GREAVES FESESCO LIMITED Vs. RATLAM ISPAT LTD

JUDGEMENT

(1.) This is an application filed on behalf of Industrial Credit & Investment Corporation of India (hereinafter referred to as "ICICI") for vacation of order dated 28/05/1992 and permission to remitpro-rata shares of State Govemment of Madhya Pradesh and State Bank of Bikaner and Jaipur out of the sale proceeds held by them. In this application there is no case made out for or prayer for approval or leave of company court of the sale affected after commencement of winding up proceedings. Some of the salient facts of this case are as under:-

(2.) On 09/04/1988, Board of Industrial & Financial Reconstruction (BIFR) formed prima facie opinion that the company should be wound up and appointed ICICI as the Operating Agency. The said opinion of BIFR for winding up was forwarded to this court on 23/06/88. In the meantime the proceedings for the winding up of the Company, Ratlam Ispat Limited were instituted vide a substantive petition filed in this Court on 31/03/89. While both the petition as well as the recommendations of BIFR were pending in this Court, ICICI who had acted as Operating Agency before the BIFR in those proceedings, instituted a suit in Bombay High Court being Suit No.158/89 and got a Court Receiver appointed for the assets of the company who locked and sealed the factory premises of the company. The winding up petition filed in this court was admitted on 11/07/89 and the same was advertised. This Court ultimately ordered winding up of the company on the basis of the petition already admitted. The order for winding up was passed on 31/08/90. The said order for winding up was challenged in appeal before the Division Bench. The said appeal was admitted and the operation of the winding up order was stayed. It only meant that the winding up order was held in abeyance, but it did not put an end to the winding up proceedings which had been instituted on 31/03/1989 or the recommendations of the BIFR which had been received in this Court and were pending consideration since 23/06/88. The said appeal was finally disposed of vide order dated 10/05/1991 whereby the only change introduced was at the instance of the applicant that the winding up order should have been passed under Section 20(c) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "SICA") because if an order had been passed under that provision then under sub- section (3) of Section 20. of that Act this Court would appoint an officer of the Operating Agency if the Operating Agency gives its consent to act as Liquidator of the Sick Industrial Company .If such an appointment is made the officer shall be deemed to be and have all the powers of the Official Liquidator under the Companies Act. The Division Bench further recorded that "the Sick Industrial Company, i.e. the appellant had to be wound up but now it would be taken that the appellant company has been wound up under Section 20 of the aforesaid Act and the Company Judge shall proceed as if the company has been wound up under Section 20". Thus in effect, the winding up was allowed to continue and the order of winding up was modified only to the extent that the Company Judge was directed to proceed in accordance with Section 20(3) of the SICA. The winding up has to take place in accordance with the provisions of the Companies Act.

(3.) As the subsequent proceedings before the Company Judge reveal, the Operating Agency i.e. the applicant before this Court did not give its consent to act as Liquidator as a consequence whereof the Official Liquidator attached to this Court had to be appointed the Liquidator for this company also. In effect the variation introduced by the Division Bench did not have any effect on the winding up except for the change that the Company Court should ask the Operating Agency to give its consent whereby its officer could be appointed as the Liquidator of the Company. That consent having not been given, the net result of the exercise was that the Official Liquidator attached to this Court had to be re-appointed as Liquidator for this company.