TaxTMI 
TaxTMI 
2015 (12) TMI 524
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....reference case/appeal is finally disposed of by the 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 physica....
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.... is appointed to protect the assets of a company for the benefit 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 o....
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.... or for the enforcement of any security or of any guarantee in respect of any loans, or advances granted to 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 a....
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....ntuality being thrust upon all the concerned, but that ultimate eventuality is unavoidable as counsel of the company could not answer 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. ....
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.... containing the EMD and another for the offered amount. (ix) The said offers be invited in sealed cover and same will be opened in the open court on 23.6.2015. (x) Thereafter, the auction 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 b....
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.... and allied matters and submitted that the order dated 04.05.2015 passed by learned Company Judge was challenged before the Hon'ble Division Bench and by way of the aforesaid order, Hon'ble Division Bench dismissed the appeal filed by the present applicant. However, this Court permitted 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 co....
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....e company except when the business of the company is continued. He submitted that the present application is filed by Chief Financial Officer of the applicant. The said officer is not having any authority or power to file the present proceedings in view of the provision contained in Section 445(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....
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....th in value of the amount outstanding against financial assistance disbursed to the borrower of such secured creditors, have taken any measures to recover their secured debt under subsection (4) of section 13 of that Act.] (2) Without prejudice to the provisions of subsection (1), the Central Government or the Reserve Bank or a State 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 c....
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....present proceedings is that inquiry is pending before the BIFR and therefore as per Section 22 of the SICA, the Official Liquidator be restrained from taking over the possession of the assets of the company in liquidation in view of the communication dated 26.10.2015. Learned advocates appearing for the Official Liquidator as well as the concerned secured creditors are 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 ....