MODERN DENIM LTD. Vs. STATE

JUDGEMENT

(1.) MODERN Denim Ltd., (in short 'the petitioner -company') has filed this petition under Section 391 of the Companies Act, 1956 (hereinafter shall be referred to as 'the Act of 1956') for sanctioning the scheme of compromise between the petitioner -company and its secured creditors.

(2.) THE petitioner -company was incorporated as Modern Suitings P. Ltd., in November, 1977, as a part of Modern group of companies. As a part of an exercise to restructure its activity the Modern Suitings Ltd. spun off its suiting division to Modern Syntex (India) Ltd. in April, 1993 under the scheme of arrangement approved by this court. The name of Modern Suitings Ltd., thereafter was changed to the present name, i.e., Modern Denim Ltd. (in short 'MDL').

(3.) THE Regional Director, Ministry of Company Affairs, New Delhi, in the affidavit stated that out of 11 secured creditors who participated in voting, four secured creditors having their debts aggregating to Rs. 43.33 crores voted against the scheme. It is submitted that the Registrar of Companies, Jaipur, intimated to its office regarding receipt of some complaints in respect of non payment of fixed deposits under Section 58A of the Companies Act, which is subject to Company Law Board orders dated December 29, 1997. The petitioner -company failed to submit no objection certificate to the scheme of arrangement from the Jaipur Stock Exchange. The petitioner -company vide its letter dated November 18, 2006, informed that the scheme of compromise is for the secured creditors and not for the shareholders and hence NoC from the Jaipur Stock Exchange was not obtained. The Regional Director in his affidavit also incorporated the auditor's report. In paragraph (v) of the auditor's report, it was stated: