Madhya Pradesh High Court
Raymond Limited vs Steel Tubes Of India Limited on 11 March, 2003
Equivalent citations: III(2003)BC257
Author: A.M. Sapre
Bench: A.M. Sapre
ORDER A.M. Sapre, J.
1. The decision rendered in this company petition shall also govern the disposal of other connected company petitions being Company Petition Nos. 13 of 2000, 21 of 2000, 14 and 30 of 2001 and 15 of 2002, because all these company petitions are filed by the creditors (secured/unsecured) of the respondent-Company under Section 433(e) of the Companies Act involving common question.
2. This is a company petition filed by the petitioner under Section 433(e) of the Companies Act seeking winding-up of the respondent Company--a limited company engaged inter alia in the business of manufacture of tubes. A winding-up is sought essentially on the ground of inability to pay admitted debt amounting to Rs. 3,58,76,265.67 paise. It is the case of petitioner that they supplied in course of their business dealing goods worth Rs. 2,42,87,876.67 paise to respondent on various dates against the orders placed by the respondent company and accordingly invoices were raised on 25.02.1998 to 16.04.1998 by the petitioner on the respondent, it is contended that despite receipt of the goods, and admitting the liability, the respondents did not pay the money arid hence, need to file a company petition arose after serving statutory notice under Section 434 of the Act. As observed supra, there are other company petitions filed by the creditors both secured as well as unsecured against this very respondent Company seeking winding-up of the company on the same ground that inability to pay their admitted debt as contemplated under Section 433(e) of the Act. The details of the debts claimed and doe against the respondent-Company so far as these cases are concerned are as follows:
1. Company Petition No. 13/2000
Rs. 07, 45,61, 389/-
2. Company Petition No. 21/2000 Rs. 13, 12,36,335/-
3. Company Petition No. 15/2002 Rs. 02, 87, 78, 948.42
4. Company Petition No. 30/2001 Rs. 03, 63, 79, 135/-
5. Company Petition No. 14/2001 Rs. 01,98,74,685/-
3. Since, all these petitions are filed against the one company and secondly they are based on one ground namely--inability to pay debts, they are already consolidated for their disposal. Even otherwise, their main object is to seek winding up of the respondent-Company under the Companies Act because according to all of them, the respondent-Company is unable or rather deemed unable to pay any of the aforementioned debt of any of the creditors (petitioners) and like them many others who have not yet filed petition for winding-up but no sooner the advertisement is done, they will lay their claim and hence according to these petitioners, a very strong case of winding-up of the respondent Company is made out,
4. On behalf of the respondent-Company a shelter of Section 22 of SICA is taken. According to respondent, since the reference under Section 15 of SICA is pending before the BIFR being reference case No. 303 of 2003 and hence, the proceedings be either stayed or deferred in these matters.
5. Heard Mr. B.A Chitale, learned Counsel for the petitioner and Mr. Vivek Saran for respondent.
6. It is brought to the notice of this Court that this Court has already directed the BIFR for disposal of the reference case 303 of 2002 in relation to respondent-company within six months. This direction is given by this Court in Writ Petition No. 1945 of 2002 by order dated 20.01.2003.
7. In a situation like the one emerging from the admitted facts mentioned supra, in my considered view, there is no harm or any legal impediment if all these petitioners, who are either secured creditors or unsecured creditors are allowed indulgence to participate in the inquiry which is going on before BIFR under Section 15 of SICA in a pending reference case No. 303 of 2002. Even otherwise, the O.A. which is appointed by BIFR or may be appointed in the reference case would be examining the entire financial scenario of respondent company including the cases of several debts of the creditors which will obviously include the debts of these petitioners. In a situation like the one, allowing indulgence of participation in the inquiry by these petitioners to secure their debts, can neither be regarded as illegal or against the provisions of SICA. Indeed, every creditor has a right to contend in any legal forum against their debtor that their debt be safeguarded. It is then for BIFR to decide as to what extent and in what manner the participation of these creditors-petitioners can be allowed in the inquiry which is going on under Section 15 of SICA in the case of respondent-Company.
8. Submission of learned Counsel for the petitioner was that firstly in the absence of any provision under the SICA, the company Court exercising the jurisdiction under the Companies Act may not be able to allow the petitioner to participate in the inquiry. I do not agree to this submission. When the matter relates to winding up of a company which is also subject-matter of Section 15 of SICA then this Court can always safeguard the interest of creditor and pass appropriate directions. As observed supra, there is neither any prohibition, nor any embargo in granting such indulgence which could be pointed out to me either under Companies Act or SICA.
9. Learned Counsel for the petitioner then submitted that if the reference is eventually dismissed by the BIFR under SICA then in that event, the petitioner's right to prosecute this company petition would be taken away. I do not agree. This Court expressly reserve this right of the petitioner to file winding-up petition against the respondent company on this very cause of action in the event of such eventuality arising in future inter alia for the reason that the petitioners have already approached to this Court at a proper time in filing these petitions. It is, however, an eventuality which may arise or may not arise. In the event of company being declared sick company and directing its rehabilitation or winding-up, this occasion may not arise. In either case, this Court expressly grant liberty to these petitioners to file/renew their petitions under Section 433 of the Companies Act on the same cause of action against the respondent Company in the event of the reference being rejected. It is at that time, this Court may examine the issue in the context of the requirement of Section 433/434 of the Companies Act on merits, as to whether any case for winding-up of the respondent-Company qua these creditors (petitioners) is made out or not and if so, what orders can be passed keeping in view the provisions of the Companies Act and after hearing the respondent on facts. This inquiry this Court cannot at this stage go into it due to restraint put by Section 22 ibid.
10. Section 22 of SICA prohibits this Court from going ahead with the petition for winding-up. It does not in any manner restrict the power of this Court to dispose of the petition by giving certain directions or make observations to be taken note of by BIFR who has seized of the reference case. Moreover, Section 15 of SICA empowers the BIFR to hold an inquiry as it deems fit proper in relation to company in question. In such situation, if this Court has allowed indulgence of participation in the inquiry proceedings before BIFR, it will not in any way violate the mandate of Section 22 ibid.
11. Accordingly and in view of aforesaid discussion, these petitions are disposed of by making aforementioned observations and liberty granted to the petitioners. The petitioners of these company petitions will be free to participate in the inquiry proceedings before BIFR in the reference case No. 303 of 2002 in support of their debts. The BIFR will ensure disposal of the reference case No. 303 of 2002 in relation to respondent-Company expeditiously and as already directed in accordance with law within the time already fixed. The Registry of this Court is directed to send the copy of this order to BIFR for their information.
No costs.