BHUPENDRA KUMAR MULCHAND BOHRA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) The petition for the winding up of the company, the Mysore Electro Chemical Works Ltd, hereinafter referred as the company, was filed by one of its creditors, in Coy Petn.5/71. The ground on which winding up of the company was sought was that the company was not able to pay its debts. The said petition was admitted by this Court on the 16th of April, 1971. The Directors of the company requested the Court not to pass an order of winding up immediately, so that they could have some time to settle the claims of the creditors. As they were not able to effect any settlement, it became necessary to pass an order of winding up of the company.

(2.) This Court, therefore, by its order d/.11th of Feb, 1972 directed the company to be wound up. The Official Liquidator was asked to take charge of the factory belonging to the company. Accordingly he assumed charge of the assets of the company and submitted his report. After the report of the Official Liquidator was received the Court appointed an Auditor and two Engineers to make a report to the Court regarding the affairs of the company and the market value of the assets belonging to the company. M/s B.K.Ramadyani & Co, Chartered Accountants, who were asked to look into the accounts of the company and make a report, submitted the report on 14th of Sep, 1972. According to that report the share capital of the company consisted of 5,335 cumulative preference shares of the face value of Rs.100 each; 68,658 'A' class equity shares of Rs.10 each (reduced to Rs.5 each) as per order of this Court passed on 23-11-62) and 2,59081 shares of Rs.10 each. In all the total issued share capital of the company was Rs.34,72,600. According to the Auditors, a sum of Rs.92,56,948 was due by the company to the secured creditors. A sum of Rs. 19,17,983- 9lp. was due to Govt by way of taxes, etc, a sum of Rs.6,34,599-39p. was due to the employees (inclusive of the contribution payable under the Provident Funds Act and the Employees' State Insurance Act), a sum of, Rs.10,37,604-04p. was due to the foreign collaborators, a sum of Rs.77,515- 98p, was due as unsecured loans and a sum of Rs.45,87,527-61p. was due to other unsecured creditors. In all a sum of Rs.1,75,12,178-93p. was due and payable by the company according to the accounts that had been kept by the company. Sri S.G.Ramachandra, Chief Engineer of Kirloskar Electric Coy Ltd., who was requested to make a report regarding the market value of plant and machinery belonging to the company reported to the Court that they were worth Rs.31,42,000. Sri B.Vittala Murthy, retired Chief Engineer, Govt of Mysore, who was requested to make a report to the Court-regarding the market value of the building and land belonging to the company, reported that they were worth Rs.15,69,690. The position that emerged from the three reports, namely, the reports of the Auditor and of the two valuers, was that the total assess of the company were insufficient even to meet the claims of all the secured creditors.

(3.) The Official Liquidator, however, reported, that the factory of the company was in sound working condition and was capable of being restarted. At that stage I made an order authorising the Official Liquidator to find cut whether it was possible to lease out the factory in favour of any person who was interested in running the factory. In the meanwhile, I directed notices to be issued to the State, Govt and also to the Central Govt to find out whether either of them was interested, in taking over the company and running it. The State Govt was not interested in doing so. The Central Govt, however, evinced some interest at the commencement. They deputed their officials to make an investigation into the affairs of the company under S.15A of the Industries (Developmemt and Regulation)Act, 1951. On receipt of the report of the officials so deputed, the Central Govt reported to this Court that it was not interested, in taking over the management of the company.