1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi COMPANY APPLICATION NO.1294 OF 2007 IN COMPANY PETITION NO.642 OF 1983. Venkatashwar Somani. .. Applicant/Org. Petitioner. vs. The Official Liquidator of Shree Niwas Cotton Mills Ltd. .. Respondents. WITH COMPANY APPLICATION (L) NO.801OF 2009 IN COMPANY APPLICATION NO.1294 OF 2007 IN COMPANY PETITION NO.642 OF 1983. Reliance Textile Industries Ltd. ..Org. Petitioners. vs. Shreenivas Cotton Mills Ltd. ..Org. Respondents. And Ventakeshwar Somani. ..Applicant. Vs. The Official Liquidator & Ors. ..Respondents. And Yeshwant Rama Pawar & Ors. ..Applicants/Intervenors. 2 WITH COMPANY APPLICATION NO._____ OF 2009 IN COMPANY APPLICATION NO.1294 OF 2007 IN COMPANY PETITION NO.642 OF 1983. Reliance Textile Industries Ltd. ..Org. Petitioners. vs. Shreenivas Cotton Mills Ltd. ..Org. Respondents. And Ventakeshwar Somani. ..Applicant. Vs. The Official Liquidator & Ors. ..Respondents. And Arjun Rajpat Singh & Ors. ..Applicants/Intervenors. .... Mr. Janak Dwarkadas, Senior Counsel, a/w. Mr. Cyrus Ardheshir, a/w. Mr. Rahul Dwarkadas, a/w. Mr. Neveiue Mukerjee, i/b. Wadia Gandhy & Co., for Applicant, in C.A. No.1294/2007. Ms. Jane Cox, for Applicants, in C.A.(L) No.801/2009. Mr. G.C. Singh, for Applicants, in C.A. No.___/2009. Mr. S.M. Dharap, for Action Committee. Mr. V.P. Sawant, for Official Liquidator. Official Liquidator, present. Mr. M.P.S. Rao, a/w. Mr. Mayur Shetty, a/w. Mr. Dipankar Das, i/b. M.V. Kini & Co., for S.B.I. (Secured Creditors). Mr. S.K. Talsania, Senior Counsel, i/b. Y.M. Pendse, for Applicants in C.A. Nos.571/2008, 1256/2008, 1578/2008 & C.A. (L) No.727/2009. .... 3 CORAM : S.J.KATHAWALLA, J. DATE : 3RD AUGUST 2009. P.C. In the above company application (lodging) no.801 of 2009 and the un-numbered application taken out by the applicant’s Advocate Mr. G.C. Singh, Mr. Dwarkadas, the learned Senior Counsel has made the following statement :- “(1) All workmen employed with the company as on the date of closure viz. 25.7.1984, shall receive : (a) All legal/statutory dues including unpaid wages, gratuity, retrenchment compensation, etc. upto date of closure. (b) Interest @ 12% p.a. from 25.7.1984 to 30.5.2009. (c) Ex-gratia compensation of Rs. 2,00,000/- per worker. This includes all workers of any dispensation who were with the company as on the date of closure. (2) For any workers who were not employed with the company as on the date of closure, they will be free to lodge their claims for all legal/ statutory 4 dues and the Official Liquidator shall adjudicate their status as on the date of winding up and pay the pending dues, if any. In the event of it being established that any workmen whose name does not appear as a workmen on the rolls of the company as on 25.7.1984, that his services were not terminated between 1981-1984, such workmen will be considered eligible to receive benefits as per the revival proposal. This includes workmen of any dispensation.” It is clarified that the statement made by Mr. Dwarkadas is without prejudice to the contention of the applicant as well as the representative Union that except for the representative Union no other Union or individual worker/s is entitled to file the aforesaid applications for reliefs sought therein. 2. In view of the above statement, made by Mr. Dwarkadas, the learned Senior Counsel on behalf of the applicant, Ms. Jane Cox, learned Advocate for the applicant in company application (lodging) 5 no.801 of 2009 and Mr. G.C. Singh, learned Advocate for the applicant in the un-numbered application informs the Court that the applicants are not pressing their respective company applications and they have no objection if the company application no.1294 of 2007 is allowed. 3. Mr. Dwarkadas, learned Senior Counsel appearing for the applicant in company application no.1294 of 2007 tenders minutes of the order which are taken on record and marked ‘X’ for identification. Mr. Dwarkadas has submitted that the company application no.1294 of 2007 be disposed of in terms of the minutes of the order to which Ms. Jane Cox and Mr. G.C. Singh, learned Advocates appearing for the applicants have no objection. 4. Mr. Rao, learned Advocate appearing for the State Bank of India has reiterated his objections which were earlier canvassed by him before this Court [Coram : A.M. Khanwilkar, J.] and which are already dealt with by this Court by its orders dated 14 th May 2009 and 24 th June 2009. 6 5. M/s. Shreenivas Cotton Mills (Mill) had earlier taken a loan of about Rs. 3 crores from the State Bank of India and by way of a second charge had mortgaged their immovable properties (land on which the Mills were situated) to the State Bank of India. A decree dated 26 th March 2003 was passed by the Debt Recovery Tribunal in favour of the State Bank of India and against the said Mill (in liquidation) for Rs. 9,82,00,000/- with interest thereon at the rate of 12% per annum, until payment and/or realisation. The Appellate Tribunal by its order dated 8 th June 2007 dismissed the appeal filed by the State Bank of India. The State Bank of India thereafter filed a writ petition before this Court being writ petition no.6073 of 2007 impugning the orders of the Debt Recovery Tribunal and the Appellate Tribunal. It is the case of the State Bank of India that an amount of approximately Rs.600 crores is due and payable by the said Mill to the Bank. As recorded in paragraph 14 of the order of this Court dated 14 th May 2009 the entire decreetal amount has been paid by the applicant to the State Bank of India. However, the 7 payment made by the applicant to the State Bank of India is without prejudice to the further claim of the said Bank towards interest component which matter is still subjudice. The second charge in respect of the immovable properties of the said Mill continues in favour of the State Bank of India. By an undertaking dated 20 th May 2009 executed by the applicant and filed in this Court, the applicant has undertaken to this Court to abide by the directions which may be given in appropriate proceedings regarding further alleged claim of State Bank of India towards interest component and would deposit such amount as may be ordered within such time as may be fixed by this Court in that behalf, subject to the applicants rights and remedy as available under the law including the right to Appeal. Therefore, in my view, the claim of the State Bank of India is fully protected and the objections raised by the Bank lacks bonafides. When this Court pointed out to Mr. Rao, the learned Advocate for State Bank of India that the Bank was fully protected and what further protection was expected by the Bank, Mr. Rao contended that in the event of the 8 revival of the Mill, the Mill will be employing new workmen and consequently on the land mortgaged to the Bank, further rights will be created. This contention of Mr. Rao deserves to be forthwith rejected because even when the charge was initially created in favour of the State Bank of India in 1982, the Mill was operational with approximately 5000 to 7000 workmen. The State Bank of India now cannot be heard to say that since certain workers will be working on the Mill lands consequent to its revival, the same will prejudice the rights if any, of the State Bank of India. This contention of the Bank also lacks bonafides and is therefore rejected. 6. As recorded in the order passed by this Court dated 14 th May 2009, I am also satisfied about the genuineness of the attempt of the applicant to revive the company in liquidation. I also find that such revival would be in public interest and conform to commercial morality. I have gone through the applicant’s affidavit dated 19 th June 2009 setting out the undertakings in accordance with the directions in the order dated 14 th May 2009 and the affidavit dated 9 24 th June 2009 setting out the further undertakings to secure the repayment to the creditors of the company. I have also gone through the additional affidavit of the applicant dated July 2009 inter-alia setting out the steps taken for re-starting the operations of the Mill /Company . I am satisfied that the outstanding dues of all the shareholders of the company have been fully secured and that the company has taken steps to restart its operations. 7. For the aforestated reasons, company application no.1294 of 2007 is allowed in terms of the minutes of the order dated 3 rd August 2009 marked ‘X’. 8. All the above three applications stands disposed of, with no order as to costs. 9. Official Liquidator shall hand over the properties and records of the company to the applicant within a period of 2 weeks from today, after receiving his costs, charges and expenses, but without passing of accounts on an undertaking from the applicant that in case any amounts are found due and payable to the liquidator 10 towards his costs, charges and expenses, the applicant shall pay the same forthwith to the Official Liquidator upon receiving a letter to that effect from the Office of the Official Liquidator. 10. Mr. G.C. Singh and Ms. Cox shall have their respective company applications finally numbered by tomorrow. The need to annex a fresh Vakalatnama of the Advocates to their respective company applications is dispensed with. 11. The Official Liquidator shall after retaining an amount of Rs. 10 crores in the current flexi account, invest the balance amount in fixed deposits of nationalised Bank/s so as to get maximum interest thereon. [ S.J.KATHAWALLA, J. ]