RASILA BHUPENDRA SHAH Vs. INDIAN CHARGE CHROME LIMITED

JUDGEMENT

(1.) LETTERS Patent Appeal No. 40 of 2006 has been filed by rasila Bhupendra Shah and Belly Merchandise Ltd. who are the shareholders of Indian Charge Chrome Ltd. (in short 'iccl')and Letters Patent Appeal No. 13 of 2007 has been filed by one Ajit Nain, who is not a shareholder of ICCL but holds shares with his wife in the Banks which advanced funds to mortgaged transferor Company, ICCL, against the common judgment of the learned company Judge dated 13th of October, 2006 passed in Company Petition Nos. 15 and 17 of 2006. However, with the consent of the learned counsel for the parties, the appeals are treated to have been filed under Section 483 of the Companies Act, 1956 (hereinafter referred to as 'act' ). W. P. (C) No. 6889 of 2004 has also been filed by Ajit Nain praying for issuance of writ commanding the opposite parties therein to act in accordance with law and to immediately refer the ICCL to BIFR under the Sick industrial Companies (Special Provisions)Act (in short 'sica') and to direct the opposite parties and their servants and agents not to allow waiver of the amount of loan as proposed in the scheme application and to prohibit the opposite parties and their servants and agents from granting waiver of loan of nearly Rs. 2300 crores to ICCL.

(2.) BOTH the appeals and the writ petition being inter-linked, they were heard together and are being disposed of by this common judgment.

(3.) COMPANY petition No. 15 of 2006 was filed by the Indian Metals and Ferro Alloys Ltd. (in short 'imfa') and Company Petition No. 17 of 2006 was filed by ICCL, the Transferor company under Sections 391 to 394 of the Act, seeking sanction of the scheme of amalgamation, which was annexed as Annexure-A to the petitions with the case that the ICCL was incorporated on 28-12-1982 under the Act with an authorized capital of rs. 90. 00 crores which was divided into nine crores equity shares of Rs. 10/- each with the object of manufacturing Charge Chrome, ferro Chrome, other Chromium products and Ferro Alloys and to carry on business of such manufacturing, processing, importing, exporting and being appointed as agents, stockists, brokers, distributors, buyers, sellers of and dealers in Charge Chrome, ferro Chrome, other Chromium products and Ferro Alloys. The other objects were production/generation of electricity by thermal hydro power or any other process for consumption, sale and distribution thereof and to obtain or to take lease or otherwise acquire chromites and other mines and to carry on mining operation of such minerals in such mines for processing the said extracted minerals for captive use in the company's furnace or for sale and/or export. The other objects mentioned in the Memorandum of association are not necessary to be mentioned. The ICCL suffered huge losses and thus the liability of the Company came to the tune of Rs. 2949. 02 crores as on 31-3-2005 for which several financial institutions approached the Debt Recovery Tribunal for recovery of their respective dues. In view of the circumstances, the ICCL approached the lending financial institutions and banks for settlement of dues by restructuring the debts. The IDBI being the leading institution of the consortium of financial institutions and lenders, agreed to a structured settlement of dues on the terms and conditions mentioned by them in their letter dated 24-7-2006 annexed as Annexure b to Company Petition No. 17 of 2006. Accordingly a scheme of arrangement was prepared by the financial Banks/institutions, which was accepted by all financial institutions and financial banks. Consequently an application was filed before this Court for sanction of the scheme on which the learned company Judge vide his order dated 10-9-2003 directed for holding of the meeting of the secured creditors. Thereafter the requisite majority approved the scheme of arrangement in the meeting and thereafter application under Sections 391 to 394 of the act was filed by ICCL for sanction of the scheme of arrangement. But subsequently the IDBI vide their letter dated 10-10-2005 introduced certain amendments to the conditions of settlement relating to de-rating of equity share capital from 95% to 50% subject to the payment of compensation. Thereafter the comprehensive composite scheme of arrangement and amalgamation was framed and the earlier application was withdrawn, which was the subject matter of the company Petition in hand.