(1.) MIDEAST Integrated Steel Ltd. is under provisional liquidation. Vide order dated 19 September 2002, passed in Company Petition No. 337 of 1996, the Official Liquidator attached to this court was appointed as the provisional liquidator with direction to take over the assets of the respondent company (hereinafter referred as 'the company') including books of accounts, etc. The assets of the company are in his possession now.
(2.) IT may be noted that the respondent company undertook the task of establishing and commissioning a plant in Orissa. For commissioning of the said plant, financial assistance was taken from various financial institutions, including the banks. Certain other parties had also supplied materials, etc., on credit. Before this plant could be fully commissioned and production started, it went into rough weather. As substantial amounts are due and payable to various banks/financial institutions/ secured creditors as well as other unsecured creditors, they started demanding their dues. Number of company petitions came to be filed in this court seeking winding up of the respondent company under the provisions of sections 433(e), 434 and 439 of the Companies Act, 1956 (for short 'the Act'). In these petitions, show cause notices were issued and during the pendency of these proceedings, the respondent company made efforts to pay off these creditors. Some amounts were paid. Certain assurances and undertakings were also held out. However, the respondent company could not stand up to those assurances. Some time in the year 1999, the company/applicant also filed the application proposing scheme of arrangement to pay the petitioning creditors. The orders were passed in this application from time to lime. However, as noted above, since the company/applicant could not adhere to its commitments, the matter was considered by this court on 19 September 2002, See, infra, Batliboi Limited v. Mideast Integrated Steels Ltd. (2005) 3 L.J 90 and by a detailed order, the said scheme of arrangement was rejected. It was, inter alia, observed that in the scheme proposed, the secured creditors were not taken into consideration; amount due to certain creditors was not correctly shown; although representation was made to the effect that the company was negotiating with some third parties for commissioning of the plant, it was not mentioned as to whether these negotiations had reached fusion or not. On this basis, the court came to the conclusion that the scheme as proposed was not proper. Another prominent and influencing factor was that all the petitioning creditors had opposed the scheme in unison. The court thus observed that no useful purpose would be served in directing convening of the meeting of the creditors as 75% or more creditors have to approve such a scheme provided under Section 391(1) of the Act which was most unlikely. While rejecting the scheme, as mentioned above, the Official Liquidator was appointed as the provisional liquidator.
(3.) THE aforesaid facts are noted because the ex -management has now propounded another scheme which is contained in Company Application No. 1144 of 2004. According to the applicants there is a substantial change in the circumstances compared with those prevailing at the time when the aforesaid order dated 19 September 2002 was passed.