JAIPRAKASH ASSOCIATES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) U.P. State Cement Corporation Limited was incorporated as a company under the Companies Act, 1956. The said company carried on commercial operations till 1998 where it is suffered heavy losses and, upon erosion of its net worth, fell within the ambit of the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR declared this company as a sick industrial company in 1992 and, subsequently, recommended its winding up. Upon receipt of the recommendation from the BIFR, the High Court passed an order dated 08.12.1999 for winding up the Corporation and appointed the Official Liquidator attached to the High Court to act as the Liquidator of the said Corporation.

(2.) The Official Liquidator issued an advertisement in August, 2005 for sale of the cement plant and other assets of the Corporation. Based on this advertisement, the petitioner gave his bid of Rs.459.00 crores, which was found to be the highest and was accepted. The petitioner, accordingly, paid a sum of Rs. 459.00 crores to the Official Liquidator.

(3.) The petitioner, being aggrieved by the issuance of the notice, has filed the present writ petition contending that it had only purchased the assets of the Corporation pursuant to the winding up order of the Corporation and that the petitioner cannot be saddled with the past liability of the Corporation. The petitioner further contended that there was no stipulation in the advertisement that the liability of the Corporation would fall upon the petitioner.