Sundri Apparels (India) Pvt. Ltd. v. Kotak Mahindra Bank Ltd.

1. It is submitted by learned counsel for the appellants today that the appellant is not in a position to bear the expenses incurred by the Official Liquidator in liquidation including those incurred in the provision of security and on valuation in respect of the property of the company which had been taken over by the Official Liquidator.

2. Pursuant to winding up proceedings initiated by the Kotak Mahindra Bank Ltd., the learned Single Judge passed an order dated 24th October, 2013 in Co.Pet. No.225/2011 appointing the Official Liquidator attached to the Company Court as the provisional liquidator of the company with directions to take over all assets, books of accounts and records of the appellant company and to effect 2015:DHC:9835-DB publication of the matter in terms of Rule 24 of the Companies (Court) Rules, 1959. This order was the subject matter of the appeal before us.

3. The order dated 24th October, 2013 has been assailed by way of the present appeal. In these proceedings, on 19th February, 2014, a statement was made by counsel for the parties that all disputes and differences between the parties stood resolved and that the respondents had agreed to receive a sum of Rs.20 lakhs in full and final settlement of all claims. In view of this settlement, by the order passed on 19th February, 2014, this court had directed that the factory premises of the appellant shall be de-sealed by the Official Liquidator appointed as provisional liquidator, at the earliest and not later than two days from that day. The appeal and applications were disposed of in terms.

4. It is noteworthy that on 19th February, 2014, this court had directed that if the appellant does not make payment of the amount by the agreed date i.e. 29th September, 2014, the respondent was entitled to have the company petition revived by the learned Single Judge.

5. The matter has been listed before us now for consideration of CM No. 3299/2014 filed by the appellant and CM No.3668/2014 filed by the Official Liquidator for directions regarding payment of the sum of approximately Rs.[4] lakhs which were the cost incurred by the Official Liquidator in undertaking the liquidation proceedings. We are informed by Mr. Rajiv Bahl, learned standing counsel for the Official Liquidator that these costs have increased today to Rs.4,74,055/-.

6. Learned counsel for the appellant has submitted today that the appellant was unable to pay the agreed amounts to the respondent in terms of the order dated 19th February, 2014 and that its directors do not have the capacity to make any payment to the Official Liquidator.

7. Apart from the liability to the Kotak Mahindra Bank, we are informed that the appellant had also taken financial facilities from the Punjab National Bank. While Kotak Mahindra Bank-respondent herein initiated proceedings before the Debt Recovery Tribunal vide OA 106/2011, Punjab National Bank went on to proceed under the SARFAESI Act against the appellant company for the reason that its properties stood mortgaged with it. We are informed by learned counsel for the appellant that the Punjab National Bank has since taken over the property of the company and is in the process of auctioning the same.

8. In this view of the matter, the consequences for non-payment as directed in the order dated 19th February, 2014 have to follow.

9. The above narration of facts would show that the challenge to the order dated 24th October, 2013 in Co.Pet.No. 225/2011 by way of the present appeal is clearly misconceived and devoid of factual and legal merit. In view of the above, we direct as follows:-

(i) The present appeal is dismissed.

(ii) C.P.No. 225/2011 shall stand revived and the payment to the

Official Liquidator appointed as provisional liquidator of the company in terms of the order dated 24th October, 2013 shall stand restored. The Company Petition shall be listed before the learned Company Judge on 15th December, 2015.

(iii) The parties thereto are duly represented herein and stand apprised of the order. The parties shall appear before the Company Judge on the date of hearing hereby appointed.

(iv) This appeal and application are dismissed.

GITA MITTAL, J I.S.MEHTA, J DECEMBER 02, 2015 kr