BATLIBOI LIMITED Vs. MIDEAST INTERGREATED STEELS LTD.

JUDGEMENT

(1.) MR . Nain, learned counsel for the respondent company prays for an adjournment of one month to place on record some documents to illustrate that tangible results have been achieved in respect of the proposed scheme of arrangement. Keeping in view the fact that the previous undertakings given to this court have been violated with impunity, and that repeated adjournments have been taken by the respondent company in the hearing post, the revival of the petition, this prayer is rejected.

(2.) THE brief history of the litigation in this court needs to be recounted. Various winding up petitions have been filed and while they were pending consideration, an application under Order XXIII Rule 3 of the CPC was considered and allowed by orders dated 19 November 1999. The terms of the application need not to be reiterated, for the reason that the compromise was stillborn inasmuch as payments were not received by any of the petitioning creditors in conformity with the compromise. Undertakings have also been given on behalf of the respondent company which have been violated. In respect of the claims/debts owed to financial institutions such as IDBI, IFCI, IIBI, LIC and UTI, etc., the amount outstanding is stated to be Rs. 275 crores. However, a copy of the proposed scheme of arrangement filed in the petitions on 15 May 2002, has been handed over to Mr. Sumant Batra, learned counsel appearing for these institutions in the court today. This is only to underscore that the mala fide intentions of the respondent company are writ large and that their intention is only to pro -tract the proceedings.

(3.) IN the order dated 30 April 2002 -it had been noted that if no viable scheme was forthcoming by 15 May 2002, the official liquidator attached to this court would be appointed as the provisional liquidator the take over the charge of the assets including the books of accounts of the respondent company. In view of these orders, the present proposed scheme of arrangement, which is CA 569/2002 in CP 280/1999 has been filed by the respondent company. All the petitioning creditors have stated in unison that they have carefully perused the scheme and found it totally unacceptable. This scheme under Section 391(1) of the Companies Act, 1956, has been read out in its entirety. In the first place, the scheme only envisages an arrangement with the unsecured creditors, whose total worth is stated to be for the sum of Rs. 64 crores. In contrast thereto the secured creditors, as per the showing of the respondent company itself are of Rs. 275 crores. Since the scheme does not take the secured creditors into account, it must be rejected forthwith.