CENTRUM FINANCE LIMITED Vs. PHAR EAST LABORATORIES LTD

JUDGEMENT

(1.) All these petitions are filed against the respondent Company, namely, Phar-East Laboratories Limited under Section 433 and 434 of the Companies Act, 1956 for winding up of the respondent Company.

(2.) This Court has passed an order on 20.02.1997 in Company Petition No. 201 of 1996 admitting the said petition. Thereafter, the order of admission was recalled on 12.03.1997 giving certain directions to the respondent Company to make the payment to the petitioner. However, as per the direction the respondent Company has not made the payment to the petitioner and hence, on 21.10.1997, again the order of admission of the petition was passed and the Court has also passed the order with regard to public advertisement in "Indian Express" English Daily and "Financial Express" - Gujarati Daily. The said order was challenged in O.J. Appeal No. 57 of 1997 by the respondent Company and the Division Bench vide its order dated 05.02.1998 stayed the order of advertisement on condition that the respondent Company shall make payment to the petitioning Creditor of Rs. 20 Lacs in the first instance in 4 equal monthly installments of Rs. 5 Lacs each, the first of such installments becoming due on 5th March, 1998, followed by successive installments on 5th of every succeeding calendar month. The petitioning Creditor was also given liberty to accept the said amount subject to its rights and contentions. The Court has also made it very clear that in case of default of any instalment on the due date, the respondent Company would not be entitled to claim any extension in respect thereof. It was also observed that in case of any such default in respect of any of the installments provided in the said order, the stay granted by the Court against the advertisement of the petition would stand vacated ipso facto without further orders in this regard and the appeal which was filed by the respondent Company would also stand dismissed without any further order. The Court has also made it very clear that only the order as to the advertisement of the petition was stayed subject to the aforesaid conditions and there was no stay against the further proceedings and/or ancillary proceedings before the learned Company Judge.

(3.) This Court has thereafter passed an order on 26.03.1998 in Company Petition No. 201 of 1996 with Company Application No. 97 of 1998 with Company Petition Nos. 395, 256, 225 of 1997 and 387 of 1998 whereby the Court has given the last opportunity to the respondent Company. The matter has come up for hearing again on 21.04.1998 and a detailed order was passed by this Court. The Court was constrained to observe that there was a glaring failure on the part of the respondent Company to honour the commitments made from time to time and, therefore, all other petitions were also admitted on that day. The Court has also passed further order of advertisement and directed that necessary advertisements would be given as directed earlier and advertisement in the Official Gazette was dispensed with. The Court has also permitted the petitioner in Company Petition No. 225 of 1997 to give advertisement in the Newspapers published from Mumbai. The Court has further observed that in as much as large amounts were due to number of Creditors and commitments made from time to time were not honoured, the respondent Company was restrained from creating any further encumbrance from its assets and creating any third party charges or rights or disposing off its property any further without permission of the Court. The prayer for appointment of the Provisional Liquidator was, however, deferred and the respondent Company was directed to file its reply on the next date of hearing.