IN THE MATTER OF RAJASTHAN AGRO INDUSTRIES CORPORATION LED., THROUGH ITS MANAGING DIRECTOR HAVING ITS REGISTERED OFFICE AT B Vs. ABC

JUDGEMENT

(1.) The petitioner Company, namely; Rajasthan State Agro Industries Corporation Ltd., (hereinafter referred to as the company) is a Government Company within the meaning of Sec. 617 of the Companies Act. This petition for winding up is by the Company itself on the ground set out in clauses (a), (e) and (f) of S. 433 of the Companies Act, i.e. on the footing that:

(2.) For deciding whether the Company may be ordered to be wound up and also to resolve the controversies raised in the petition, it is necessary to set out the factual background relating to the Company and the circumstances leading to this petition, which are thus:

(3.) On 20.8.1996 this Court ordered winding up petition to be advertised in newspapers 'Rajasthan Patrika' (Jaipur Edition), and Indian Express (English) Delhi Edition fixing the date of hearing. Pursuant to that Krishi Udyog Nigam Karamchari Union Rajasthan, Rajasthan Agro Employees Union and some employees of the Company have intervened and filed application for being impleaded as parties. They also filed objections in opposition to the winding up. They disputed that the Company was running in losses. According to them. the Profit and Loss Accounts and the Balance-Sheets of the Company did not disclose a true and correct picture of financial position of the Company. In any case, according to them, the losses incurred by the Company were due to mis-management and huge establishment expenses incurred by the Company, Shri Paras Kuhad and Shri Suresh Kashyap, learned counsel appearing for the unions and employees, contended in this connection that the Company has a large piece of land which can fetch good amount if sold to improve financial condition of the Company. They submitted that the State Government is owner of the Company having 99.8% share holdings and also the principal creditor. The Company being of vital importance as it manufactures agricultural implements and goods of alike nature, as such, even the Company is running in loss, the State Government professing to be a welfare State, should not be allowed to wind up the Company. The winding up of the Company shall not be in national interest or in the interest of the farmers, workmen and employees of the Company. Other objections relate to non- maintainability of the winding up petition under the Companies Act on account of over-riding effect of the provisions of I.D. Act in general and Sec. 25-(o) in particular and also for the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (shortly called ' the Act of 1985') in relation to a sick industrial Company, According to learned counsel the I.D. Act and the Act of 1985 are special and beneficial piece of legislation and they should be given full effect rather to allow their breach.