SAROJ G. PODAR Vs. STATE

JUDGEMENT

(1.) THIS appeal filed by the original petitioners impugns the judgment dated 3rd April 1996 passed by the learned single Judge rejecting the scheme in respect of a company in liquidation filed by the appellants.

(2.) CERTAIN salient facts of the matter are as disclosed hereinafter. On 25th June 1938, Shree Shakti Mills Limited was incorporated as a company. The company was engaged in the business of manufacturing and dealing in man-made fabrics since the date of incorporation and was carrying on the said business until the date of the winding up order i.e. 21st January 1981. Under a Deed of Lease dated 3rd May 1951 entered into between the Governor of Bombay and the aforesaid company, land situate at off Hains Road, Mahalaxmi, Mumbai, admeasuring about 29,981 sq. yards equivalent to 25,007 sq. mtrs. or thereabouts was leased to the company commencing from 1.11.1935 for a period of 50 years. Out of the aforesaid area, an area of about 714 sq. yards equivalent to 595.54 sq. mtrs. has been acquired by the Municipal Corporation of Greater Bombay for public road. The lease deed provides for renewal of the same at the option of the company. The lease having commenced on 1.11.1935 has admittedly expired on 31.10.1985. It is an agreed position that the Official Liquidator has been paying the lease rent to the Collector of Mumbai and has on 4th September 1985 requested the Collector of Mumbai for renewal of the same in accordance with the terms of the said lease. However, it is an agreed position that no document of fresh Indenture of Lease is executed till this date. On 21st January 1981, in a winding up petition filed by Mahindra Ugine Limited, a winding up order was passed by this Court. The Official Liquidator took possession of all the assets of the company, including the aforesaid land. It is an admitted position that under the orders of the Court, all assets of the company, including all movables, plant and machinery of the company and an immovable property of the company at Deolali, except the aforesaid land at Mahalaxmi have been sold and on 12.2.1994, after taking necessary directions from the court, the auction of the said land was fixed on 3.3.1994 and by advertisement dated 12.2.1994 tenders were invited to be lodged on or before 28.2.1994 with the Official Liquidator. On 25.2.1994 the appellants i.e. Podars filed Company Application No.102 of 1994 in the winding up petition for stay of the auction sale and on the same day, Podars also filed Company Application No.103 of 1994 under sections 391, 392 and 393 of the Companies Act for approval of the scheme of compromise and/or arrangement. The Court ordered stay of auction. On 7.3.1994 one Ramraj Kumar Patel and two workers of the company filed Company Application No.104 of 1994 for intervention and postponement of auction of the land proposing revival of the company. On 23.6.1994 an order was passed by the Court giving directions for convening the meetings of various classes of creditors. The date of meeting was changed to 20th August 1994. On 15th July 1994 and 16th July 1994 notices convening the meetings were published in Free Press Journal and Janmabhoomi, respectively. On 22nd July 1994, the President and Vice President of Sanjay Shakti Silk Workers' Union claiming registration of about 668 workers of the said company as its members as on the date of the winding up order filed an intervention application. It was contended that the scheme filed by the appellants is not for revival of the unit and, therefore, the workers' interest will not be served; that the proposed scheme took care of only 77 workers whereas the workers were more than 600. It was further contended that the liability of the workers was to the tune of Rs.1,49,63,189.16 whereas the scheme was restricted to Rs.75,00,000/- only towards the workers' liability. It was contended that the interveners, in fact, had a scheme for the revival of the unit itself and, therefore, more beneficial to the workers. The Court gave directions to the Official Liquidator and both labour Unions, the recognized one, viz., Mill Mazdoor Sabha as also the new Union Sanjay Shakti Silk Workers' Union to give lists of workers with full addresses to the Chairman appointed for the proposed meeting of various classes. On 28th July 1994, notices convening the meetings were also published in Loksatta. Notices convening the meetings were also served upon the creditors. On 20th August 1994, meetings of various classes (we are told about eight) were held and the scheme propounded by the appellants was approved by overwhelming majority at all the meetings and on 2nd September 1994, report to that effect was submitted by the Officer who was nominated to preside over the meeting. On 12th September 1994, Petition No.395 of 1994 was filed by the appellants for sanction of the scheme.

(3.) IT is necessary to mention that one Mathew also proposed a scheme wherein it was proposed to revive the manufacturing activity of the company by undertaking manufacture of 'Denim' (a textile) on the said land and about 250 workers of the company would be given employment in the first year. It is unnecessary to deal with the claim by Mathew as the learned Judge has exhaustively dealt with the same and rejected the same by the very impugned order and no one has filed any appeal against the same.