TaxTMI 
TaxTMI 
2008 (5) TMI 432
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....ies (Special Provisions) Act, 1985. Thereafter, the board opined for winding up of the company and the Company Petition No. 256 of 2000 came to be filed with this court. The petitioner-company preferred the appeal before the appellate authority and the said authority has dismissed the appeal. Thereafter, the petitioner preferred the special civil application challenging the validity of the orders passed by the BIFR and the AAIFR but the said petition came to be dismissed. The petitioner preferred the Letters Patent appeal against the order passed in special civil application which also came to be dismissed. 3. The petitioner is the company which was facing financial problems and has started doing the business and regularly paying the current dues statutory and contractual. The petitioner had deposited the substantial amount of Rs. 50 lakhs with the registry of this court, pursuant to the order dated October 4, 2005, passed in Company Petition No. 256 of 2000 and shown its bona fide. The petitioner did file a detailed affidavit in the Company Petition No. 256 of 2000 stating therein that, the secured creditors have agreed for one-time settlement for the amount of Rs. 200 lakhs as f....
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....ing the petitioner and as the company is situated in the remote place, the said company if given an opportunity then the workers and employees would not be deprived of their livelihood. It is further submitted that the sundry creditors/suppliers have full trust in the management of the petitioner-company and are also ready to supply the raw materials to the petitioner-company. 4. By an order made in the Company Application No. 39 of 2006 on February 20, 2006, the petitioner was directed to convene a meeting of the shareholders, secured creditors and unsecured creditors for the purpose of considering and, if thought fit, approving with or without modifications, the compromise/arrangement proposed to be made between the petitioner-company and its shareholders, secured creditors and unsecured creditors to the proposed scheme and the said order directed the Registrar General of the High Court to appoint one person not below the rank of the Assistant Registrar to convene, hold and conduct separate meeting and to report to the court within four weeks from the date of passing of the order. Thereafter, the petitioner preferred Company Application No. 128 of 2006 for extension of time to c....
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....pany should obtain suitable direction for holding a fresh meeting of the secured creditors, which suggestion was acceptable to all persons present. Thereafter, the petitioner-company has preferred separate Company Application No. 290 of 2006 in Company Application No. 39 of 2006 in Company Petition No. 256 of 2000 for convening a fresh meeting of secured creditors. This court vide its order dated June 16, 2006, considered the submission and ordered for fresh meeting of the secured creditors to be convened on July 22, 2006. Notice of the said meeting was sent by U. P. C. and hand delivery as per order dated June 16, 2006, to the secured creditors together with the copy of the scheme of arrangement in the nature of compromise and of the statement required under section 393 and the form of proxy. The publication of the notice of the meeting was dispensed with. On July 22, 2006, a meeting of the secured creditors of the company was duly convened in accordance with the said order. The chairman of the meeting has reported the result of the said meeting vide his report dated June 18, 2006. As per the chairman's report, the said meeting of the secured creditors was attended by three secure....
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....gistered in the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 and the said Board opined for winding up of the company in Company Petition No. 256 of 2000 in public interest. (iv)There is no concrete revival scheme before this court from the board of directors of the company. 8. A further affidavit is filed by Kanubhai Chaturbhai Patel, authorised representative of the petitioner-company stating therein that IFCI one of the secured creditors who has opposed the scheme in the meeting of the secured creditors, subsequently vide its letter dated September 20, 2007, has withdrawn the objections to the scheme and supported and approved the sanctioning of the scheme. 9. An affidavit is filed by the manager of Kotak Mahindra Bank Ltd., raising objections against the scheme and stating therein that ICICI Bank Ltd., had filed the Original Application No. 229 of 2003 in DRT-III, Mumbai, claiming huge amount from the petitioner-company. The amounts claimed are more than Rs. 7.50 crores as on May 31, 2003, along with the interest thereon. Pursuant to the assignment of debts by ICICI Bank Ltd., in favour of the objector bank, the objector bank has been permitted to b....
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....not have support of the secured creditors holding debt more than the statutory majority as provided in section 391(1) of the Act. 12. Pursuant to the additional affidavit dated March 4, 2008, filed by Kotak Mahindra Bank Ltd., the petitioner-company has filed counter affidavit dated March 10, 2008. It is stated in this affidavit that in spite of objections being raised, Kotak Mahindra Bank Ltd., has still not produced a true and full copy of the deed of assignment on the basis of which it has assigned its debt to Kotak Mahindra Bank Ltd. The petitioner-company has challenged before the Appellate Tribunal the order of the Debts Recovery Tribunal whereby Kotak Mahindra Bank has been permitted to be on record in place of the ICICI Bank Ltd. The said appeal is still pending. Since Kotak Mahindra Bank Ltd., is not producing true and full copy of the alleged deed of assignment, the petitioner made private inquiries and it has been reliably learnt that the alleged deed of assignment on which Kotak Mahindra Bank relies on is a compromise document by which for a stamp fee of Rs. 1 lakh claims of the ICICI Bank Ltd., against 114 parties are sought to be assigned to the Kotak Mahindra Bank L....
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....% Kotak Mahindra Bank Ltd. 148 -do- 27.0% Dena Bank 187 Only Rs. 22.94 lakhs is secured by a charge on the fixed assets. Balance amount is unsecured and/or secured only to current assets. 34.0% 547 100% 15. Percentage of debt in favour of the Dena Bank include the debt secured only on current assets and not on the fixed assets. 16. It is further submitted that in the same meeting it was proposed that by way of one-time settlement the outstanding amount shall be distributed amongst the secured creditors having first charge. The proposal was as under : o/s Sharing based on principal Sharing based on first charge % sharing IDBI Ltd. 149.41 (38.97%) 55.37 77.97 38.98 IFCI 63.00 (16.39%) 22.60 32.86 16.43 Kotak Mahindra Bank Ltd. (ICICI a/c.) 148.00 (38.40%) 51.41 77.22 38.61 Dena Bank 22.94 (5.93%) 70.62 11.96 5.98 383.35 200 200 100 17. On the basis of these two charts, a submission was made that the percentage stake of the objector bank was to the extent of 38.40 per cent, and the proposal to settle the dues of the secured creditors was almost to the similar extent while keeping in view the one-time settlement a....
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....oposal and settlement. Neither IFCI Ltd., nor the Kotak Mahindra Bank Ltd., has been able to show that the scheme is unreasonable or is unfair or is contrary to the provisions of law or it violates any public policy. It is further submitted that the status of the Kotak Mahindra Bank Ltd., is not a creditor of the company till it is established beyond doubt that it is a creditor then the issue will be whether it is a secured creditor or unsecured creditor. If unsecured creditor, it would be paid as per the settlement offered to unsecured creditor. In view of this fact, objections raised by the Kotak Mahindra Bank Ltd., deserve to be rejected. 20. In the light of the above facts and circumstances of the case and pleadings of the parties, learned advocates appearing for the respective parties have been heard at length and their submissions were considered. Mr. Ashok L. Shah, learned advocate appearing with Mr. Pavan S. Godiawala for the petitioner- company has pointed out the salient features of the scheme and how it is beneficial to all. He has also relied on several decisions in support of the sub mission that the objections raised by the Kotak Mahindra Bank Ltd., are liable to be ....