CHAMPARAN SUGAR MILLS LIMITED Vs. ABC

JUDGEMENT

(1.) The Champaran Sugar Company Limited having two sugar factories in the east and west of the districts of Champaran in the State of Bihar was ordered to be wound up vide the order, dated 5.9.1994 passed by this court on recommendation to the said effect been made by BIFR. This court has appointed the Official Liquidator, High Court, as the liquidator of the said company. During the course of the liquidation proceedings, certain parties had submitted schemes for rehabilitating the two factories and for running the same on lease. Offers had also been made in response to the advertisements for the outright purchase of the two factories concerned. Since the offers and the schemes submitted by the concerned parties before the court could not materialise for the reasons stated in the orders passed, by this court, the workers of the two factories who formed a Cooperative Society known as Champaran Chini Mill Zirnodhar Sahkari Samiti Limited, Betia, West Champaran (Samiti, in short), submitted a scheme before this court seeking permission to run the two factories. Final orders on the said scheme could not be passed, as the same was not found to be comprehensive enough. Besides, the said Samiti had not been able to satisfy the court regarding the sufficiency of funds which would be necessary to run the two factories which are lying closed for the last several years. However, as the prayer was made that the crushing season was on and the workers and the cane-growers of the said region who were solely dependent upon the running of the two factories are facing starvation and acute financial crises, this court vide the order, dated 2.12.1997 permitted the said Samiti to run the Chanpatia factory of the company (in liquidation) as an interim measure during the crushing season 1997-98 pending final consideration of their scheme by this court for running the mills and managing the same. The court, however, imposed certain conditions on the Samiti, which has been enumerated in the order, dated 2.12.1997. It is on record that for the said crushing season, the factory ran for 65 days. The account duly audited by the chartered accountant was filed before the court and is also on the record. An application (A-163), dated 20.8.1998 has now been filed on behalf of the Chanpatia Sugar factory for the crushing season 1998-99 and also to pass necessary orders regarding the conversion of the Barachakia sugar factory so that the same could also be made to run. Before this application could be heard and orders passed thereon, an application (A-166) was filed on behalf of one Chakia Chini Mill Kisan Mazdoor Sangharsh Samiti, Barachakia, through its General Secretary - Mathura Prasad and two others (hereinafter referred to as the Sangharsh Samiti), opposing the prayer made in the application (A-163). Subsequently, another objection (A-170) was filed by one T.P. Singh and 42 other applicants to the application (A-163) and in support of the objection (A-166). A supplementary affidavit (A-171) was also filed by one Ramanand Yadav claiming himself to be a member of the Sangarsh Samiti in support of the objection (A-170). Counter and rejoinder affidavits have been exchanged between the applicants and the objectors. The application along-with the objections was directed to be listed for hearing on 10.11.1998 and on the said date another application on behalf of 126 persons was filed in support of the objection (A-170). This court vide its order dated 11.11.1998 held that before the application (A-163) and the objections are heard and decided on merits, it would be proper to get an inspection of the two factories done by the official liquidator in the light of the allegations and counter allegations made by the parties to ascertain a correct factual picture, if that be possible. Consequently, the court directed the official liquidator to make an inspection of the two factories and gave certain directions in respect thereof. The said directions are contained in the order, dated 11.11.1998, passed on the order sheet, consequently, it is not necessary to enumerate the same in this order. In compliance to the said order, the official liquidator has submitted his report No. 78 of 1998 after serving a copy of the same on the contesting parties. The objectors have filed objections to the said report.

(2.) I have heard Sri R.P. Agarwal, learned counsel for the applicant in support of his application (A-163), Sri Tarun Agarwal, learned counsel for the objector Sangharsh Samiti and the official liquidator. I have perused the affidavits filed by the parties including the objections and the report of the official liquidator.

(3.) It has been submitted on behalf of the applicant that though the Samiti has not been able to follow all the directions given by this court in the order, dated 2.12.1997 and there were some defaults, yet without there being any major financial assistance, the concerned workmen have by dint of their hard labour and sincere efforts been able to run the factory for 65 days and have produced sugar worth about Rs. 3 crores. Though the factory has not been able to generate profits and has incurred a loss of about Rs. 3 lakhs, yet the workmen and the cane-growers have been paid substantially for the said crushing season. It has further been submitted that the experiment has been successful and similar order's for running the factory may be passed for the current crushing season also. The objectors on the other hand have submitted that the Samiti in question has misutilised the opportunity and there has been mis-appropriation and defalcation of funds. The allegations are contained in the objections filed on which reliance has been placed. It has also been contended that the official liquidator who was directed by the court vide the order, dated 11.11.1998 to make an inspection of the two factories and to submit his report has not carefully carried out the directions given in the order and the report filed by him is neither an accurate report, nor it depicts a correct picture.