ALTOS INDIA LIMITED Vs. BHARTI TELECOM LIMITED

JUDGEMENT

(1.) This is an appeal against the order, dated 26 November, 1998, passed in C. P. No. 196 of 1997. By the impugned order, the assets of the appellant-company were ordered to be sold by the methodology suggested in the impugned order itself. This appeal was filed on 6. 1. 1999. Two-fold submissions have been made to assail the impugned order - (i) that the learned Company Judge could not order the sale of the assets of the appellant-company before actually passing an order winding-up of the company in accordance with laws; and (ii) that despite the orders dated 3. 8. 1998 [since reported as Bharti Telecom Ltd. v. Altos India Ltd. (1999) 4 Comp LJ 283 (P&h)] and 10. 11. 1998, and thereafter, another order passed on 26. 11. 1998, the copies of the accounts of the company have not been supplied to the appellants which has deprived them to move BIFR.

(2.) So far as the first submission of the learned counsel for the appellants is concerned, it maybe observed here that the learned Company Judge was not oblivious of the fact that he was ordering the sale of the assets of the company prior to the passing of the order winding-up of the company. Similar argument was raised before the learned Company Judge by the appellants, and it was dealt with in the following manner : "in the circumstances afore-stated in order to protect the interest of all concerned and without winding up the company at this stage and to implement the order of the court, dated 3. 8. 1998 [since reported as Bharti Telecom Ltd. v. Altos India Ltd. (1999) 4 Comp LJ 283 (P&h)] which has become final, the sale of the unit at this stage has become inevitable. Learned counsel appearing for the respondent company submitted that it will be appropriate for this court to sell the unit only after the company has been actually wound up. Firstly, I am of the considered view that this is not the correct perspective of law. It is more an imaginary situation because there is hardly any difference between the present status of the company and would be status of the company, once it has been actually wound up. The official liquidator attached to this court is already working as provisional liquidator of this company. This unit heavily owes financial liability to various financial institutions which are dealing in public money. Thus it is more important that a method of sale is adopted at this stage, i. e. , the manner which would fetch maximum benefit to all concerned and would help the respondent company to reduce its liability to the maximum extent. It is a settled principle of law that secured creditors cannot [sic] stand outside the winding up petition and it would be the exception to the rule that they are governed by the proceedings in the winding up petition. "

(3.) We concur with the reasoning given by the learned Company Judge to order sale of the assets of the company. Apart from the above, we find that the learned Company Judge had given ample opportunities to the appellant-company to show its bona fides that they were in a position to pay-off the liabilities. The impugned order was passed on 26. 11. 1998. The High Court closed for winter vacation with effect from 25. 12. 1998 and re-opened on 6. 1. 1999. As observed above, the appeal was filed on 6. 1. 1999. The appellants allowed the impugned order to be implemented all this time and we are told that some tenders have been received by the provisional liquidator pursuant to the advertisement which was issued in accordance with the impugned judgment. Consequently, we find no merit in the first submission of the learned counsel for the appellant.