EHG ELEKTROHOLDING GMBH Vs. NGEF LIMITED

JUDGEMENT

(1.) THESE THREE ORIGINAL SIDE APPEALS ARISE OUT OF THE ORDER PASSED BY THE learned COMPANY JUDGE ON 8-10-2003 IN COMPANY APPLICATION NO. 771 of 2003 IN COMPANY PETITION NO. 154 OF 2002.

(2.) THE RELEVANT FACTS AS STATED ARE: new GOVERNMENT ELECTRIC FACTORY LIMITED ('ngef' FOR SHORT), A government COMPANY, CALLED FOR TENDERS. THE TENDERS WERE CALLED FOR under ADVERTISEMENT DATED 15 9-2001, PROPOSING TO SELL ITS SURPLUS assets WHICH INCLUDED VARIOUS PIECES OF LAND, IN TWO PARTS. THE DISPUTE pertains TO 5th ITEM OF PART II, VIZ. , 40 ACRES AND 18 GUNTAS OF FREEHOLD land, OFF MADRAS ROAD, NEAR BYAPPANAHALLI, RAILWAY MARSHALLING YARD, bangalore (6 KM FROM M. G. ROAD, BANGALORE ). IN PURSUANCE OF THE global TENDERS CALLED FOR, NUMBER OF APPLICANTS SUBMITTED THE TENDER IN respect OF 40. 45 ACRES OF LAND AND M/s. CHANDRA DEVELOPERS PRIVATE limited, SUBMITTED ITS TENDER OFFERING RS. 125 PER SQ. FT. AFTER negotiation AND DEEMED COMPLETION OF THE TENDER FORMALITIES, THE SAID applicant AGREED TO PAY THE PRICE OF RS. 278 PER SQ. FT. , AND GAVE acceptance LETTER DATED 11-2-2002. THE BOARD APPROVED THE SAME AS PER the DECISION OF THE BOARD MEETING HELD ON 25-2-2002. SANCTION OF rehabilitation SCHEME WAS ORDERED ON 26-7-1996 IN CASE NO. 602 OF 1994. SINCE THE COMPANY-NGEF WAS IN FINANCIAL DIFFICULTIES AND WAS UNABLE TO pay THE DEBTS OF ITS CREDITORS, PROCEEDINGS WERE INITIATED BEFORE THE board FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (FOR SHORT, 'bifr' ). THE BIFR BY A DETAILED ORDER HAS HELD THAT THE NGEF IS NOT LIKELY TO make ITS NET WORTH EXCEED ITS ACCUMULATED LOSSES WITHIN A REASONABLE time WHILE MEETING ALL ITS FINANCIAL OBLIGATIONS AND THAT THE COMPANY AS a RESULT THEREOF IS NOT LIKELY TO BECOME VIABLE IN FUTURE AND HENCE IT IS just, EQUITABLE AND IN PUBLIC INTEREST THAT IT SHOULD BE WOUND UP UNDER section 20 (1) OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 (FOR SHORT, THE 'sic ACT') AND THE OPINION WAS FORWARDED TO THIS court ALONG WITH COPIES OF ALL EARLIER ORDERS/proceedings, FOR NECESSARY action IN ACCORDANCE WITH LAW VIDE ORDER DATED 2-8-2002. THEREFORE, THE company PETITION NO. 154 OF 2002 CAME TO BE REGISTERED. IN THE SAID PETITION, COMPANY APPLICATION NO. 771 OF 2003 WAS FILED by M/s. CHANDRA DEVELOPERS PRIVATE LIMITED, UNDER RULES 6 AND 7 OF THE companies (COURT) RULES, 1959 PRAYING TO DIRECT NGEF TO EXECUTE A SALE deed SELLING THE PROPERTY MEASURING 40 ACRES 18 GUNTAS (40. 45 ACRES) OF freehold LAND AT MADRAS ROAD, NEAR BYAPPANAHALLI, RAILWAY marshalling YARD, BANGALORE. IT IS ALSO STATED THAT UNDER SIMILAR circumstances ADVERTISEMENTS HAVE BEEN ISSUED BY THE NGEF IN RESPECT of SEVERAL OTHER PROPERTIES AND PURSUANT TO OFFERS RECEIVED, THE NGEF has EXECUTED SALE DEEDS, AND THAT SIMILARLY, EVEN AFTER THE MATTER WAS referred TO BIFR, THE NGEF HAS EXECUTED AGREEMENTS TO SELL IN FAVOUR OF the OTHER APPLICANTS AND UNDER THE CIRCUMSTANCES, IT IS NECESSARY TO direct THE NGEF TO EXECUTE A SALE DEED IN FAVOUR OF THE APPLICANT HEREIN and NO INJURY WILL BE CAUSED TO THE NGEF. THE SAID APPLICATION WAS opposed BY THE NGEF AS ALSO THE SECURED CREDITORS AND EHG elektroholding GMBH WHICH IS ALSO HOLDING SHARE IN THE SAID COMPANY. THE LEARNED COMPANY JUDGE AFTER CONSIDERING THE CONTENTIONS OF THE learned COUNSELS APPEARING FOR THE PARTIES HELD THAT THE BIFR WHILE forwarding THE RECOMMENDATION FOR WINDING UP OF THE COMPANY VIDE order DATED 2-8-2002 HAS OBSERVED THAT THE COMPANY WOULD HAVE TO SEEK further DIRECTIONS IN THE MATTER FROM THE CONCERNED HIGH COURT, AND therefore THE APPLICATION BEFORE THE HIGH COURT WAS MAINTAINABLE AND permitted THE SALE. IT WAS FURTHER ORDERED THAT SALE PROCEEDINGS SHALL BE deposited BEFORE THIS COURT AND DISBURSEMENT SHALL BE AS PER THE FINAL order IN THE COMPANY PETITION NO. 154 OF 2002.

(3.) BEING AGGRIEVED BY THE SAID ORDER, THE NGEF LIMITED, HAS preferred O. S. A. NO. 68 OF 2003, EHG ELEKTROHOLDING GMBH, HAS FILED o. S. A. NO. 67 OF 2003 AND SECURED CREDITOR-STATE BANK OF MYSORE HAS filed O. S. A. NO. 70 OF 2003.