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Gujarat High Court
Appearance : vs 4 Today on 29 January, 2010
Author: K.A.Puj,&Nbsp;
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COMP/36/2004	 1/ 8	JUDGMENT 
 
 

	

 

IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
 

 


 

COMPANY
PETITION No. 36 of 2004
 

With
 

O.J.
CIVIL APPLICATION NO.218 OF 2009
 

In
 

COMPANY
PETITION No. 36 Of 2004
 

With
 

OFFICIAL
LIQUIDATOR  REPORT NO.111 Of  2009
 

In
 

COMPANY
PETITION No. 36 Of  2004
 

 


 

For
Approval and Signature:  
 
HONOURABLE
MR.JUSTICE K.A.PUJ  
======================================

1

Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES

2

To
be referred to the Reporter or not ?No

3

Whether
their Lordships wish to see the fair copy of the judgment ? No

4

Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder? No

5

Whether
it is to be circulated to the civil judge?No

======================================

ALTA
LEASING & FINANCE LTD.

Versus

VAJRA
BEARINGS LTD.

======================================

Appearance :

MR
ZUBIN F BHARDA for Petitioner
MR VISHWAS K SHAH for Respondent
Company

MR.K.M.

PARIKH for Bank

MR.

J.S. JADAV for O.L.

======================================

CORAM
:

HONOURABLE
MR.JUSTICE K.A.PUJ

Date
: 29/01/2010

ORAL
COMMON JUDGMENT

1 Heard
Mr. Zubin F. Bharda, learned Advocate, for the petitioner, Mr.
Vishwas K. Shah, learned Advocate for the respondent Company,
Mr. K.M. Parikh, learned Advocate, for the Anyonya Cooperative Bank
Limited and Mr. J.S. Yadav, learned Advocate for the Official
Liquidator.

2 The
petitioner has filed this petition for winding up of the respondent
Company for its failure to discharge its liabilities. The petition
was Admitted on 11.08.2004 and order of advertisement was passed on
the same day. The said order was complied with and advertisement was
published in two newspapers. Pursuant to the said advertisement,
Affidavit of claim was lodged on behalf of Anyonya Cooperative
Bank Limited on 09.09.2004. This Court, thereafter, has passed a
detailed Order on 11.05.2009, appointing the Official Liquidator as
Provisional Liquidator and directing the Managing Director of the
respondent company to file a Statement of Affairs and to give all
necessary details with regard to the properties of the Company and
also the machineries which are lying at Rajkot. The Official
Liquidator was also directed to file his Report before the Court.
It was also made clear in the said order that during the pendency of
this petition, the respondent company was restrained from
transferring any of its assets and since the Bank has taken the
possession, if the said Bank intends to transfer and/or sell the
assets of the respondent company, the same should be done in
consonance with the Official Liquidator and all necessary details
relating to such a transaction shall be placed before this Court.

3 Before
the winding up order is passed, an objection was raised by the
respondent company that the Reference is pending before the BIFR
and, hence, this Court should not proceed with the winding up
proceedings. It is further pointed out on behalf of the Anyonya
Cooperative Bank Limited that the proceedings were initiated under
Section-13(4) of the SARFAESI Act and constructive possession of the
property of the Company was taken away by the Bank. The proceedings
before the BIFR, therefore, stand abated. This proposition canvassed
on behalf of the Bank was objected to by the Respondent Company on
the grounds that before the proceedings under the SARFAESI Act have
been initiated against the respondent company, the company has been
declared as sick industrial company, by an order of the BIFR on
14.11.2006 and, hence, the proceedings under the SICA are not at
the stage of Reference. In support of this contention, reliance
is placed on the decision of the Orissa High Court in the case of
NOBLE AQUA PVT LTD & ORS vs. STATE BANK OF INDIA &
ORS., reported in AIR 2008 Orissa 103. This
court, therefore, vide its Order dated 18.12.2009 has observed
that though the judgment of the Orissa High Court is not binding
on this Court, since the identical issue was pending before the
Coordinate Bench of this Court, the matter should be adjourned
for some time.

4 Today,
it has been pointed out that this Court (Coram: Anant S. Dave, J.)
has decided Special Civil Application No. 8015 of 2009 on 11.01.2010
and it has been observed therein that this Court is in agreement
with the view and reasonings and grounds canvassed by the High
Court of Delhi, High Court of Punjab, High Court of Mumbai, High
Court of Madras and High Court of Kerala, with regard to
applicability of Third proviso to Section 15(1) SICA as amended by
Act 54 of 2002, vis-a-vis, action taken under Section-13(4) of
SARFAESI Act, 2002. It is further observed that this Court is in
agreement with the decision given by the above High Courts (supra)
with regard to interpretation to Third proviso to Section 15(1) of
SICA, 1985 as introduced by Act 54 of 2002 and Section 41 and
Schedule to SARFAESI, Act 2002 and other provisions of Sections 35,
37 etc also of SARFAESI Act, 2002 and, therefore, contention of
learned Advocate for the petitioner that it is incumbent upon
respondent Bank to obtain permission under Section 22 of SICA, 1985
fails. The Court further held that `Reference’ under Chapter-III
of SICA is a genus and inquiry under Section-16, orders under
Section-17 and measures for revival and rehabilitation of sick
industrial company under Sections 18 and 19 of the Act are species
and, therefore, though order under Section 17(1), (2) or (3) of the
Act, as the case may be, is passed, Reference under Chapter-III of
the Act continues to hold the field and remains pending, but
once a measure under Section 13(4) of SARFEASI Act, 2002, is taken
by virtue of insertion of unnumbered Third proviso to Section 15(1)
by Act 54 of 2002, Reference stands abated and, therefore, no
permission under Section 22 of SICA, 1985 is necessary.

5 In
view of the above decision, with which, even this Court holds the
same view, prior to the said decision, the proceedings before the
BIFR stand abated and this would enable the Court to pass the
final winding up order in the present petition. It is necessary to
mention here that after the admission of the petition as well as
after the appointment of Official Liquidator as Provisional
Liquidator, an application is filed on behalf of the petitioner to
withdraw the present petition. The Court, however, has not permitted
the petitioner to withdraw the said petition as once the petition
is admitted and the Provisional Liquidator is appointed, it is not
open for the petitioner to withdraw the said petition. Even the
Bank has lodged its claim before the Official Liquidator and hence
the Bank entered into the shoe of the petitioner to pursue the said
proceedings and, hence, the petitioner’s request to withdraw the
petition is hereby rejected.

6 It
is also necessary to observe here that though the petition is
filed in 2004, till this date, no affidavit-in-reply is filed. The
averments made by the petitioner as well as by the Bank were not
denied. The dues of the petitioner and the Bank are, therefore,
conclusively proved. The Court has given detailed reasonings at
the time of passing the interim order appointing Official Liquidator
as Provisional Liquidator and, hence, considering the said
reasonings as well as all subsequent developments that have taken
place during the pendency of the present petition, the Court of
the view that, this is a fit case to pass the winding up Order.
Accordingly, the respondent company is hereby ordered to be
wound up and the Provisional Liquidator is now permitted to act as
Official Liquidator of the company. He is also permitted to enter
into the shoe of the company in all proceedings which are filed
by or against the company. Earlier also, directions are given to
the Managing Director of the company to give the details regarding
the machineries which have been transferred to Rajkot. It is the
grievance ventilated on behalf of the Official Liquidator that
such directions were also not complied with. Even the statement of
affairs is also not truly and fully filed by the Managing Director
of the Company. The Official Liquidator is, therefore, directed
to pursue the said aspect and take appropriate action including
filing of criminal complaint for seeking necessary compliance
against the Director of the Company. The Anyonya Cooperative Bank
Limited is also directed to associate with the Official Liquidator
in connection with sale transaction that may be undertaken by the
Bank.

7 With
these directions and observations, this petition is accordingly
disposed of. Petition stands allowed.

8 Since
the company is ordered to be wound up and the petition is disposed
of, O.J. Civil Application No. 218 of 2009 no long survives and
it is accordingly disposed of.

9 So
far as Official Liquidator Report No. 111 of 2009 is concerned, the
same was filed by the Official Liquidator pursuant to the Order
passed by this Court appointing the Official Liquidator as
Provisional Liquidator. Now the Provisional Liquidator is directed to
act as Official Liquidator and hence is directed to file a fresh
O.L. Report taking into consideration the subsequent developments.

10 With
these directions, all three matters i.e. winding up petition,
Company Application as well as the O.L. Report are accordingly
disposed of.

(K.

A. PUJ, J.)

pnnair

   

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