The Calcutta High Court Thursday refused to stay its order appointing a liquidator for tyre-maker Dunlop India Ltd (DIL) after the company sought an injunction against this.
A bench of justices K.J. Sengupta and J.M. Bagchi also asked the liquidator to act as a “special officer of the court” and prepare an inventory of the company’s assets.
The high court March 26 had ordered the liquidator’s appointment. The company’s creditors, including Madura Coats Ltd, had filed for its winding up, alleging DIL was fraudulently selling its assets to jeopardise their interest in the company.
DIL, in the appeal, contested the validity of the order saying Madura Coats had earlier filed a case for recovery of its loan to the company and hence could not file for liquidation under the Company Law.
Bangalore-headquartered Madura Coats had supplied raw material worth Rs.9 crore to DIL between 1996 and 1998 and had later filed a case for the recovery of the amount. Madura Coats later filed for the winding up of DIL before the Calcutta High Court.
The West Bengal government – a party to the case – also asked for staying the order saying it was desirous of rehabilitating the company, but is unable to formulate a suitable policy because of the order.
After hearing both the parties, the court refused to stay the order till Tuesday when the matter will come up for hearing. It also ordered the liquidator to make an inventory of the company’s assets.
A liquidator is appointed for taking control of all the assets of a company for settling claims against it when a company goes into the winding-up process.
As on March 31, 2011, the company has unsecured loans of about Rs.272 crore and secured loans of about Rs.48 crore.