SPICE JET LTD Vs. MALAN PUR STEEL LTD

JUDGEMENT

(1.) These are two cross appeals. Spice Jet Limited (Spice Jet for short), Paradise Credit Private Limited, Kesha Investment Pvt. Limited and Modi Overseas Investments Limited (collectively referred to as Modi Group) have filed Company Appeal Nos. 1 & 2/2011 impugning the order dated 14 th July, 2010 passed by the Company Judge in CA No. 1130/2005 in CP No. 385/2003 and the order dated 16 th July, 2010 in Co. A. (SB) 2/2000 and CA 623/2000. The Company Appeal No. 28/2010 has been preferred by Malan Pur Steel Limited (Malanpur, for short) impugning the decision dated 15 th July, 2005 passed by the High Court of Delhi in CA No. 797/2000 and CA No. 1852/2002 in CP No. 385/2003, sanctioning the scheme under Section 391(2) read with Section 394 of the Companies Act, 1956 (C. Act for short) on the terms set out therein. Objections were raised by Malanpur before the Company Judge against the scheme, in the said Company Appeal.

(2.) For the sake of convenience we have decided to first take up the appeal preferred by Malanpur. Primarily three contentions have been raised. First, it was submitted that Malanpur was wrongly treated at par with the unsecured creditors or the inter-corporate depositors. Shares pledged with Malanpur had been sold for recovery of their dues, and thus they formed a separate class. The second argument raised was that the principal amount claimed by Malanpur was not Rs.5 crores i.e. the amount of inter-corporate deposit, but included Rs.83,96,465/- payable as interest for which a decree on admission was passed by Calcutta High Court in CS No. 161A/1997 vide order dated 23 rd April, 1997. Third, it was submitted that criminal prosecution proceedings under Section 138 of the Negotiable Instruments Act, 1881 (NI Act, for short) cannot be made the subject matter of the order under Section 391(6) of the C. Act.

(3.) Contentions of the respondent Spice Jet Ltd. and the Modi Group are that: