INTERADS ADVERTISING PVT. LTD Vs. SIVALIK CELLULOSE LTD

JUDGEMENT

(1.) This is an application by Mr. Inder P. Choudhrie, former Director of Sivalik Cellulose Limited ('SCL') seeking, inter alia, various directions to Hindustan Lever Limited ('HLL') to honour all the liabilities and commitments which arose during the period which SCL was under its management and control.

(2.) The background to the present application is that SCL was promoted by the Applicant, Mr. Inder P. Choudhrie, in June 1975. A plant for the manufacture of writing and printing paper with 20 tonnes per day capacity, at a cost of Rs. 312.59 lakhs, was set up at Gajraula, Moradabad District, Uttar Pradesh ('U.P.'). Although the company started production in January 1979, it was unable to achieve a production capacity higher than 10 to 12 tonnes per day, which was lower than the break-even point of about 17 tonnes per day. SCL continuously incurred cash losses and suspended operations in March 1982. As on 30th June 1986 SCL had accumulated losses of Rs. 653 lakhs. Industrial Development Bank of India ('IDBI') was one of the secured lenders of SCL in whose favour there was a mortgage of title deeds as well as hypothecation of movable properties, plant and machinery of SCL. As SCL failed to repay the loans, IDBI filed a mortgage Suit No. 1323 of 1983 in the Bombay High Court. By an order dated 25th July 1983 the Bombay High Court appointed an ad interim Receiver of the properties of SCL.

(3.) At that stage Interads Advertising Private Limited filed Company Petition No. 5 of 1985 in this Court under Sections 433, 439 and 443 of the Companies Act, 1956 ('Act') against SCL seeking its compulsory winding up on the ground of its inability to pay its debts. By an ex-parte order dated 9 th December 1986 SCL was wound up by this Court and the Official Liquidator ('OL') was appointed as a Liquidator of the company.