KAMLAPUR SUGAR AND INDUSTRIES LTD Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) FACTS : Kamlapur Sugar and Industries Limited (hereinafter referred to as "Kamlapur") obtained financial assistance from various finance institutions including Dena Bank, the appellant above named. The company became sick and was unable to discharge its obligation towards secured and unsecured creditors. Dena Bank issued a statutory notice of demand under Section 434 of the Companies Act on September 18, 2003 asking them to pay off the outstanding. The Kamalapur did not adhere to the request. Dena Bank initiated a proceeding before the debt recovery Tribunal Lucknow and obtained certificate dated February 14, 2008 permitting Dena Bank to recover Rs.17 crores approximately. Kamalapur preferred an appeal before the appellate authority. The appellate authority affirmed the decisions vide judgment and order dated December 15, 2008. In this backdrop, Dena Bank filed an application for winding up in 2009 before this Court inter -alia claiming, the Company was in involved circumstances and was unable to pay its debts hence, it should be wound up. The company opposed the application. They contended, being a secured creditor, Bank was not entitled to pray for winding up. Their remedy would lie in execution of the decree. His Lordship negated the contention and ultimately passed the order of winding up vide order dated July 30, 2010 appearing at pages -34 -45 of the paper book. Kamlapur filed an appeal. The Division Bench upheld the judgment and order of the learned Single Judge vide judgment and order dated July 23, 2012 appearing at pages 50 -71. Pertinent to note, the Division Bench heard the matter for five days on and from June 25, 2012. The Division Bench dismissed the appeal on July 23, 2012. Kamlapur never informed the Court, they were trying to initiate proceedings before Board for Industrial and Financial Reconstruction (herein after referred to as "BIFR") established under the Sick Industrial Companies Act, 1985 (hereinafter referred to as SICA).

(2.) THE Official Liquidator took charge of the assets and proceeded to sell the same by public auction. The learned Company Judge conducted the sale on September 20, 2013 and October 8, 2013. When the sale was being concluded, the erstwhile management of the company suddenly informed the learned Company Judge, they had already approached the BIFR. Pertinent to note, even after the order of winding up, Kamlapur tried to stall the winding up process, firstly on January 27, 2012 when an application for sanction of a scheme was dismissed by the learned Company Judge making serious comments about their conduct. The second attempt also failed on February 10, 2012 when the learned Single Judge again rejected the proposal for revival vide order dated February 10, 2012 appearing at pages 80 -82.

(3.) THE third attempt failed on October 19, 2012 when the learned Judge while passing an order appearing at pages 75 -76, rejected the prayer for adjournment on the plea of settling with the creditors. Similarly, attempt was made on September 21, 2012. Since all the avenues were closed and desperate attempt to forestall the sale was not successful the company approached the BIFR in June 2013. The BIFR initially declined to entertain the reference. Subsequently, by an order dated October 7, 2013 appearing at pages -10 -11 BIFR registered the reference under Section 15(1) of SICA. On October 7, 2013 one Manoj Saha claiming to be the authorized representative of the erstwhile management filed an application for stay of the winding up and all connected matters as also for consequential order of restraint on the Official Liquidator from selling the assets. The learned Single Judge, vide judgment and order dated January 28, 2014, allowed the said application. His Lordship vide judgment and order of the said date appearing at pages 106 -115, granted stay of the winding up proceeding subject to the order of the BIFR or the appellate authority. Being aggrieved, Dena Bank filed the instant appeal that we heard on the above mentioned dates.