M M SEHGAL Vs. SEHGAL PAPERS LTD

JUDGEMENT

(1.) MESSRS Sehgal Papers (for short, " the company "), a public limited company, was ordered to be wound up, vide orders dated April 8, 1983, in C. P. No. 64 of 1981 and the official liquidator was directed to take over and manage the affairs of the company. About six months thereafter on September 15, 1983, M. M. Sehgal, former chairman of the board of directors of the company, moved Company Petition No. 97 of 1983 under Sections 391, 392 and 394 of the Companies Act, 1956, for a direction to hold a meeting of the various creditors and shareholders to consider the arrangement detailed in the petition itself. The learned company judge, vide orders dated September 27, 1983, appointed Shri B. R. Tuli to act as chairman to hold the meeting who after doing the needful forwarded four reports to this court of the meeting of the secured creditors, preferred creditors, unsecured creditors and all the shareholders held separately on the same date, i. e. , December 7, 1983. The scheme was approved by all others except the secured creditors who rejected the same. In spite of the rejection of the scheme by the secured creditors, the petitioner moved this application under Rule 79 of the Companies (Court) Rules, 1959 (hereinafter referred to as " the Rules"), for its sanction. A notice was ordered to be issued to the Union of India and a citation published in the newspapers inviting objections. Only Industrial Finance Corporation of India filed objections within the prescribed period. Thereafter, the Industrial Credit and Investment Corporation of India moved two applications, C. A. Nos. 36 and 37 of 1984, for condonation of delay and for permission to place on record its objections to the proposed scheme. Similarly, the Life Insurance Corporation of India, Punjab National Bank, State Bank of Patiala, Industrial Development Bank of India, Smt. Janak Kapur and the official liquidator also moved Company Applications Nos. 27, 46, 50, 51, 53 and 151 of 1984 for permission to file objections to the said scheme. All these applications were ordered to be heard with the main application. As no objection was raised to oppose them at the final hearing, all these applications were allowed and the objection petitions ordered to be placed on the record.

(2.) A rejoinder was filed by M. M. Sehgal to the objection petition filed by the Industrial Finance Corporation of India which necessitated the filing of Company Application No. 168 of 1984 by the Industrial Finance Corporation of India. There being no opposition, this application too was allowed. M. M. Sehgal also moved Company Application No. 10 of 1984 for a direction to the official liquidator to take over the charge. With the disposal of the main application, this application would become infructuous and is ordered to be dismissed accordingly. Still another application, C. A. No. 186 of 1984, was filed by M. M. Sehgal for permission to lead evidence which shall also be disposed of by this order.

(3.) MR. Gosh, learned counsel for respondent No. 1, raised a preliminary objection that the company being in liquidation, an application under Section 391 of the Companies Act for holding a meeting to consider the proposed compromise or arrangement would be competent only by the official liquidator. In support of his contention, he relied on the following observations of the Supreme Court in S. K. Gupta v. K. P. Jain [1979] 49 Comp Cas 342 (p. 350, 351) :