PERFECT THREAT MILLS LTD. Vs. NONE

JUDGEMENT

(1.) IT will be just and proper to recapitulate the facts relating to the present prayer made by the defaulter company -M/s Perfect Threat Mills Limited by way of 10th additional affidavit submitted in Company Application No. 3/2006 in Company Petition No. 2/2004.

(2.) THE scheme for rehabilitation of defaulter company M/s Perfect Threat Mills Limited was sanctioned by the AAIFR vide order dated 11.9.1997. Its progress in implementation of the scheme was reviewed in hearing held on 5.7.1999. After hearing the submissions, the bench concerned came to the conclusion that the scheme sanctioned by the AAIFR had failed primarily because of the non -fulfillment of the basic commitments made in the sanctioned scheme by the Company/its promoters. As such, after forming a prima facie opinion under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, to wind up the Company, a show cause notice was issued on 14.7.1999 calling for the objections/suggestions or alternate proposals from the interested parties . The responses were received and BIFR took for consideration the matter and after hearing the concerned parties, vide order dated 28.9.1999 confirmed its earlier prima facie opinion that it would be just, equitable and in public interest if the sick company M/s Perfect Thread Mills Limited be wind up under Section 20(1) of the Companies Act. Consequently, the matter was referred to this Court vide order dated 28.9.1999, upon which Company Petition No. 5/2000 was registered. During pendency of Company Petition No. 5/2000, company submitted Company Application No. 9/2003 for direction of court for holding meeting of secured creditors of the applicant Company for approval of ''scheme of compromise and arrangement '' proposed. In said company application, another application being Company Application No. 2/2004 was submitted, stating therein the reason for non -implementation of sanctioned scheme and explanations thereto were submitted by the Company and Company submitted that before Company Petition No. 2/2004, the Company has preferred application being Application No. 9/2003 wherein it has prayed that meeting of the secured creditors of the petitioner - Company be held and convened for the purpose of considering and if thought fit, approving with or without modification, the compromise and arrangement, embodied with in the proposed scheme of compromise and arrangement. The said application No. 9/2003 was allowed by this Court vide order dated 7.10.2003. The High Court directed that the meeting of the secured creditors of the applicant Company be held on Friday, the 28th November, 2003. The Chairman of the meeting was appointed by order of the High Court and the meeting was duly held and convened. The matters were considered. Seven representatives of secured creditors of the Company attended the meeting and ultimately, the scheme of the compromise of arrangement was submitted before this Court. After hearing the parties, this Court in its order dated 19.4.2004 held that there are no grounds or circumstances to refuse to grant approval for the scheme submitted before the court and this Court also held that the requirements of the provisions of Section 291 of the Companies Act, 1956 are satisfied and there appears to be cogent grounds for accepting the scheme, which is proposed. The scheme is genuine and bonafide and in the interest of the creditors of the petitioner Company. Consequently, the Company Petition No. 2./2004 was disposed of by allowing Company Application No. 9/2003 and this Court approved the arrangement on the terms and conditions and in the manner as stated in the scheme of arrangement and compromise, as modified at Annexure -F to the Company Petition. The reliefs in terms of paragraph 15(a) and (b) in Company Petition No. 2/2004 were granted. The modified scheme (Annexure -F) to the petition was made part of order of the High Court dated 19.4.2004.

(3.) AS per the said sanctioned scheme, the Company was required to make payment of One Time Settlement (OTS) of all dues amount payable as per the schedule thereto after adjusting 50% of the OTS of dues amount paid to each secured creditor together with interest @ 11.5% per annum with effect from 1.8.2002 within 30 days of the day of sanction of the scheme. The Company submitted in total nine affidavits before this last 10th affidavit to show that there were legitimate reason for not clearing of the dues of the creditors in given time and lastly submitted that some land of the Company has been given under acquisition proceedings because of the construction of National Highway by the National Highway Authorities of India and, therefore, the Company is likely to get substantial amount, which will be paid against various dues of the creditors. The defaulter Company submitted about what efforts they made for securing and getting the payment from the Central Government on account of the acquisition of their land.