MADURA COATS LTD. Vs. DUNLOP INDIA LTD.

JUDGEMENT

(1.) Years of waiting to be paid its dues and the perceived daylight robbery in the company have prompted this petitioning-creditor to seek the immediate appointment of a provisional liquidator over the company even as the matter as to whether the company should be wound up is pending consideration. The petitioning-creditor asserts that if there is any modicum of corporate decency that the law in this country recognises and there is any meaning left to the principle of rule of law, there cannot be any second thoughts on its immediate prayer. The petitioning-creditor says that the conduct of those in management of the company makes a mockery of the process of law and exhorts the court to not merely sit by and endorse the alleged corrupt practices indulged in by the management.

(2.) As in every case under Section 450 of the Companies Act, 1956, the basis of the petitioning-creditors claim has first to be, prima facie, assessed and then the other grounds looked into. It is only upon finding a seemingly unimpeachable claim, that the court can proceed to investigate into the additional factors cited; for, the appointment of a provisional liquidator is an exceptional order. The claim in this case is founded on a transaction for supply of goods by the petitioning creditor to the company and the companys admission of a part of the dues in a draft rehabilitation scheme that was placed before the Board for Industrial and Financial Reconstruction (BIFR) in course of a reference relating to the company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioning-creditor says that its claim in the present proceedings is limited to the admission in the draft rehabilitation scheme of slightly over Rs. crore and it has lodged a suit elsewhere in this court for its balance claim.

(3.) There are several creditors petitions that have been filed for having the company wound up. Two of such petitions have been admitted and have been taken up at the post-advertisement stage where several other creditors have jumped into the fray to lodge their claims and support the prayer for winding-up. At least three others have showed up, claiming to be creditors of the company and seeking to resist the order of winding-up. The present matter cannot be seen in isolation and the several orders that have been passed on the creditors winding-up petitions relating to this company over the last four months or so form the backdrop for the present order.