KOTESWARA RAJU DANTULURI Vs. GARVEE GRANITES LIMITED

JUDGEMENT

(1.) This appeal filed under Section 483 of the Companies Act, 1956 (for short, the Act), is directed against the order of the leaned Company Judge in CA No.879 of 2001 in RCC No.6 of 2001 dated 13-2-2002 dismissing the application filed by the appellant herein under Section 466 of the Act seeking stay of the winding up order passed by the learned Company Judge dated 20-9-2001 in RCC No.6 of 2001.

(2.) The background facts leading to the filing of the appeal be noted briefly as under: M/s. Garvee Granites Limited (hereinafter referred to as the 'company'), was incorporated as a private limited company on 21-5-1992 and got Factory Licence on 7-12-1995. The object of the company was to carry on the business to produce, process, refine, export, buy, sell and generally deal in polished granite and marble tiles of all kinds. The company went for public issue with an equitable capital of Rs.7.50 crores divided into Rs.75 lakhs equity shares of Rs.10.00 each. Public offer was subscribed 1 1/2 times to the issue. The company owns quarries of Ac.2.50 in Arekadu village, Ac.7-88 in Kanchirajugudem, Ac. 10-30 in Gudurupadu, Ac. 7-00 in Mallemadugu, Ac. 1.70 in Bhimrolu of Khamman District, Ac. 4-95 in Ravigudem, Ac. 8-00 in Ammupalem of Warangal District and Ac.5-00 in Pasumanda village of Chittoor District to meet half of its requirements and the rest is to be acquired from other quarries. The appellant, viz., Koteswara Raju Danthuluri and one Mr. G.V.S. Prasad were the promoters of the company and they are engineering graduates with experience in mining and export. With the financial assistance from 1FCI, State Bank of India and IIBI, respondents 3 to 5 herein, the promoters incorporated the company as a first generation technocrat and export-oriented unit. The company imported special machinery and the same was modified to suit the climatic conditions of the area where the factory was located. The company commenced its commercial production in December, 1995 and stabilized its production and the production level had gone to Rs.301.16 crores in the year 1997-98. However, during the year 1998-99, due to non-realisation of sale proceeds by the bank authorities, it became difficult for the company to procure raw materials and to pay mounting cost of wages and ultimately the company suffered huge losses. Under those circumstances, the company became sick and went before the Board for Industrial and Financial Reconstruction (for short, BIFR). The BIFR, after attempting to rehabilitate the company and having failed in that attempt, held that there is no rehabilitation proposal with the means of finance fully tied up for consideration of the Board despite adequate opportunities having been given to all concerned, and accordingly it recommended for winding up of the company in its reference to the Company Court dated 18-1-2001. The said reference was numbered as RCC No.6 of 2001 by the Company Court. The learned Company Judge, by his order dated 20-9-2001 allowed the RCC. The said order reads as follows:

(3.) The learned Company Judge, on appreciation of the materials on record and the proposals and the counter-proposals made by the parties, held--