2017 (5) TMI 374 - HC - Companies Law

Property Sale Offer Rejected, Winding-Up Order Issued for Failure to Repay Creditors

The court concluded that despite an offer by DAL to settle GAL's dues by selling the property at 1, Sikandra Road, New Delhi, GAL failed to repay its ... Attachment orders - Official Liquidator take over possession of the subject property - Held that:- There are two inescapable conclusions that are axiomatic: (a) That DAL had offered attachment of the subject property to the Official Liquidator to discharge and pay all the existing and future liabilities, including all the dues owed to various secured and unsecured creditors of GAL. (b) Despite repeated opportunities both, DAL and GAL have failed, avoided and neglected to disburse and discharge the said outstanding liability. Therefore, in view of the foregoing facts and circumstances, it is considered appropriate, at this stage in the first instance, whilst awaiting the decision of the Hon’ble Supreme Court in the Special Leave Petitions instituted on behalf of Taneja and DAL, to direct the Official Liquidator to comply with the direction issued by this Court by way of the order dated 08.10.2013 (relevant portion of which has been reproduced in paragraph (12) hereinabove), insofar as, it required the Official Liquidator to take over possession of the subject property. The Official Liquidator is directed to comply with the direction contained in the order dated 08.10.2013, forthwith. 24. The order dated 11.09.2014 (reproduced in paragraph (15) hereinabove), rendered by this Court is modified accordingly. The Official Liquidator is directed to file a report in compliance with the present order, on or before the next date of hearing. Issues Involved:1. Winding up petition against M/s Ganga Automobiles Limited (GAL).2. Attachment and sale of property at 1, Sikandra Road, New Delhi.3. Review and modification of court orders regarding the attachment and sale of the property.4. Claims and liabilities of unsecured creditors and workmen.5. Claims of the Income Tax Department.6. Compliance with court orders by the Official Liquidator.Detailed Analysis:1. Winding up petition against M/s Ganga Automobiles Limited (GAL):A petition for winding up was filed by M/s Rocksmelt Company (India) against GAL in 1997. During the proceedings, Mr. G.S. Suri, Chairman of Delhi Automobiles Limited (DAL), offered to pay GAL’s unsettled dues by selling the property at 1, Sikandra Road, New Delhi. The court accepted this offer and ordered the property to be sold under its supervision if not sold within three and a half months.2. Attachment and sale of property at 1, Sikandra Road, New Delhi:On 02.02.1998, the court ordered that the property would be deemed attached and sold if GAL’s dues were not settled within the stipulated period. Mr. G.S. Suri later sought to withdraw his statement, claiming lack of authority, but the court held that the request to withdraw would be considered only if a review of the order was sought. Subsequent orders modified the initial order, but GAL failed to repay its creditors, leading to a winding-up order on 18.08.1998. The court eventually held that the property stood attached and was liable to be sold.3. Review and modification of court orders regarding the attachment and sale of the property:DAL filed applications seeking review and amendment of the order dated 02.02.1998, which were dismissed for non-prosecution. The court later upheld the attachment and sale order, rejecting appeals by DAL and Taneja Developers. The Division Bench found that the attachment order was never vacated or modified and upheld the order directing the Official Liquidator to take possession and sell the property.4. Claims and liabilities of unsecured creditors and workmen:The Official Liquidator received claims from unsecured creditors and workmen, which were scrutinized and adjudicated. The total liability towards unsecured creditors and workmen was determined to be Rs. 6,42,63,759.15, excluding interest. The claims adjudicated included those of M/s Goyal M.G. Gases (P) Ltd. and M/s Poysha Oxygen (P) Ltd., among others.5. Claims of the Income Tax Department:The Income Tax Department raised a claim of Rs. 58,54,43,000 towards unpaid income tax dues of GAL for various assessment years. However, the Official Liquidator rejected the claim due to lack of documentary proof. The Income Tax Department filed an affidavit on 17.03.2017, raising the claim again.6. Compliance with court orders by the Official Liquidator:Despite court orders, the Official Liquidator did not take steps to secure possession of the property. The court directed the Official Liquidator to comply with the order dated 08.10.2013, which required taking possession of the property. The court also directed the Official Liquidator to file a compliance report before the next hearing.Conclusion:The court concluded that DAL had offered the property to discharge GAL’s liabilities but failed to do so. The court directed the Official Liquidator to take possession of the property and comply with previous court orders. The case was listed for further proceedings on 17.08.2017.