GATI CARGO MANAGEMENT SERVICES Vs. SBL INDUSTRIES LTD

JUDGEMENT

(1.) This is a first motion joint application filed under section 391 to 394 of the Companies Act, 1956 ('Act', for short) in connection with the scheme of arrangement and compromise proposed between the company by name S.B.L. Industries Ltd (in liquidation) and its creditors. The scheme is propounded by P.C. Sen, the Ex-management and Director company, who holds substantial shares in the company and for issuing directions for holding the meetings of the shareholders and various classes of creditors.

(2.) The company, which is now under liquidation was incorporated as a public limited company on 26.12.1960. The registered office of the company at the time of passing the winding up order was situated at Delhi.

(3.) The main objects of the company as set out in its memorandum of association, in brief, are to carry on the business as manufactures and dealers of all kinds of engineering goods including ball, roller and tapered bearings and all kinds of mechanical, electrical and scientific appliances, instruments, apparatus, tools, contrivances and accessories. The company manufactured ball bearings in its factory at Ranchi since incorporation. During the initial period of 30 years, the business was successful; however, from the late 80s the company started suffering losses. It was declared as a sick unit and financial rehabilitation package was sanctioned by the BIFR in February, 1990. For some years thereafter there was improvement in the performance of the company but again from 1997/98, the company started suffering losses and eventually commercial operations ceased in August, 2001 due to shortage of working capital.