The Calcutta high court on Monday appointed a provisional liquidator to take charge of the assets of Dunlop India Ltd (DIL).
This effectively means that chairman Pawan Ruia or the company’s board of directors won’t be allowed to transfer property from the company till the court hears out the dozen-odd winding up petitions pending against DIL. Hearing of these petitions will start from Tuesday . Though a plea by DIL for a stay on this interim order was turned down by Justice Sanjib Banerjee, the company indicated later that it would go on appeal.
The official liquidator of the high court will act as the provisional liquidator in this case, Justice Banerjee ordered.
The provisional liquidator will not only be in charge of existing assets but also try and get back those that were transferred by DIL if such transfers are found to be fraudulent in nature. In 2000-2001 , Madura Coats Ltd (MCL) supplied some goods to DIL.
Adispute arose over the payment after which MCL filed a civil suit against DIL. In 2009, MCL filed a winding-up petition against DIL, claiming that the latter owed the company Rs 2 crore. The matter was admitted by the high court. In 2012, MCL filed another petition before the court, seeking the appointment of a provisional liquidator as DIL. The petitioner alleged that unless a liquidator is appointed, during the hearing of the winding-up petition, DIL will sell off its assets to avoid paying off dues.
The petition was challenged by DIL and submitted to the court that the sum mentioned by MCL is disputed. It was pointed out by DIL that a civil suit has already been filed by MCL and the court should wait for the outcome of that matter. It was also stated by DIL’s counsel that the company came out of the Board of Industrial and Financial Reconstruction (BIFR) after its net worth turned positive. This reveals that the company is making a financial turnaround and there is no need for creditors to lose confidence on DIL, the lawyers contended.
Advocate general Anindya Mitra also appeared in the matter and submitted that if DIL wants to revive, the state is ready to provide all assistance for the sake of generation of employment.. Counsel for MCL, however, insisted that no transfer of assets should be allowed from the company till the matter is finally settled.