to arbitration, compromise, arrangements and reconstruction and

winding up of the Companies pending before the High Court,

however, in the present case, since the order of winding up has

already been passed of a Government Company and the State

files an application for recalling the order passed by this Court of

winding up, the same can be done by the High Court.

This Court further finds that the Delhi High Court in the case

of Sunil Gandhi and Ors. Vs. A.N.Buildwell Private Limited

and Ors. (supra) and the Gujarat High Court in the case of

Prasad Mills Ltd. Vs. Bhupendra Bhagwatprasad Patel

(supra) has considered the scope of Section 434 for transfer of

cases to the National Company Law Tribunal and found that since

winding up order has been passed by the High Court and such

order can only be recalled by the High court and not by any other

form, which is created.

This Court, accordingly finds that the application filed by the

State of Rajasthan deserves to be allowed and winding up order

dated 03.09.1997 is recalled and the Company-Rajasthan State

Agro Industries Corporation Limited, is revived.

List on 06.01.2022.

(ASHOK KUMAR GAUR),J Monika/Ramesh Vaishnav

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