TaxTMI 
TaxTMI 
2015 (12) TMI 524
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....e authorities under the SICA." 3. Heard learned advocate Mr.S.S.Panesar with learned advocate Mr.A.S.Panesar for the applicant. Learned advocate Mr.J.S.Yadav for the respondentOfficial Liquidator. Learned advocates who were appearing in the company petitions on behalf of all the concerned creditors are also present before this Court when the matter was taken up for hearing. Applicant has not joined the petitioning creditors as party respondents in the present proceedings. 4. Learned advocate Mr.Panesar mainly submitted that the applicant company has filed reference under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1986 ('SICA' for short) before the Board for Industrial and Financial Reconstruction (hereinafter referred to as the "BIFR, New Delhi" for short). The said reference was filed on 06.10.2015. The same is duly registered as BIFR Case No.138 of 2015. It is contended that inquiry under Section 16 of the said Act is pending. Learned advocate pointed out that now the Official Liquidator has sent a communication dated 26.10.2015 to the applicant company and informed to take over the physical possession of the factory premises of the company o....
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.... of its creditors, secured and unsecured and others. It is not the function of the Official Liquidator to start the process of rehabilitation of the company as is aimed at under the Act. Despite appointment of the Official Liquidator, the Board of Directors continue to hold all residuary powers for the benefit of the company which includes the power to take steps for its rehabilitation. The Board of Directors in the instant case were not in any way by any judicial order debarred from taking recourse to the provisions of the Act for the purposes of rehabilitation of the company. If there existed a power, its exercise cannot be termed to be mala fide only because it was initiated after availing the opportunity to make the payment of the amounts due and passing of the order of winding up of the company. 11. It may also be noticed that winding up order passed under the Companies Act is not the culmination of the proceedings pending before the Company Judge but is in effect the commencement of the process. The ultimate order to be passed in such a petition is the dissolution of the company in terms of Section 481 of the Companies Act. The words "shall be deemed to commence" in Sectio....
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....the industrial company. But as is apparent, the immunity is not absolute. Such proceeding which a creditor may wish to institute, may be instituted or continued with the consent of the Board or the Appellate Authority. In the Section as originally enacted, the words "and no suit for the recovery of money or for the enforcement of any security ..............." were not there. These words appear to have been inserted to expressly provide, rather clarify that no suits for the recovery of money etc. would lie or be proceeded with against such a company. 53. Having answered the reference, we hold that the provisions of SICA, in particular Section 22, shall prevail over the provision for the recovery of debts in the RDDB Act. In these circumstances, as already directed by the twoJudge Bench of this Court, the Judgment and Order dated 23.02.06 of the High Court of Delhi is set aside. As far as the writ petitions are concerned, whether on the ground that Section 22 of the SICAs as a bar to the recovery proceedings under the RDDB Act or whether the protection of SICA is not available to the appellant company since the recovery proceedings under the RDDB Act had been concluded, the writ p....
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....r to the quarry of the Court that assuming for the sake of examining without holding that the Court is not precipitating the winding up proceedings as on date, then also, what are the steps will be taken by the company to fulfill its liabilities and obligation for deferring the action under Section 13(4) of the SARFAESI Act, to which, the learned counsel could not answer and submitted that in that eventuality he has no answer as Shri Desai was more emphatic in his submission in respect of company's invitation for powers under Section 13(4) of the SARFAESI Act. 11. The Court is also of the considered view that even independent of the submission canvassed on behalf of the bank, this Court is also more than convinced for passing the order as this eventuality may affect 500 personnels but company's consistent failure in raising the funds to fulfill its all secured creditors and discharging its liabilities since August, 2014, would rather make it incumbent upon this court to pass appropriate order of winding up, in the present proceedings. The company so far not come forward with any concrete offer, which could be said to be helpful in accepting the submission canvassed on be....
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....n will be taken in the open court and the parties will be at liberty to raise their offers at the time of auction. (xi) The bank is at liberty to open the bank Account in the name of O.L for Kemrock Industries and Experts Ltd. (company in liquidation) and maintain it as per Rules and keep all the money in said account. 13. The Court is also inclined to pass final winding up order by exercising the powers under Section 434 with following directions in case of Kemrock Agritech Private Limited in Company Petition No. 338 of 2013.: (i) The court is inclined to depute OL as full fledged provisional Official Liquidator and is directed to take possession of the company and complete the formalities on or before 6.5.2015. (ii) The possession be taken over and inventory be prepared and said inventory be signed company's representative, who are present in accordance with law. (iii) The OL is at liberty to depute the security agency, as agreed before this Court, at the site at their own cost. (iv) The Sale Committee be formed in accordance with law and said valuation report be received on or before 25.5.2015 and highest valuation be accepted for placing the upset price. ....
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....mitted the present applicant to deposit the amount in question latest by 30.09.2015 as per the submission made by learned advocate of the present applicant (the appellant before the Hon'ble Division Bench). The Hon'ble Division Bench also observed that the said amount is to be deposited by way of demand draft and thereafter the company can move the Court for revival of proceedings subject to objection of the respondents of the said appeals. Learned advocate Mr.Yadav has placed on record orders passed by the learned Company Judge as well as the Hon'ble Division Bench. 12. Learned advocate Mr.Yadav submitted that the Official Liquidator has earlier issued letter on 09.10.2015 for taking possession of the assets of the applicant company. However, at that time, workers of the applicant company filed an application which was subsequently withdrawn and therefore possession of the assets could not be taken on 16.10.2015. Now the Official Liquidator has once again issued letter on 26.10.2015 for taking over the possession of the assets of the applicant company. Now at this stage, the applicant company has filed this application. Thus, it appears that applicant is playing trick....
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....3) of Companies Act of 1956. 16. At this stage, this Court has inquired from the learned advocate Mr.Panesar, who is appearing for the applicant that whether the applicant is having any authority or power to file the present proceedings or not. On the basis of the instructions of the officer who is present in the Court, Mr.Panesar submitted that the Board of Directors gave the authority to Chief Financial Officer i.e. Mr.Sanjeev Jain on 15.05.2014 and therefore on the basis of the said authority given by the Board of Directors, present application is filed. 17. Learned advocate Mr.Singhi, at this stage, submitted that once the order of winding up is passed by this Court, the officer who has filed the present application, is not authorized to file the present proceedings and more particularly, in absence of any further resolution passed by the Board of Directors after 10.09.2015 (i.e. the date on which the Hon'ble Division Bench has passed the order) to file the present proceedings. 18. Learned advocate Mr.Singhi thereafter referred to the provision contained in Section 15(1) of the SICA and submitted that conditions laid down in the said section are not satisfied and therefo....
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.... Government or a public financial institution or a State level institution or a scheduled bank may, if it has sufficient reasons to believe that any industrial company has become, for the purposes of this Act, a sick industrial company, make a reference in respect of such company to the Board for determination of the measures which may be adopted with respect to such company: Provided that a reference shall not be made under this subsection in respect of any industrial company by (a) the Government of any State unless all or any other industrial undertakings belonging to such company are situated in such State; (b) a public financial institution or a State level institution or a scheduled bank unless it has, by reason of any financial assistance or obligation rendered by it, or undertaken by it with respect to, such company, an interest in such company. 20. Learned advocate Mr.Singhi thereafter submitted that as per Section 22(1) of SICA proceedings pending before the other Courts are suspended. However, for the said purpose, the stay from this Court is not required to be obtained by the applicant. However, in the present case, preconditions contained in Section 15(1) of ....
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....right in making their submissions that the creditors who are affected and in whose favour the order is passed by the learned Company Judge and Hon'ble Division Bench of this Court, they are not joined as party respondents in the present proceedings. No reference is made with regard to aforesaid orders and therefore this application is required to be dismissed only on this ground. However, I am also considering the other submissions taken by the learned advocates on merits. 25. Learned advocate Mr. Singhi is also right in making his submissions that as per Section 445 of the Companies Act, 1956 when the order of winding up passed by this Court, all the officers of the company in liquidation shall be deemed to be discharged except when the business of the company continued. It is an admitted fact that the Chief Financial Officer, who has verified the present application has not produced the authority given by the Board of Directors for filing the present proceedings, when inquired it is stated that the Board of Directors had given the authority to Mr.Sanjeev Jain, Chief Financial Officer to file the proceedings before this Court and to file the affidavits in May, 2014. However, ....