Judgment on New Jahangir Vakil Mills' Assets Transfer and Financial Management

State of Gujarat Versus Official Liquidator of GSTC. Ltd.

State of Gujarat Versus Official Liquidator of GSTC. Ltd. - [2006] 69 SCL 151 (GUJ.) Issues Involved:

1. Confirmation of sale of assets of New Jahangir Vakil Mills (NJVM) in liquidation.
2. Authority of the Official Liquidator to sell land belonging to Bhavnagar Municipal Corporation.
3. Payment of dues to secured creditors and other creditors.
4. Discharge of liabilities towards workers.
5. Transfer of immovable assets to the State Government.
6. Investigation of fire damage and assessment of damages.
7. Resolution of inter se disputes between State Government and Bhavnagar Municipal Corporation.
8. Handling of surplus funds by the Official Liquidator.

Detailed Analysis:

1. Confirmation of Sale of Assets:
Company Application No. 16 of 2000 filed by 21st Century Developers and Company Application No. 26 of 2000 filed by Mr. Rajabhai K. Kangadh sought confirmation of sale of NJVM's assets. The Court decided that these applications became infructuous due to the decision to transfer the immovable properties to the State Government.

2. Authority of the Official Liquidator:
Company Applications Nos. 44 and 186 of 2000 by Bhavnagar Municipal Corporation questioned the Official Liquidator's authority to sell land belonging to the Corporation. These applications were disposed of with the understanding that the inter se disputes between the State Government and the Corporation would be resolved amicably.

3. Payment of Dues to Creditors:
Company Application No. 43 of 2000 by State Bank of Saurashtra requested that sale proceeds not be disbursed without first paying the bank's dues. The Court noted that the State Government had already discharged these dues, rendering the application infructuous.

4. Discharge of Liabilities Towards Workers:
Company Application No. 268 of 2004 by Mill Kamdar Union sought unpaid wages and Provident Fund dues. The Court noted that the State Government had undertaken to discharge any liabilities towards workers, and since a related Special Civil Application was pending, this application was disposed of without further orders.

5. Transfer of Immovable Assets:
Company Application No. 237 of 2004 by the State of Gujarat sought the transfer of NJVM's immovable assets to the State. The Court directed the Official Liquidator to hand over these properties to the State Government, which was the sole secured creditor and major shareholder, subject to the State Government filing an undertaking to discharge any future liabilities.

6. Investigation of Fire Damage:
Official Liquidator Report No. 23 of 2004 sought directions to investigate the cause of a fire and assess damages. The Court directed the State Government to pursue the matter with the insurance company and take appropriate action against the purchaser for any damages.

7. Resolution of Inter Se Disputes:
The Court acknowledged the inter se disputes between the State Government and Bhavnagar Municipal Corporation regarding the possession of the Mills Company but did not delve into the merits, leaving it to the parties to resolve amicably.

8. Handling of Surplus Funds:
The Court directed the Official Liquidator to render accounts of the funds available, retain part for contingencies, and hand over the balance to the State Government. The Official Liquidator was found to have sufficient funds to cover all liabilities, and any excess would be transferred to the State Government.

Conclusion:
The Court's comprehensive judgment addressed multiple applications and reports, primarily focusing on the transfer of NJVM's immovable assets to the State Government, the discharge of liabilities, and the handling of surplus funds by the Official Liquidator. The decision aimed to resolve the interconnected issues efficiently, ensuring that the State Government, as the major creditor and shareholder, would manage the remaining assets and liabilities.