TaxTMI 
TaxTMI 
2013 (4) TMI 621
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....h ('U.P.'). Although the company started production in January 1979, it was unable to achieve a production capacity higher than 10 to 12 tonnes per day, which was lower than the break-even point of about 17 tonnes per day. SCL continuously incurred cash losses and suspended operations in March 1982. As on 30th June 1986 SCL had accumulated losses of Rs. 653 lakhs. Industrial Development Bank of India ('IDBI') was one of the secured lenders of SCL in whose favour there was a mortgage of title deeds as well as hypothecation of movable properties, plant and machinery of SCL. As SCL failed to repay the loans, IDBI filed a mortgage Suit No. 1323 of 1983 in the Bombay High Court. By an order dated 25th July 1983 the Bombay High Court appointed an ad interim Receiver of the properties of SCL. 3. At that stage Interads Advertising Private Limited filed Company Petition No. 5 of 1985 in this Court under Sections 433, 439 and 443 of the Companies Act, 1956 ('Act') against SCL seeking its compulsory winding up on the ground of its inability to pay its debts. By an ex-parte order dated 9th December 1986 SCL was wound up by this Court and the Official Liquidator ('OL') was appointed as a Liq....
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.... the Applicant Mr. Inder P. Choudhrie should also be associated as he would be aware of the facts. The prayer of the parties that there should be a moratorium for a period of six years for the payment of the additional liabilities was also approved. 8. The Scheme approved by the Court contained a clause titled 'Basic Assumptions'. One of these was that HLL would have no obligation to revive the paper plant and that "the existing utilities and building of the paper plant would be utilised, as far as possible, for the soap packing operation to reduce capital expenditure while ensuring the repayment of all debts (old and new) within the time period as agreed herein." The other basic assumptions read as under:- "(b) (i) HLL will pay conversion charges to SCL @ Rs. 1,000 per tonne of soap packed under Phase-I and Rs. 1,900 per tonne of soap manufactured and packed after implementation of Phase-II of the project. (ii) In addition, HLL will bear any statutory duty like sales tax, etc., if any, that might be attracted on this lease transactions during the lease tenure. (c) HLL would review the position periodically and increase conversion charges to an appropriate level in step....
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....e by HLL." 10. The specific clause concerning additional liabilities is Clause 6.4(a) which reads as under: "6.4 (a) The Scheme formulated by IRBI envisages a total of Rs. 530 lakhs as dues to financial institutions banks. In the balance sheet, prepared by the auditors this figure has been shown as Rs. 10,66,92,635. HLL assumes that the total liability of SCL towards the financial institutions/banks would be restricted to Rs. 530 lakhs as envisaged in the revival scheme. Similarly, current liabilities have been estimated in the revival scheme at Rs. 55 lakhs comprising of Rs. 33 lakhs for third parties and Rs. 22 lakhs for the promoters. The auditor's report estimates these liabilities and contingent liabilities at Rs. 5,47,29,03, primarily on account of significant potential liabilities (hereinafter referred to as additional liabilities) towards excise duty, sales tax, interest on sales tax, and freight and demurrage. The current liabilities and provisions would, therefore, need to be restricted to Rs. 55 lakhs. (b) A moratorium of six years will be granted in respect of these additional liabilities. These additional liabilities will be paid out of the purchase price of t....
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....as yet to comply with certain directions contained in the Scheme. If that be so, they would be at liberty to file an appropriate application in this behalf. With the aforesaid liberty, this application is disposed of." 12. Thereafter UPSIDC filed a Company Application No. 506 of 2005 praying that its earlier applications be taken up for hearing. By an order dated 28th April 2005 this Court rejected Company Application Nos. 392 and 392A of 1990 filed by UPSIDC after noting that UPSIDC did not file any appeal or petition against the judgment dated 15th February 1990. 13. In its order dated 2nd September 2009 this Court noted the statement of the Applicant in Company Application No. 714 of 2006 that prayers 13, 14 and 15 of the application were not being pressed. The remaining prayers in the application are for directions to HLL to comply with its obligations under the approved Scheme. Inter alia it is prayed that HLL should be permitted to make good the loss to SCL on account of short payment of processing charges amounting to Rs. 2,430 lakhs along with interest @ 18% per annum from the due date of payment till the actual date of payment. The other prayer is that HLL should be ....
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....of the IDBI at Mumbai, it was informed that Mr. Inder P. Choudhrie was not interested in running the unit and that he would like to retrieve his investment. Accordingly, a plan to complete the formalities of the handing over of the assets and documents to the majority shareholders, namely, IDBI was drawn up. It is stated that on 30th September 2004 HLL had completed all formalities in the presence of public financial institutions and promoters. HLL also made the full and final payment of an amount of Rs. 73,48,991 to IDBI towards the settlement of the term loans of the financial institutions and the bank. A due discharge was also issued by IDBI to HLL. Thereafter, Mr. Inder P. Choudhrie, the Applicant herein wrote to HLL raising certain allegations. HLL clarified its position by letter dated 31st October 2005 and also raised a counter claim of Rs. 81,22,072 as owing to HLL by SCL towards payment of salaries and wages of managers and supervisors who were on deputation to SCL for the period 1998 to 2002. It was further pointed out that all records including statutory records, records relating to income tax assessment, sales tax assessment etc. were handed over by HLL to IDBI on 30th ....
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....also paid Rs. 73,48,991 towards full and final payment under the rehabilitation Scheme. Annexure 'D' to the reply of HLL is a letter dated 30th September 2004 written by IDBI to HLL regarding handing over of the assets and acceptance of the aforementioned amount discharging HLL from any liability. In its affidavit as well as written submissions filed before this Court on 19th October 2012 IDBI reiterated that it had issued a 'no dues certificate' dated 14th February 2005 in favour of HLL. Subsequently, IDBI had also sold its entire equity holding in SCL to one Mr. Ramakant as acknowledged by Mr. Inder P. Choudhrie himself in his letter dated 16th February 2005 written by him to Mr. Gurdeep Singh, ex-Chairman of SCL. Consequently, the plea of the Applicant that HLL failed to discharge its liabilities in terms of the Scheme is without any basis. 19. It is next contended that HLL owes the Applicant arrears of conversion/processing charges to the tune of Rs. 24 crores. As pointed out in its reply HLL enhanced the conversion charges which were required to be paid only if Phase-II was implemented at the option of HLL. Consequently, this plea of the Applicant is without merit and is re....