S DULEEP SINGH Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THIS judgment shall dispose of C. A. No. 123 of 1987 in C. P. No. 125 of 1986, C. P. No. 24 of 1987, C. A. No. 24 of 1987 in C. P. No. 56 of 1982 and C. A. No. 189 of 1987 in C. P. No. 125 of 1986. All these applications and petitions have been filed either for recall or modification of the order dated December 11, 1986, passed by G. C. Mital J. in C. P. No. 125 of 1986. Therefore, I have considered it convenient to dispose of them by one and the same judgment.

(2.) IT is necessary first to notice the facts in brief. Prem Singh and other shareholders of the National Transports and General Co. (P.) Ltd. (B group), Ludhiana (for short "the company"), filed C. P. No. 236 of 1980 under Sections 397 and 398 of the Companies Act, 1956 (for short "the Act"), for relief on the ground that the affairs of the company were being conducted in a manner which is prejudicial to the public interest and the petitioners therein and the company. They complained that the affairs of the company were being mismanaged. During the pendency of the same, C. P. No. 56 of 1982 was filed on July 27, 1982, by Pritam Singh and ten other creditors of the company under Section 433 of the Act for winding up the company on the ground that it is unable to pay its debts to its creditors. C. P. No. 236 of 1980 filed by Prem Singh and other shareholders-petitioners was, however, dismissed as not pressed on February 24, 1983, as their counsel conceded that the same was not maintainable against a group of the company. C. P. No. 56 of 1982, however, culminated in an order of winding up of the company by R. N. Mittal J. (as he then was) vide order dated August 16, 1984. The official liquidator was appointed as liquidator of the company. He was directed to take charge of the company forthwith. The winding-up order was directed to be advertised in newspapers as also in the Punjab Government Gazette. A copy of the order was also directed to be sent to the Registrar of Companies.

(3.) WHEN the proceedings for winding up of the company in pursuance of the order dated August 16, 1984, were still in progress and the official liquidator was having control, C. P. No. 125 of 1986 was filed by Shri Harjinder Singh, ex managing director of the company, under Section 466 of the Act read with rule 116 of the Companies (Court) Rules, 1959 (for short "the Rules"), for stay of the winding up proceedings. He candidly admitted that pending C. P. No. 56 of 1982, he and his associate shareholders could not arrange money in order to pay the creditors of the company to whom the total amount due was Rs. 77,015 besides interest from December 13, 1979. The company had various route permits to ply buses as mentioned in annexure P/1 to cover 1,406 miles per day. These route permits are very important and connect various cities and towns. It was further stated that Shri Harjinder Singh, the petitioner himself, is not in "a very sound financial position. He has, therefore, sought financial help from Shri Duleep Singh, son of Phagan Singh, resident of Chopan, District Mirza-pur (U. P.), who has 30/40 years experience as a transporter. Shri Duleep Singh suffered huge losses as a result of the riots in November, 1984, in U. P. He has, therefore, decided to shift his business to the State of Punjab. He is a very rich person. He has large deposits in the shape of F. D. R. s in different banks and he is prepared to invest Rs, 10,00,000 to 15,00,000 in the business of the company. It was further averred that Sarvshri Amarjit Singh and Karamjit Singh, sons of Shri Ajaib Singh, who were also contributories of the company are prepared to invest a sum of Rs. 5,00,000 in the company. They own a large fleet of trucks and buses. They have got vast experience in the transport business. It was asserted that with the financial help of the aforesaid gentlemen, the amount due to the petitioning creditors in C. P. No. 56 of 1982 can be paid off. There is no other creditor of the company. Shri Harjinder Singh undertook to pay off any legal and valid dues of any creditor. It was, therefore, prayed that the winding up proceedings as regards the company should be stayed for a period of five years so that the business of the company could be resumed and all financial matters settled. The petitioner also undertook to submit a report about the progress of the business of the company to the official liquidator regularly.