DUNLOP INDIA LTD. Vs. MADURA COATS LTD.

JUDGEMENT

(1.) THIS appeal is directed against judgment and order dated 26th March, 2012 passed by the learned Single Judge on the application made by the respondent above -named for appointment of provisional Liquidator pending disposal of the winding up petition. summary of the fact on which the present appeal is preferred is set out hereunder: -

(2.) THE respondent above -named M/s. Madura Coats Limited (hereinafter in short Madura) claiming itself to be one of the creditors filed the application for winding up being C.P. No.13 of 2009 which is yet to be admitted by the learned Company Judge and the hearing of which is awaiting. Pending disposal of the above matter application being C.A. No.34 of 2012 was filed on which the impugned judgment and order was passed. The claim of the Madura in its winding up petition is based on admission of a sum of Rs.2.02 crores made in course of reference proceedings before BIFR. Admission was made in the draft rehabilitation scheme proposed and filed by the appellant company before the BIFR. In spite of such admission followed by repeated demand made by Madura, the appellant company failed and neglected to pay and/or secure above principal amount together with interest accrued thereon. The said winding up petition is seriously contested by the appellant herein contending that this claim is also part of the claim made in the civil suit filed in this Hon'ble Court in ordinary original civil jurisdiction wherein decree for an aggregate sum of Rs.9 crores and odd together with interest has been claimed. In the said civil suit an application for summary judgment under Chapter XIIIA of the Original Side Rules of this Court was taken out and necessary order for payment of Rs. 3 crores and odd was passed by the learned First Court in Civil jurisdiction followed by affirmation of the Appellate Court in the same jurisdiction however subsequently Supreme Court has reduced on modification, to the amount of security of Rupees 1 crores. As the claim was seriously disputed leave to defend has been granted by this Court on furnishing security as modified by the Supreme Court. According to the company as the claim is seriously disputed in the civil suit the winding up petition was not maintainable at all and as such there is no chance of success in the winding up petition.

(3.) THE company in total disregard to order dated 9th December, 2011 passed by the learned Trial Judge failed to furnish, the number of creditors with details of their respective dues as recorded in company's books; the source of fund of the company based on the company's annual accounts for the recent financial years; the value of company's assets, particularly fixed assets; fullest particulars of all sums expended by the company by way of payment to the creditors after institution of Company Petition No.233 of 2008; the extent of the statutory dues of the company based on the claims of the appropriate authorities; the list of unencumbered assets of the company if any. That apart the present management of the appellant company had indulged in acts of manipulation and purported transactions which appear on their face to be subterfuges or bogus and this will be evident from the fact that company had sold its assets without the information to BIFR or AAIFR or the Assets Sale Committee and without following open tender process. The four properties worth Rs. 320 crores have been transferred as per the valuation of the appellant. The same was transferred to its four subsidiaries namely Dunlop Property Private Limited, Dunlop Infrastructure Private Limited, Dunlop Estates and Bhartia Hotels. The real value of the aforesaid four immovable properties would be around Rs.2000 crores and the transferee companies are under the same management receiving almost no consideration. In consideration of transfer of the four assets to its own subsidiaries shareholding of all the subsidiary companies have been transferred without paying any money consideration in favour of the appellant company. All the sales and/or transfer were made when the company was still under the purview of the Board for Industrial and Financial Reconstruction (BIFR) and orders under Section 22A of the SICA lawfully passed were valid and subsisting. No permission of the BIFR was obtained to sell any of the assets. Entire exercise of sale and/or transfer of the assets by the company was conducted by -passing the process of the Assets Sale Committee. There was no advertisement published nor was there any reserve price fixed. In short the present management of the Committee in violation of the order of the restriction under Section 22A of SICA and in scant disregard for the law, sold and transferred aforesaid four immovable properties of company leaving the company's creditors, employees and workmen in the lurch. All these facts are recorded in the order of BIFR dated 23rd July, 2007 and order of AAIFR dated 7th March, 2002.