Gujarat High Court
Administrator Of The Specified ... vs Ashima Dyecot Ltd. on 10 November, 2006
Author: A.S. Dave
Bench: A.S. Dave
ORDER A.S. Dave, J.
1. This Misc. Civil Application is filed by the applicants with a prayer to review and recall order dated 27th July 2006 passed by this Court in Company Petition No. 105 of 2006 and to grant an opportunity of hearing to the applicants.
2. It is the case of the applicants that they are successors to Unit Trust of India, a statutory Corporation constituted under Unit Trust of India Act, 1963 since repealed by the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, [for short, 'the Act']. That, by virtue of provisions of Section 4(1)(a)(b) and Section 5(2) of the Act, 'the Administrator of the Specified Undertaking of Unit Trust of India' is vested with all business, assets, liabilities and properties set out in Schedule I to the Act from erstwhile UTI and, on the appointed date, applicant No. 1 became Administrator.
3. It is submitted by the applicants that they have recently come to know that respondent No. 1 - Company moved Company Petition No. 105 of 2006 for sanction of the Scheme of Arrangement and this Court passed order dated 27th July 2006 sanctioning the said scheme. Though the applicants have opposed the scheme of arrangement even in the meeting convened on 27th June 2006, pursuant to order dated 5th May 2006 passed by this Court in Company Application No. 254 of 2006, the said fact was not brought to the notice of this Court. That, the applicants are situated in Mumbai and were not aware about the date of final hearing of the Company Petition and, therefore, the objections of the applicants could not be placed on record before this Court. It is further submitted that there was no due advertisement in the recognized newspapers having vast circulation and, therefore, the applicant could not get an opportunity to present their case before this Court in the said Company Petition.
4. Shri Pranav G. Desai, learned Counsel for the applicants has submitted that the applicants, being debenture holders, ought to have treated as a separate class of secured creditor and, thus, when the amount is outstanding against respondent - Company and the scheme was opposed by the applicants in the meeting, their interest requires adequate protection by recalling order dated 27th July 2006 passed by this Court in Company Petition No. 105 of 2006.
5. Shri S.N. Soparkar, learned Counsel appearing for the respondent - Company has submitted that this application for review is time-barred and, in spite of adequate knowledge about order dated 27th July 2006 passed by this Court in Company Petition No. 105 of 2006, which was brought to the notice of the applicants by various communication addressed to the applicants on 28th August 2006, 5.9.2006, this application is filed belatedly on 3rd November 2006, which is beyond prescribed time limit for filing review, i.e. 30 days from the date of passing of the order and, therefore, this application is required to be dismissed at the threshold. He has opposed the application for review on merit also by contending that it cannot be said that the applicants were not aware about pendency of the proceeding for sanction of the scheme of arrangement floated by respondent - Company before this Court. According to him, the applicants were aware about convening of the meeting on 27th June 2006 pursuant to the order dated 5th May 2006 passed by this Court in Company Application No. 254 of 2006. Not only the objections of the applicants but also communication dated 23rd June 2006 addressed by the applicants were taken note of by the Chairman of the meeting and also by this Court. According to him, out of seven secured lenders, four secured lenders holding value of Rs. 198,59,68,772/- representing 57.14% of number of secured lenders and 92.06% in value present and voting, voted in favour of amendments to the scheme, while three secured lenders holding value of Rs. 17,13,29,474/- representing 42.86% of number of secured lenders and 7.94% in value present and voting, voted against the amendments to the scheme. Thus, there was full compliance by the respondent-company and the statutory majority had approved the scheme. Shri Soparkar has further submitted that, looking to the scheme of Section 391 of the Act, UTI or the Administrator of the Specified Undertaking of the UTI cannot be treated as a separate class. In the present case, in view of a commonality of interest of securing its dues and it was treated on par with other secured creditors by the respondent - Company, no separate treatment is required to be given. Shri S.N. Soparkar, learned Counsel for the respondent - company has relied upon the judgment of the Delhi High Court in the case of SIEL Ltd. In re, reported in [2003] 47 SCL 631 (Delhi, and contended that Section 391 of the Companies Act, 1956 has never envisaged such different treatment to holder of non-convertible debenture. Shri S.N. Soparkar, learned Counsel for the respondent - company has also submitted that no case is made out by the applicants to justify their grievance which may require this Court to invoke power under Section 114 and Order 47, Rule 1, of the Code of Civil Procedure, 1908 and, therefore, this application is required to be rejected.
6. Heard the learned Counsel for the parties.
7. In my view, this application deserves to be rejected on the ground of delay itself as there is no reasonable and satisfactory explanation tendered by the applicants for the delay caused in filing the present Misc. Civil Application.
8. Even on merit, the submission of the applicants that they objected to the scheme of arrangement in the meeting convened on 27th June 2006 by sending communication dated 23rd June 2006 to the Chairman of the meeting, and they were not aware about the date of final hearing of the Company Petition for approval or otherwise of the scheme of arrangement, has no substance. The record reveals that advertisement was published in Indian Express, Jansatta and Loksatta and an affidavit to that effect was also filed. In the present case, as per requirement of Rule 80 of the Companies (Court) Rules, 1959, sufficient publication was given about the date of hearing of the petition. Though the applicants have objected in the meeting convened on 27th June 2006 and being acquainted and aware of the proceedings, remained silent and did not bother to pursue the case further when the matter was to be heard on 27th July 2006. It is also to be noted that even after the order was passed on 27th July 2006, the same was brought to the notice of the applicants by communication dated 28th August 2006 and 5/10.9.2006. Thus, the applicants have remained inactive and non-vigilant leading to only one conclusion that the applicants have abandoned their cause.
9. As regards the submission of the learned Counsel for the applicants to treat the UTI as a separate class, it is to be noted that the UTI was treated on par with other secured lenders. Further, Section 391 of the Companies Act does not envisage such special treatment. Even otherwise, Section 392(1)(a)(b) of the Companies Act, 1956, clearly envisages modification if the scheme approved by the Companies Court failed to adhere to the norms laid down therein and, as and when such occasion arises, the applicants can very well invoke the above provision by filing appropriate proceeding.
10. Recently, this Court, by judgment and order dated 13th October 2006, rendered in Civil Application No. 269 of 2006 in Company Petition No. 11 of 2006 Majoor Mahajan Sangh v. O.L. Of Madhu Textile Limited, while rejecting the application for review, has extensively considered the scope and power of review under Order 47, Rule 1, read with Section 114 of the Code of Civil Procedure, and the law laid down by the Apex Court in . Following the same, in my view, no case is made out by the applicants to entertain the present Misc. Civil Application for review.
11. As a result of foregoing discussion, this application is rejected with no order as to costs.