TaxTMI 
TaxTMI 
2015 (3) TMI 506
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....anding. The Kamalapur did not adhere to the request. Dena Bank initiated a proceeding before the debt recovery Tribunal Lucknow and obtained certificate dated February 14, 2008 permitting Dena Bank to recover Rs. 17 crores approximately. Kamalapur preferred an appeal before the appellate authority. The appellate authority affirmed the decisions vide judgment and order dated December 15, 2008. In this backdrop, Dena Bank filed an application for winding up in 2009 before this Court inter-alia claiming, the Company was in involved circumstances and was unable to pay its debts hence, it should be wound up. The company opposed the application. They contended, being a secured creditor, Bank was not entitled to pray for winding up. Their remedy would lie in execution of the decree. His Lordship negated the contention and ultimately passed the order of winding up vide order dated July 30, 2010 appearing at pages-34-45 of the paper book. Kamlapur filed an appeal. The Division Bench upheld the judgment and order of the learned Single Judge vide judgment and order dated July 23, 2012 appearing at pages 50-71. Pertinent to note, the Division Bench heard the matter for five days on and from Ju....
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.... Roy Chowdhury learned Counsel appearing for the appellant placed the orders passed from time to time referred to above, and contended, the erstwhile management committed fraud on Court by making deliberate suppression, about the proceedings of the BIFR, before this Court. He would contend, once the High Court passed the order of winding up there was no scope for the BIFR to entertain the reference. Drawing our attention to the various provisions of SICA Mr. Roy Chowdhury would contend, the said Act was a Code by itself and on a combined reading of the various provisions it would never suggest, this could be applied at the post winding up stage. He would rely upon an age old decision of this Court in the case of Smith Stanistreet Pharmaceuticals Limited Vs. Nester Pharmaceuticals Limited reported in 1993 Volume-I Calcutta High Court Notes Page-368. He would pray for setting aside of the judgment and order of the learned Company Judge impugned herein. Appearing for the Official Liquidator, Ms. Ruma Sikder learned Counsel would inform the Court, Official Liquidator for the first time came to know of BIFR proceeding on September 20, 2013 when the management informed the Court about....
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....revival. Till then, there should not be any further step at the instance of the Official Liquidator in proceeding towards the liquidation. Mr. Abhrajit Mira learned senior Counsel also appearing for Manoj Saha would rely upon the following decisions: 1. M/s. Foremost Industries (India) Limited Vs. The A.A.I.F.R. & Others reported in 2000 Volume-IV Company Law Journal Page- 362. 2. Khurshid Alam Vs. P. Pagnon Company Private Limited and others reported in 2002 Company Law Board Page-523. 3. Tan India Limited Vs. Sundaram Finance Limited and another reported in 2002 Volume-108 Company Cases Page-591. 4. Modi Rubber Limited Vs. Madura Coats Limited and Another reported in 2006 Volume-130 Company Cases Page-32. 5. Tata Motors Limited Vs. Pharmaceutical Products of India Limited and another reported in 2008 Volume-VII Supreme Court Cases Page-619. He would also rely upon an unreported decision of the Delhi High Court in the case of Zenith Infotech Limited Vs. Union of India. He would contend, the decisions cited at the bar would clearly show, the subject Act would apply also at the post winding up stage and such application was considered to be in accordance with th....
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....he winding up of the proceedings should remain stayed till the conclusion of the proceedings before the BIFR. We are of the opinion that once the winding up order has been made by the Court in the proceeding for winding up of the company, the proceeding for winding up of the company comes to an end, and the other provisions in the Companies Act, 1956 relating to the company in liquidation will come into play and Official Liquidator after taking possession of the assets of the company in liquidation will discharge his functions as specified in various provisions on the Companies Act relating to the company in liquidation." 2. Rishabh Agro Industries Limited Vs. P.N.B. Capital Services Limited reported in 2000 Volume-V Supreme Court Cases Page-515: In the said case, the Company Court passed an order of winding up however, the Division Bench stayed the order of winding up. During the period when the company was enjoying stay Company approached the BIFR. The creditor contended, it was a misconceived attempt. Moreover, on the date of the passing of the order by the Division Bench, no proceeding was pending before BIFR. In this backdrop, the Apex Court held, the proceeding was main....
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....ould thus mean, "supposed", "considered", "construed", "thought", "taken to be" or "presumed"." 3. M/s. Foremost Industries (India) Limited Vs. The A.A.I.F.R. & Others reported in 2000 Volume-IV Company Law Journal Page-362: The Division Bench of the Delhi High Court, relying on Rishabh Agro, held post winding up BIFR proceeding maintainable. 4. Khurshid Alam Vs. P. Pagnon Company Private Limited and others reported in 2002 Volume-108 Company Cases Page- 523: Mr. Mitra relied on paragraph 1 and 2 of this Company Law Board decision. We do not find any relevance in the present context. 5. Tan India Limited Vs. Sundaram Finance Limited and another reported in 2002 Volume-108 Company Cases Page- 591: The Single Bench decision of the Madrass High Court held, when the company Court passed an order of winding up, the said order could not be set aside however, could be stayed during pendency of the reference before BIFR. Learned Single Judge relied upon the observation of the Apex Court made in Rishabh Agro (supra). 6. Modi Rubber Limited Vs. Madura Coats Limited and Another reported in 2006 Volume-130 Company Cases Page-32: Division Bench of the Allahabad High Court also....
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....rom paragraph 1 and 2 where facts were briefly stated. The decisions in the case of Smith Stanistreet (supra) being a former precedent would speak otherwise; however, the factual scenario in the said case could also be clearly distinguished from the present one. Hence, we have to rely on the provisions of SICA to get a clear vision. We fully agree with Tata Motors (supra) where Apex Court observed, SICA would have an overriding effect on Companies Act. However, the concept of overriding effect would only come when there would be a conflict in law. We should read these two statutes harmoniously to find out whether the present scenario would have application of such observation. Under the law of winding up the Company Court was the supreme authority to exercise its discretion as to whether the company would be wound up or not. Such exercise might be at the instance of the creditors or at the instance of shareholders or contributory. In a given situation it could also be at the instance of the Central Government. SICA would prevail upon a totally different field i.e. rehabilitation/revival. If we read the provisions, we would find, a complete procedure was laid down, commencing from S....
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....vil Court has already been approached or is likely to be approached by the aggrieved party. A creditor whose debt is unpaid is ordinarily entitled to seek winding up upon compliance of the provisions of Section 434 of the Companies Act 1956 that would ultimately culminate into an order of winding up blocking the chance of revival. Hence, such winding up process would come within the mischief of Section 22 and following Tata Motors. SICA would have overriding effect and winding up petition would be liable to be stayed till BIFR or AAIFR is in seisin or a scheme framed by the said authorities is in operation. The aggrieved party is not remediless. They are free to appear before BIFR and/or AAIFR for protection of their interest ventilating their grievance which they could otherwise do before a civil Court or a company Court as the case may be. This is well-settled principle of law that would deserve no relook. The decisions cited at the bar consistently upheld such principle of law. The present case would however, stand on a complete different footing. In the instant case, admittedly the order of winding up was passed on a date when there was no reference pending. Pertinent to not....