IN RE: MOTOROL (INDIA) LTD. Vs. STATE

JUDGEMENT

(1.) THIS application is filed by Motorol (India) Ltd. for direction to convene meetings under section 391 of the Companies Act, 1956 (hereinafter 'the Act') for the purpose of considering and, if thought fit, approving with or without modification the scheme of compromise and arrangement proposed between the applicant -company, its shareholders and its creditors, and for consequential directions.

(2.) THE applicant -company is engaged in the business of manufacturing, buying, selling and processing of industrial oils and other varieties of oils and also other products, like brake fluids and greases. According to the applicant -company, it was making good profits but for last 4 -5 years the situation has changed on account of the multinationals and domestic companies having entered in the lubricants industry. The company has in its employment 48 workers. The company has not been able to pay any dividends since 1994 -95 and the creditors' outstanding are also overdue. However, the company has now worked out a turn -around strategy in order to overcome the prevailing critical liquidity problems and also pay off its creditors through a scheme of compromise and arrangement between the company and its creditors as also the shareholders which is at annexure B to the application.

(3.) THE company has entered into an understanding for a joint venture proposal with one NRI group which will invest to the tune of Rs. 10 crore. According to the company, it is discussing with few banks for its working capital requirement to the tune of Rs. 10 -12 crore. The company also proposes to sell of its office building at a good price.