STATE BANK OF INDIA Vs. ENGG MAJDOOR SANGH

JUDGEMENT

(1.) Some of the creditors of Beclawat of India Limited filed Company Petition Nos. 62, 63, 64 of 1991 for winding up the Company as it was unable to pay its debts. By order dated 2.12.1999 the Company was ordered to be wound up and the Official Liquidator was appointed as Liquidator of the Company in liquidation.

(2.) Engineering Majoor Sangh, Baroda, acting through K.W. Desai, filed Company Application No. 104 of 1994 before this Court proposing a scheme of compromise and arrangement between the workers of the said Company (in liquidation) as well as the unsecured creditors and other interested parties. By order dated 6.3.1995 this Court directed the applicant i.e. Engineering Majoor Sangh to convene meeting of class of creditors but observed that the meeting will be held after giving due notice to the secured creditors. The Chairman of the meeting submitted his report. Thereafter, Engineering Majoor Sangh, acting through Shri K.W. Desai filed Company Petition No. 224 of 1996 praying for sanction of the scheme of compromise or arrangement by virtue of Section 394 of the Act. An impression created by the applicant in the said application was that there were no secured creditors of the Company in liquidation. In paragraph 12 of the said application it was specifically mentioned that "notice of this petition need not be served on any person. Consequently, by order dated 23.9.1997 this Court allowed the petition and sanctioned the scheme presented by the Engineering Majoor Sangh, Baroda, acting through Shri K.W. Desai without issuing any notice to any party. The Court also passed order directing the Official Liquidator to handover the assets to the said applicant Union after making complete inventory thereof.

(3.) State Bank of India, Shareholders of the Company and unsecured creditors of the Company in liquidation filed the above numbered Company Applications for review of the order dated 23.9.1997 on various grounds including non-convening the meeting of secured creditors, unsecured creditors and shareholders and also for non-compliance of the provisions of the Act and the Company Court Rules. The applicants in the review application prayed for the main reliefs: