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2022 (8) TMI 374
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....CO/5/2021, ACO/6/2021, ACO/7/2022, ACO/8/2022, ACO/9/2022 THE BARANAGORE JUTE FACTORY PLC (IN LIQN). AND NAMOKAR VINIMAY PVT. LTD. -VS- OFFICIAL LIQUIDATOR AND ANR. APOT/74/2021 IN CP/2/1987 IA NO: ACO/2/2021, ACO/3/2021, ACO/4/2021, ACO/5/2021, ACO/6/2021, ACO/7/2021, ACO/8/2021, ACO/9/2021, ACO/10/2021, ACO/11/2022, ACO/13/2022, ACO/14/2022, ACO/15/2022 IN CP/2/1987 APOT/80/2021 IN CP/2/1987 Present: Mr. Abhrajit Mitra, Sr. Advocate Mr. Sarvapriya Mukherjee, Advocate Mr. Yashovardhan Kochar, Advocate Mr. Anirudha Agarwalla, Advocate ... for Baranagore Jute Factory, PLC (appellant in APO/48/2020) Mr. K. Thaker, Advocate Mr. Jaydeb Ghorai, Advocate Mr. Suman Chatterjee, Advocate Mr. Diptesh Ghorai, Advocate ... for appellant in APO 195/2019 Mr. Anirban Ray, Advocate, Mr. Soumabha Ghose, Advocate, Mr. Prasanta Naskar, Advocate. Mr. Yash Singhi, Advocate ... for Namokar Vinimay Pvt. Ltd. (appellant in APO 143 of 2020) Mr. Jishnu Chowdhury, Advocate Mr. Balaji Chakraborty, Advocate ... for Baranagore Jute Mills Employees' Union (INTUC) (applicant in ACO/15/2022 in APOT/74/2021 and (appellant in APOT/74/2021 Mr. Surajit Nath Mitra, Sr. Advocate Mr. Sankarsan Sar....
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....tricted hearing due to COVID-19 the matter could not be heard at that time and has been heard finally after commencement of physical hearing. Arguments at length have been advanced by learned counsel for the parties. 3. This case has a chequered history, therefore, before entering into the merits of the matter it would be appropriate to ascertain the present status of the company petition. 4. The initial fact of incorporation of Baranagore Jute Factory PLC is noted in the judgment dated 11th November, 2009 of the Hon'ble Supreme Court of Judicature, Court of Appeal (Civil Division) in appeal from the High Court of Chancery Division in Appeal No. A3/2009/0423 in the matter of Chaitan Chowdhury and Others vs. Damodar Prasad Bhattar and Others reported in 2010 (2) All ER 103 as under: "2. The Company was incorporated in England on 22 July 1872 under the Companies Act 1862 for the purpose of carrying on the business of jute manufacturers at Barnagore, near Calcutta, in what is now the Republic of India. That remains the sole business of the Company. It is common ground that the Company has, now, no connection with England; save that it was incorporated here, maintains it....
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....mmittee of management of the Jute Mill of Barnagore Jute Factory constituted of the persons mentioned in the scheme for revival as annexed to the petition being Annexure 'B' is directed to take steps for reopening of the Jute Mill and to run the same in terms of the scheme as attached to the petition being Annexure 'B'. It is made clear that such management by Ad-hoc Court Committee making by way of interim arrangement for the benefit of all concern the applications are not being decided on its merit. This order without prejudice to the rights and contentions of the Parties. Official Liquidator will forthwith take possession and remain in possession of the Company and will complete the inventory which is yet to be completed as also of the finished goods and will take the assistance of the valuer from the panel on valuers of the High Court and the cost of the Jute Mill to paid by Mr. Mitra's client in the first instance." 9. The order of the learned Company Judge dated 15th September, 1988 was the subject matter of challenge in the Company Appeal wherein the Hon'ble Division Bench by order dated 22nd September, 1988 had stayed the winding up proceedings for six months for the tim....
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....y in liquidation nor any steps have been taken to sell any of the assets of the company in liquidation. 13. Learned Single Judge has taken note of the sequence of events and various orders from 1987 till 2004 by quoting from the judgment In Re: Radheshyam Ajitsaria reported in 2006 (11) SCC 771 as under: "BACKGROUND FACTS: 4. Baranagore Jute Mills PLC (for short `the Company') was under the management of Jardine Henderson Limited. On the failure of the jute factory to pay dues of several of its creditors, various winding-up petitions were filed in the High Court under the provisions of the Companies Act, 1956. By an order dated 28.10.1987, the Company Judge directed winding- up of the Company. The Court appointed the Official Liquidator with a direction to take possession of the assets of the said Company. An application was made by one - Shri Raj Kumar Nemani praying for stay of the winding-up proceedings of the Company and for revival of the Company as per a Scheme submitted and for appointment of an ad hoc Committee of Management to run the affairs of the said Company. The six Unions agreed to the Scheme as it was to the benefit of the workers. The learn....
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....neration of the Special Officer is filed at Rs.5,500/- and to be paid out of the assets of the Company. The orders of the learned Single Judge and the Division Bench are modified to the aforesaid extent. 4. The appeal is disposed of accordingly. No order as to costs." 7. The learned Company Judge approved the Scheme on 16.6.1989. The Scheme, inter alia, provides for payment to all unsecured creditors, workers, secured creditors, statutory dues etc. On 02.05.1990, appellant No. 1 resigned from the Management of the Company. 8. The learned Company Judge, while considering several applications made by unsecured creditors complaining that they were not paid by the Committee of Management, made an order dated 16.12.1991 cancelling the Scheme, observing that the Scheme had totally failed. 9. On an appeal preferred by the Committee of Management against the order dated 16.12.1991, the Division Bench of the High Court made an interim order dated 18.12.1981, reiterated on 24.3.1992 directing payment of 1% of the respective claims to all creditors on or before 7.1.1992. The Bench also stayed the order passed by the learned Company Judge dated 16.12.1991 or....
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....unsecured creditors should proceed at the rate of 2% p.m. from 1st March 1993 and not at 1%. The difference for the past on that calculation shall be made good within three months from today. If there is failure to do so, it will be appropriate for the Division Bench to put that circumstance also into scale in deciding whether the order of the learned single Judge setting aside the scheme should be interfered with in appeal or not.." 6. However, the order of the Division Bench staying the operation of the order dated 16th December 1991 of the learned single Judge will continue unless the Division Bench itself considers it appropriate to modify the same in the light of any subsequent event. The Division Bench shall also be at liberty to consider any applications for the modification of the scheme. 7. With these observations and directions the special leave petition is disposed of." 10. By subsequent orders, this Court directed the Committee of Management to deposit Rs. 40 lacs in two instalments which was to be deposited in the Registry of this Court. The said amount was kept in term deposits. On 11.03.1994, this Court set aside the order of the Division B....
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....lternative mechanism. The amount of Rs.40 lacs in deposit in this Registry shall be transferred to the account of the Registrar (Original Side), High Court of Calcutta, together with accrued interest immediately after the present deposits mature. 5. A grievance was aired by the petitioners that the Committee of Management is appropriating to itself the funds of the Company towards its alleged claims as unsecured creditor. Sri Santosh Hegde says this is impermissible. It is open to the petitioners to move the Company Judge in this regard. The contention of the Committee of Management on this point is also left open. 6. The interlocutory applications are disposed of accordingly." 11. On 13.12.1994, the learned Company Judge appointed a new Committee of Management composed of the Jain-Jalan group, while issuing necessary directions for deposit of Rs. 64 lacs by the Jain-Jalan group with the Registrar of the High Court. The Company Judge also directed certain lump sum payments to six substantial creditors, except Nemani Group on the basis of the list approved in the Court's Scheme prior to cut- off dates in October, 1987 before issuing advertisement invit....
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.... a further direction not to treat the appellants as part of the Nemani group with a further prayer for immediate payment in terms of the sanctioned Scheme. On 08.03.2001, the learned Company Judge directed payments to be made to the appellants, inter alia, holding that the appellants were not the part of the Nemani group and that their claims were already adjudicated upon and settled by the Registrar, Original Side. 14. One Shri Chetan Chowdhury claiming himself to be one of the Directors of the Company filed an appeal against the order dated 08.03.2001. The Division Bench, while granting liberty to the appellants to withdraw the amount deposited against its name/claim by furnishing a Bank Guarantee also recorded that it is not clear as to why Chetan Chowdhury and his group could be in the possession of the Company and listed the appeal for further directions. 15. On 14.05.2001, the appellants - Ajitsaria's group received payments from the Registrar of the High Court upon furnishing the requisite Bank Guarantee. Learned single Judge of the High Court passed an order on 19.12.2002, inter alia, holding that the possession of the Company by the alleged Board of D....
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.... and Others reported in (2006) 11 SCC 771. The Hon'ble Supreme Court had examined the matter in details and had reached to certain conclusions which are as under: "39. The above facts clearly go to show and administer that the workers do not have a right to oppose the payment to all unsecured creditors out of the funds lying with the Registrar, Original Side, High Court. The reasons for our conclusion are as under: (a) By order of this Court the said funds are meant for disbursement only for unsecured creditors. Separate arrangements have been made under the scheme for payment of other dues including workers' dues. The said scheme sanctioned in 1989 is still in operation and the present Committee of Management is operating under the same scheme. (b) Since 1994 i.e. after the petitioner Group was superseded by the Jain-Jalan Group, no demands of any nature relating to any outstanding payments were ever raised by the workers. (c) In any event, it has been clearly recorded in the order dated 18-11- 2004 whereby the said Chetan Choudhary Group has been allowed to continue in management, that the said Chetan Choudhary Group is being allowed to ....
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.... or inability on the part of the Company to make payments either in terms of the scheme or otherwise. The contention to the contrary raised by Mr Nariman has no force." 16. In the above paragraph, again it was reiterated that the company was functioning as a going concern. Though in this paragraph, it is observed by the Hon'ble Supreme Court that the winding up proceedings were permanently stayed under Section 466 of the Companies Act, 1956 but learned Counsel for the appellant has fairly stated that there is no order of the Company Court or the Hon'ble Division Bench staying the winding up proceedings permanently. 17. In the above judgment, Hon'ble Supreme Court had again reiterated that: 49. In our view, the provisions as contained under Section 529-A of the Companies Act, 1956 are not applicable in the facts and circumstances of the case as the order of winding up has been stayed and the Company is being run under the scheme as a going concern. "50. One Committee of Management is being replaced by another Committee of Management on the same terms and conditions with an object to implement the same scheme. Thus the dues of the creditors including the worke....
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.... to the interest of the workers and the industry as a whole but would not be pragmatic and would be contrary to long-settled practice in the company jurisdiction." 19. Thus, as per the above judgment of the Hon'ble Supreme Court, company was a going concern. 20. In the meanwhile, the proceedings before the BIFR were also initiated as the BJF had filed a reference with the BIFR under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 vide Form 'A' dated 16th of September, 2004. The BIFR on 7th of June, 2006 had recorded a finding that the company had become a sick industrial company as on March, 2003 and accordingly, declared it to be so and the BIFR appointed IDBI as the Operating Agency with the direction to prepare a revival scheme for it, if feasible. The IDBI had submitted the revival scheme by letter dated 30th of June, 2008 and the BIFR had prepared a Draft Rehabilitation Scheme (DRS) for revival of the company which was circulated vide order dated 2nd of December, 2008 and this scheme was sanctioned by the BIFR with some modification on 4th of November, 2009. It is worth noting that Section 22 of SICA, 1985 relating to suspension of legal pro....
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....ogly and in the year 2003, provisional compensation was assessed at Rs. 21,28,21,000/- and on deposit of the said amount, possession of the land was taken over. It was further found that the award was passed on 30th January, 2006 and on account of further dispute between the parties, the matter was referred to the sole arbitrator who had passed the final award on 13th September, 2012 by awarding an additional compensation package of Rs. 57,00,00,000/- along with interest which on computation would amount to Rs. 50,00,00,000/-. On 09th November, 2012, a sum of Rs. 95,00,00,000/- was deposited by the National Highway Authority of India with the Registrar of the High Court at Calcutta. Thus, it was found that the respondent company had received or was entitled to receive a total sum of Rs. 170 crores on account of compensation for acquisition of land. It was further found that on the basis of the precise details of its liabilities even after meeting of its statutory and contractual applications, the company would be left with surplus of nearly Rs. 50,00,00,000/- and would not be a sick company anymore. The observations of the Hon'ble Supreme Court in the matter of Yash Deep Trexim (P)....
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....e left with a surplus of nearly Rs 50 crores and, therefore, would not be a "sick company" any more." 24. In the aforesaid background, the Hon'ble Supreme Court in Yash Deep Trexim (P) Ltd. (supra) reached to the conclusion that the company is no longer a sick company and held as under: "19. In the present case the entitlement of the respondent Company to receive a total amount of Rs 170 crores (approximately) by way of acquisition compensation and the payment of Rs 95 crores by NHAI which is presently lying in deposit with the Registrar of the Calcutta High Court is not in dispute. That the respondent Company would be left with a surplus of about Rs 50 crores after meeting all its losses and liabilities is a common ground amongst all the contesting parties. The rehabilitation scheme framed by the Board by its order dated 4-10-1999 is yet to be implemented. In the aforesaid situation keeping in view the object and scheme of the Act and the virtual consensus of the contesting parties with regard to the present financial health of the respondent Company it is clear that the Company can no longer fall within the ambit of the expression "sick industrial company" as defined ....
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....bove is a mere working arrangement that we have considered appropriate for the present and the same should not be understood as any expression of opinion by us on the entitlement of any particular group of shareholders to run and manage the affairs of the Company which issue is left open." 26. Before the Company Court, several applications were filed and learned Company Judge in the order dated 28th of April, 2014 observed that by virtue of the winding up order, the proceedings have acquired representative character. This order was subject matter of challenge before the Hon'ble Division Bench in ACO 38 of 2016 and connected matters. The Hon'ble Division Bench while passing the order dated 14.08.2014 had expressed doubt about permanent stay and observed as under: "Such contentions of Mr. Sengupta, was refuted by the learned Counsels appearing for different groups of interveners, i.e, the shareholder, the workers union and the unsecured creditors, as according to them the issue as to whether the winding up proceeding has been permanently stayed or not is still an alive issue which is required to be resolved by the Company Court. Contradictory stand, taken by the parties a....
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.... in liquidation as already winding up order was passed by this Court and the fuller effect of that order was yet to be examined. The parties accepted the said order. However, we feel that there is a grey area on the issue as to whether the winding up proceeding against the said company has been permanently stayed or not and we feel that some further research is yet to be made to resolve the said dispute. Such research is necessary to ascertain the right of the appellant to manage the affairs of the said company as the Directors of the company inasmuch as the management of the company cannot be controlled by the Board of Directors of the company when the company is in liquidation. Thus we hold that the appellants' right to withdraw the deposited money depends upon the fate of such research. However, such research cannot be completed without affidavits being exchanged between the parties. We do not want to do the exercise as the Company Court has not yet decided these applications finally, and if we do this exercise at this stage, the aggrieved party will lose a forum of appeal for challenging our order on this issue. Considering the amount of deposit which the appellants wa....
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.... (i) No terms and conditions were fixed In Re: Ajitsaria excepting that the Company/BJF was treated as a going concern for which reason the workers were denied access to Section 529A of the 1956 Act. (ii) It cannot be said that the Company was intended not to function under the supervision of Court. (iii) Literally and classically following the letter and spirit of the law apropo the present factual matrix, it is the Court, through successive appointment of Committees of Management (CoMs), Joint Special Officers, the Official Liquidator and the like has transformed the Company/BJF into an entity custodia legis. (iv) The Company/BJF continues to be monitored by the Court at various stages through its CoMs, Joint Special Officers, the Official Liquidator. (v) The sudden infusion of the compensation money by NHAI has turned the balance-sheet of the Company from red to black. The Company's performance per se has not been credited with the paper turn-around, although the Company continues to claim the status of a going concern which will be left with a cash surplus after pending debts/obligations are met from out of the funds pumped in by NHAI. ....
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....inst the order of the Company Judge it is required to be decided in the light of the well-settled principles relating to scope of interference by the appellate Court. If the view taken by the Company Judge is a possible view then no interference in the order of learned Single Judge is required merely because another view is possible. In similar circumstances in the matter of Forbes & Company Ltd. and Ors. Vs. The Official Liquidator of the Hon'ble Bombay High Court and Ors., 2013 (7) ALLMR 388, in a case where the Company Judge had dismissed an application for permanent stay, while considering appeal, the Division Bench of the Bombay High Court had held that: "16. Now it is in this background that the court would have to consider whether the exercise of the discretionary jurisdiction of the company court under Section 466 has to be interfered with in appeal. At the outset, it must be noted that this Court in appeal is not called upon to determine in the first instance as to whether a case was made out for the exercise of the discretion under Section 466 but whether the judgment of the learned Single Judge would warrant interference in appeal, based on well settled principl....
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....winding up proceedings were permanently stayed under Section 466 of the Act. The fact that no order of permanent stay was passed by the Company Judge, was not brought to the notice of the Hon'ble Supreme Court. Subsequently, the Division Bench of this Court by order dated 14th of August, 2014 in ACO 38 of 2016 taking note of the judgment of the Hon'ble Supreme Court in the case of Radheshyam Ajitsaria & Anr. (supra) had expressed doubt about the said observation of the Hon'ble Supreme Court and had noted that there was a grey area on the issue as to whether the winding up proceedings of the company have been permanently stayed or not. This order of the Division Bench was the subject matter of challenge before the Hon'ble Supreme Court in SLP (C) No. 2814-2815 of 2015. Nothing has been pointed out to show that the above observation of the Division Bench of this Court was interfered with or set aside by the Hon'ble Supreme Court in the appeal. Hence, the issue relating to permanent stay is now required to be dealt with by this Court by examining the factual and legal position in this regard. 37. Section 466 of the Act deals with power of tribunal to stay winding up and provides as....
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....ad dismissed the application for permanent stay of the proceedings under Section 466 of the Act, Hon'ble Justice Dr. D. Y. Chandrachud (as he then was) taking note of the legal position on the issue and after considering Section 466 of the Act has held as under: "11. Sub-section 1 of Section 466 empowers the Company court to stay the proceedings in winding up either altogether or for a limited time on such terms and conditions as it thinks fit. Such an order can be passed on the application either of the Official Liquidator or of any creditor or contributory. The fundamental requirement of Section 466(1), is that the court may do so "on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed." Section 466(1) confers a discretion on the court and not a mandate. The discretion has to be exercised on satisfaction that stay of the proceedings in relation to winding up ought to be granted. The legislature has carefully used the expressions "on proof to the satisfaction" and "ought to be stayed". Before the court grants a stay, the statutory requirement is that there must be proof which is brought before the court on the basis....
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.... the winding-up order was made the assent of all the creditors and of a large majority of shareholders has been obtained. In a judgment of more recent origin in the UK, Mergarry, J. in Re Calgary and Edmonton Land Co.Ltd. (In Liquidation), held as follows : Under Section 256 itself the court may ... on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed" make an order for the stay "on such terms and conditions as the court thinks fit. Quite apart from any authority (and I may mention In re Telescriptor Syndicate Ltd. [1903] 2 Ch. 174) this language seems to me to make it abundantly clear that the jurisdiction is discretionary, and that it lies on those who seek a stay to make out a sufficient case for it. In particular, the words "satisfied," "just and beneficial," "satisfaction of the court" and "ought to be stayed" seem to me to indicate that the applicant for a stay must make out a case that carries conviction. (emphasis supplied) 13. In an early decision of the Calcutta High court in the matter of East India Cotton Mills Ltd., Justice S.R. Das (as the learned Judge then was adverted ....
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....lled nor revoked nor set aside. It continued to exist but was inoperative. In other words, despite the grant of the stay, order of winding up continues to exist but is rendered inoperative." 43. The Single Bench of this Court in the case of Mahabir Prasad Agarwalla and Ors. vs. Ashkaran Chattarsingh and Ors., 85 CWN 557 has summarized the principles for exercising the discretion under Section 466 as follows: "28. Therefore, from the above principles which has been summarised in different authorities and the decision referred to hereinbelow it appears that the discretion for stay under section 466 can only be exercised by the Court (1) if the Court is satisfied on the materials before it that the application is bonafide, (2) the Court would be guided by the principles and definitely come to the finding that the principles are applicable to the facts of a particular case, (3) mere consent of all the creditors for stay of winding up is not enough, (4) that offer to pay in full or make satisfactory provisions for the payment of the creditors in not enough, (5) court will consider the interest of commercial morality and n....
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....nce it is in a state of suspended animation. The fact that the Appellate Bench directed that pending the implementation of the scheme as sanctioned by the High Court, the winding-up order will be kept in abeyance itself without anything more shows that the order was neither cancelled nor recalled nor revoked nor set aside. It continued to exist but was inoperative. Any default on the part of the Company in carrying out its obligation under the scheme by itself without anything more would revive the winding-up order. Therefore, the winding-up order was effectively subsisting but inoperative for the time being. Having all the potentiality of being rejuvenated or being brought back to life. 15. Now if the winding-up order was merely held in abeyance i.e. it was not operative for the time being, but it had not ceased to exist, the winding-up proceedings are in fact pending and the court which made the winding-up order would be the court which is winding up the Company. It is now well-settled that a winding-up order once made can be revoked or recalled but till it is revoked or recalled it continues to subsist. That is the situation in this case. If the winding-up order is subs....
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....ish an advertisement in the prescribed form inviting creditors to prove their claim. f. In terms of Section 547 of the Act, all requisite documents pertaining to the company are required to contain the statement that the company is being wound up. g. Under Section 551 of the Act read with Rule 311 and Form 48, in case the winding up of a company is not concluded within one year after its announcement, the Official Liquidator is required to file the annual statement in the prescribed form. h. In terms of Rule 286, the Official Liquidator is required to maintain the prescribed registers and books of various natures. After the affairs of the company are completely wound up or other conditions prescribed are satisfied, the Official Liquidator is to file an application under Section 481 of the Act for dissolution. i. No steps have been taken by the Official Liquidator so far to sell any of the assets of the company. 49. It is not a case of any of the parties before us that any steps as mentioned above or as required under the Act or Rules after passing of the winding up order, for winding up of the company have been taken in the present case. Thus,....
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....ther expenses relating to the said company. 9. I state that there was no other activity in the office of the Official Liquidator relating to the said company as the winding up of the Company has been permanently stayed and the company was and is running as a going concern. The order of winding up of the High Court at Calcutta dated 19.12.2002 was ultimately stayed by the order Division Bench dated 18.11.04. The permanent stay of the winding up was also being observed by the Hon'ble Supreme Court in its order dated 24.05.2006. Accordingly, the Official Liquidator on 16th January, 2012, handed over the said Godown Space. Copies of the order dated 01.04.2011, 18.11.2004, 24.05.2006 and the said letter of handing over dated 16.01.2012 are annexed herewith marked as "B". 10. I state that there is no claim of any creditors in the books of the office of the Official Liquidator, a statement of accounts comprising of receipts and payments made on account of the company since winding up till date was prepared and a sum of Rs. 46,00,000/- being the balance in hand with this office on account of the company was also handed over to the said company by way of a cheque in favour....
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....ts members of any class of them. In such an event the Court may, on the application of the company or of any creditor or member of the company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs before approving the scheme. In this case it is neither the company nor the creditor nor any member of the company which has proposed either by Maxlife either with any of the creditors of the company whether secured or unsecured or the shareholders of the company. Maxlife is a total stranger to the company." 53. Since in this case scheme of revival has been framed and committee of management has been appointed to run the BJF, therefore, it has been submitted that stay is operating under Section 391 of the Act. Section 391 of the Act deals with power to compromise and make arrangements with creditors and members and provides for making arrangements with the creditors and members and empowers the Company Court to sanction arrangements. Sub-section 6 of Section 391 empowers the Company Co....
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....eholders and it is for that reason that a scheme is said to have statutory operation cannot be varied by the shareholders or the creditors unless such variation is sanctioned by the court. The effect, therefore, of a scheme between a company and its creditors is that so long as it is carried out by the company by regular payment in terms of the scheme a creditor who is bound by it cannot maintain a winding-up petition. But if the company commits a default, there is a debt presently due by the company and a petition for winding-up can be sustained at the instance of a creditor. The scheme, however, does not have the effect of creating a new debt; it simply makes the original debt payable in the manner and to the extent provided in the scheme. The proposition that a winding-up order can only be passed after compelling the company to complete the rights which are still incomplete is not borne out by the decisions relied on by Mr Sen." 54. Hon'ble Supreme Court in the matter of S.K. Gupta and Another vs. P. Jain and another, AIR 1979 SC 734 has reiterated that the scheme when sanctioned does not merely operates as an agreement between the parties but has statutory force and is bindi....
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....lso not taken any of the steps which are required to be taken by the Official Liquidator under the Companies Act, 1956 on passing the winding up order. No asset of the BJF has been sold in winding up proceedings till now though about 35 years have passed after the order of winding up. g. In the present case, as already noted above, the scheme of arrangement as formulated by the High Court and approved by the Hon'ble Supreme Court is operating and the company is functioning as a going concern. The Hon'ble Supreme Court on 30th of November, 1988 had opined that the scheme supported by the workers and unsecured creditors of Raj Kumar Nemani, be accepted and a detailed scheme on that basis be formulated and implemented as soon as possible and thereafter the Company Judge had approved the scheme on 16.6.1989 and the judgment of the Hon'ble Supreme Court in the case of Radheshyam Ajitsaria & Anr. (supra) indicates that the scheme, arrangement so formulated and approved has been implemented and the Company is running as a going concern. h. We also find that the company is a going concern and is no longer a sick company after receiving the compensation amount from NHAI as....
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....in the Committee of Management. Therefore, the order of the learned Company Judge in respect of constitution of three members Committee of Management is set aside and members of the Committee are discharged. 59. Hence, in view of the above analysis, we dispose of the appeal by modifying the direction of the learned Company Judge and directing as under: i. Hon'ble Justice Bhaskar Bhattacharya, former Chief Justice of Gujarat High Court is appointed as a one member Committee to get the accounts of the company audited through any reputed chartered accountant firm with the approval of the Company Judge and to take inventory of all the movable and immovable assets of the company in liquidation with the help of the Official Liquidator or any other competent authority and to invite the claims of creditors, workers etc. upto the cut-off date and to quantify the same with the help of the chartered accountant and Official Liquidator. ii. The above exercise will be completed and the audited reports, inventory of movable and immovable assets of the company as also the ascertained claims will be placed before the Company Judge by the above one member Committee within three ....