Reserved Court No. - 9 Case :- COMPANY PETITION No. - 24 of 2009 Petitioner :- M/S Kotak Mahindra Bank Limited Respondent :- M/S Elgin Mills Company Ltd Counsel for Petitioner :- Om Prakash Mishra,Aditya Bhushan Singhal,Anand Prakash Paul,Ashok Shankar Bhatnagar,Kailash Nath Kesharwani,Kirtika Singh,Kripa Shanker Pandey,O.P.Mishra,Prabal Kumar Dixit,R.N.Singh,Ravi Prakash Srivastava,Rekha Singh,Syed Farman Ahmad Naqvi Counsel for Respondent :- A.K. Mishra,Chandra Bhan Gupta,Faizan Ahmad,N.K. Sharma,Nishant Mishra,Nitin Kumar Agrawal,O.L. M.K. Bagri,O.L. O.P. Sharma,O.P.Mishra,R.B. Singhal,Rajeev Chaddha,Rajesh Tripathi,S.F.A. Naqvi,S.K. Om,Shchindra Upadhyay,Subham Agrawal Hon'ble Anjani Kumar Mishra,J. Heard Shri Shashi Nandan, learned Senior Advocate assisted by Shri Sanjay Kumar Om in support of the recall application, under Section 151 CPC read with Section 466 of the Companies Act, which in turn is supported by an application under Section 5 of the Limitation Act for condonation of delay. By means of these application, the applicant, the Company (In Liquidation) seeks recall of order dated 23.01.2019 and also a stay of the proceedings of tender/ sale notice which tenders are to be opened today. Vide order dated 23.01.2019, the Officer Liquidator had been permitted to publish tender/ sale notice inviting bids for the sale of moveable assets of the Company (In Liquidation), to be opened on 27.01.2019. After hearing counsel for the applicant as also Shri O.P. Mishra for the petitioner in this Company petition and Shri Subham Agrawal for the Official Liquidator, the recall application was rejected on 27.01.2019, observing that detailed reasons would follow. The reasons for rejecting the recall application are being provided hereunder. The instant Company Petition No.24 of 2009, was allowed vide order dated 25.10.2010 and M/s Elgin Mills Company Ltd was before to be wound up. This winding up order was stated to be exparte and therefore, on 09.11.2010, the Company filed an application for its recall. The Company Court vide order dated 18.02.2011 allowed the recall application. Aggrieved by the recall of the winding up order, the petitioner M/S Kotak Mahindra Bank Limited filed Special Appeal No.439 of 2011. The Division Bench vide order dated 24.03.2011 stayed the operation of the order dated 18.02.2011, whereby the recall application of the Company had been allowed. Thereafter, the Company preferred Special Leave Petition Nos.11162 and 11163 of 2011 before the Apex Court. The Apex Court vide order dated 20.05.2011 disposed of the Special Leave Petition with a direction that the Special Appeal pending before the Division Bench of this Court be decided within a period of six months. It was also provided that in case, the Official Liquidator takes charge of the assets of the Company, he shall not dispose them during the pendency of the Special Appeal. The Special Appeal aforesaid was allowed by the Division Bench of this Court and the matter was remanded to the Company Judge with certain directions/ observations vide order dated 15.07.2011. On 05.09.2011, an application was filed before the Company Judge stating therein that the Company being a Government Company, had every intention of clearing all the dues of secured creditors and was also interested in reviving the Company, itself. ? The Company Court, vide order dated 06.09.2011 rejected the applications for recall of order dated 25.10.2010 was rejected as was the application for time to decide to decide rehabilitation of M/s Elgin Mills Co. Ltd. and the Official Liquidator was directed to proceed to take possession of the assets, immediately. Against the order dated 06.09.2011, the Company preferred Special Appeal No.1802 of 2011. It was stated before the Division Bench that the Dispute Redressal Committee had taken a decision to pay of all the secured creditors, which payment would be of the principal amount along with 25% of the interest, which had accrued on the principal amount. In pursuance thereof, the petitioner Bank have been paid a sum of Rs.1.25 crores. ? The Special Appeal No.1802 of 2011 aforesaid was allowed on 14.02.2012, the order dated 06.09.2011 rejecting the applications of the Company was set aside and the matter was remanded to the Company Judge for considering the applications dated 02.01.2010 (actually 09.11.2010) and 05.09.2011 filed by the applicant-company. It is stated that in pursuance of the order passed by the Division Bench, an application was filed on 29.02.2012 for rehabilitation of the Company (In Liquidation) and for withdrawal of the order passed for winding it up. Again, on 10.09.2012, the Company Court directed M/s Elgin Mills Company Ltd to file a concrete and comprehensive proposal for revival within three months. The contention of Shri Shashi Nandan, counsel for the Company (In Liquidation) is that the order dated 14.02.2012 passed by the Division Bench has not been complied with and the applications dated 02.01.2010 and 05.09.2011 have not yet been disposed of. Yet this Court is proceeding with the sale of the assets. This is not permissible and therefore, the order dated 23.01.2019 be recalled and this Court may not proceed further and the bids received for sale of the movable assets and are to be opened today, be not opened. Shri O.P. Mishra, counsel for M/S Kotak Mahindra Bank Limited and Shri Shubham Agarwal, counsel for the Official Liquidator have refuted the submissions made by Shri Shashi Nandan and have pointed out that consequent to the order dated 14.02.2012. The application dated 09.11.2010 (mentioned on 02.01.2010) was rejected on 11.02.2016, whereas Application dated 05.09.2011 was decided on 06.09.2011. These order has not been challenged any further and has attained finality. This afore-noted orders, find mention in order dated 29.02.2018, also. Under the circumstances, the recall application filed by M/s Elgin Mills Company Ltd is misconceived and is also a malafide attempt to interfere in the Court proceedings on incorrect grounds. Apart from the above, the additional submission of Shri Shashi Nandan is that in terms of the decision taken by the Dispute Redressal Committee, all the secured creditors have been paid and they have all furnished no dues certificates, except M/S Kotak Mahindra Bank Limited. Under the circumstances, this Court may consider revival of the Company and stay the auction proceedings in the changed facts and circumstances, at least. The first contention that the order of the Division Bench dated 14.02.2012 has not been complied with and the applications for revival of the Company and recall of the winding up order have not yet been decided finally, is on the face of the record, absolutely incorrect. Application dated 09.11.2010 (wrongly mentioned as 02.01.2010) was rejected on 11.02.2016, while application dated 05.09.2011 was decided on 06.09.2011. This has also been observed in the order dated 29.02.2016 which was passed in presence of Shri C.B. Gupta, counsel for the Chairman-cum- Managing Director, British India Corporation Ltd. As is recorded in the order, itself. Even, the plea of revival of Elgin Mills was rejected on the reasoning that no proper and detailed proposal for revival of the Company was every furnished. Therefore, there was no justification to recall the winding up order and to consider the plea for revival of the company. Although, it is not mentioned in the order dated 29.02.2016 but it has been pointed out by Shri O.P. Mishra as also Shri Shubham Agarwal that there is available on record of the Company Petition, an affidavit of Ms. Zohra Chatterji, Secretary (Textiles), Govt of India, Ministry of Textiles, Udyog Bhawan, New Delhi, sworn on 24.09.2013. In para 4 of this affidavit, it is stated as follows - “4. That in response to aforesaid order of the Hon'ble Court, an affidavit was filed on 03.09.2013 stating that the revival plan of BIC is dependent upon sale proceeds of the surplus land of BIC after converting them from lease hold to free hold. Govt. of UP has expressed their inability to convert the lease hold/ nazul land of BIC into free hold. Consequent upon the decision taken by the Govt. of U.P. In this regard, the sale of land has not become possible for BIC, hence, on account of non- generation of funds for implementation of its revival scheme, the same has become un-implementable. Though the UP Govt. has been requested to reconsider its decision, however, no response has been received. It was further submitted that the Elgin Mills Co. Ltd. Being the subsidiary of BIC and presently under liquidation is facing difficulties for its revival. In view of the decision of Govt. of UP expressing their inability for conversion of lease hold/ nazul land into free hold, this Ministry is moving a Cabinet Note to obtain directions and approval of the Cabinet on the way forward in the light of these developments including possibility of closure.” Further, after taking note of the affidavit aforesaid, the Court in its order dated 04.10.2013 observed as follows :- “ The sale of the properties of the Company is being objected to in this Court by none other than an employee namely the Managing Director of the Company. The reason is obvious. The officers some how or the other wants to retain the huge bungalow worth crores of rupees by paying nominal rent which has not been revised for decades together despite the value of the property was appreciated more than 100 times. The Ministry must examine all the affidavits filed by the managing Director and inform the Court about concealment of relevant facts including the factum of payment of salary for all these years without actually discharging duties and as to whether factum of pendency of these winding up proceedings before this Court since 2009 has not been brought to the knowledge of the Apex Court. The Secretary shall also examine as to how the Managing Director is repeatedly informing this Court that a revival scheme is pending consideration before the Government when from the records it is established that the Ministry has only contemplated sale of the land of the Company and has filed affidavit before the Apex Court in that regard. It must be kept in mind that liquidation of the debts by sale of land of the Company and revival of a sick Company are two entirely different concepts.” Thus, there is no proposal for revival of the Company (In Liquidation) is pending consideration before the Ministry. At best, there may be an attempt to sell its land. This clearly emerges from the orders dated 04.10.2013 extracted above. Therefore, the plea that this Court may consider revival of the Company is not liable to be considered. Moreover, this plea has already been raised earlier, in the absence of any concrete revival plan/ scheme. This is an additional ground for repelling the submission made by Shri Shashi Nandan. It would be relevant to note that the applications under consideration are supported by an affidavit of Shri Manoj Kumar Verma, who has stated that he is working as General Manager of the British India Corporation and that M/S Elgin Mills Company Ltd is a subsidiary of the British India Corporation, and is a government company. Reference has also been made to certain communications to the Textile Ministry to convey that negotiations with the State Government are ongoing , for revival of the Company. A factually incorrect impression is sought to be conveyed because the attempt, if any, of the Textile Ministry of the Govt. of India was to get the land of the Company (In Liquidation) converted into free hold land with a view to sell it, thereafter. This Court, under the circumstances additionally does not find the instant recall application to be bonafide. The order dated 29.02.2016 was passed after hearing counsel for the Company. The British India Corporation therefore, cannot take a plea that it was not aware of this order, which records a finding that the applications required to be considered by the Company Court, under directions issued by the Division Bench have been duly considered and decided, as noted above. Being aware of the orders as also order dated 29.02.2016 and having failed to challenge them, the instant recall application, which has come up before this Court on the date when tenders for sale of the moveable assets are to be opened, appears to be nothing but an attempt to scuttle the sale of movable assets, by filing applications on half baked and incomplete instructions. From the arguments raised and the submissions made by Shri Shashi Nandan, learned Senior Advocate, this Court finds that he was never informed about the order dated 29.02.2016 as also the orders referred to, therein. The applicant and especially the deponent, who has sworn the affidavit filed in support of this recall application is either absolutely ignorant of the facts of the case or has attempted to mislead not only this Court but also a Senior counsel appearing on his behalf. Under the circumstances, this Court is constrained to hold that the recall application was liable to be and was rightly rejected on 27.02.2019. Additionally, this Court directs the deponent of the affidavit filed in support of the recall and the delay condonation applications,Shri Manoj Kumar Verma, General Manager, British India Corporation to file the Board Resolution, whereunder, he had been authorized to file these applications. This must be done within a period of two weeks from today. Order Date :- 16.04.2019 RKM Digitally signed by ANJANI KUMAR MISHRA Date: 2019.04.16 17:15:27 IST Reason: Document Owner Location: High Court of Judicature at Allahabad