EMPLOYEES ELCONMET LTD Vs. IPICOL

JUDGEMENT

(1.) THIS is an application filed by the employees of M/s. Elconmet Ltd. (for short, 'the Company') in Company Act No. 17 of 2001 to declare the sale of the assets of the said Company as null and void.

(2.) THE facts briefly are that the Company made a reference to the B.I.F.R. under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the 'SICA'). The reference was dismissed as non -maintainable by the B.I.F.R. on 30.4.1991, the Company preferred an appeal before the appellate authority for industrial and financial reconstruction and by Order dated 12.12.1991, the said appellate authority remanded the case back to the B.I.F.R. After all attempts to rehabilitate the Company failed, the B.I.F.R. decided in its proceedings held on 19.2.2001 that it is just and equitable in the public interest to wind up the Company and appointed the IPICOL (Industrial Promotion and Investment Corporation of Orissa Ltd.) as operating agency in terms of Section 20(4) of the SICA to arrange for disposal of the assets of the Company and directed that the entire sale proceeds after deducting expenses incurred in connection with the sale of the assets shall be deposited with the High Court for disposal by the Official Liquidator as per the provisions of the Companies Act, 1956. Paragraphs -12, 13 and 14 of the said proceedings of the B.I.F.R. held on 19.2.2001 are quoted herein below :

(3.) THEREAFTER , Misc. Case No. 35 of 2003 was filed by the IPICOL stating therein that pursuant to the proceedings of the BIFR dated 19.2.2001, IPICOL constituted a Assets Sale Committee and has disposed of the assets of the Company having followed the guidelines prescribed by the BIFR and has submitted a report to the BIFR and the final bid of the highest bidder Mr. Shyam Sundar Agarwala of Bhubaneswar for purchase of the fixed and current assets of the Company at Rs. 131 lakhs as per the recommendation of the Assets Sale Committee has been approved by the BIFR. A copy of the letter dated 12.9.2002 of the Bench Officer -II intimating the CMD of IPICOL about such approval of the final bid by the BIFR has been annexed to the Misc. Case No. 35 of 2003 as Annexure -2. In the said copy of the letter dated 12.9.2002 it is also mentioned that the Bench has directed the IPICOL to deposit the entire sale proceeds after deducting the expenses of Rs. 98,961/ - incurred by IPICOL towards the sale with the High Court for orders for distribution in accordance with the provisions of Section 529(A) and other provisions of the Companies Act, 1956. In the said Misc. Case No. 35 of 2003, a prayer was also made to allow IPICOL to deposit the entire sale proceeds less the aforesaid expenses towards sale incurred by the IPICOL amounting to Rs. 1,30,01,039/ - with the Official Liquidator for distribution as per the provisions of Section 529(A) of the Companies Act, 1956. On 5.9.2003 the Court directed that the said amount of Rs. 1,30,01,039/ - will be deposited by a Bank Draft in the name of the Official Liquidator, Orissa High Court, Cuttack in the account of the Company and the amount will be kept in fixed deposit bearing maximum interest by the Official Liquidator. Pursuant to the said Order dated 5.9.2003, the amount of Rs. 1,30,01,039/ -has been deposited with the Official Liquidator and the said amount has been kept in fixed deposit in the account of the Company.