HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition No.164 of 2009 Dated : 22-06-2011 Between: M/s Asset Reconstruction Company (India) Limited (Arcil), Rep.by its Chief Manager. …Petitioner A n d M/s Alimchand Topandas Oil Industries Limited, Begumpet, Hyderabad …Respondent THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition No.164 of 2009 ORDER: This petition has been taken out under Sections 433(e) (f), and 439 (1)(b) read with Section 434 of the Companies Act, 1956 seeking for an order for winding up of the respondent company – M/s Alimchand Topandas Oil Industries Limited. The petitioner is a Company incorporated under the Companies Act, 1956 and registered with Reserve Bank of India as a reconstruction and securitisation company under Section 3 of the Securitisation & Reconstruction of financial assets and enforcement of Securities Interest Act, 2002. The respondent is a Company registered under the Companies Act, 1956 having its registered office at Flat No.101, 1st floor, Technopolis Apartments, “C” Block, Begumpet, Secunderabad. The main objects of the respondent Company are to carry on the business of extracting or manufacturing or producing vegetable non-essential edible oils, non-edible oils either by crushing or by chemical process or by any other processes more specifically solvent extraction process from Bran, cobra, cotton seed, linseed, castor seed, groundnuts, til or any other nuts or seeds or other oil bearing substances whatsoever etc,, more fully described in para 5 of the petition. The respondent approached Punjab National Bank for sanction of Working Capital Demand Loan and Term Loan. The respondent company availed the loan facilities and created first charge by way of mortgage, in respect of all its immovable properties. The respondent company, for securing the working capital facility, executed a Deed of Hypothecation of movable assets, forming part of fixed/block assets for all the loan facilities availed to a tune of Rs.1900 lakhs. The respondent approached the Punjab National Bank for grant of term loan of Rs.750 lakhs for running of the factory at Adoni, Kurnool District. The respondent availed term loan facility. The Punjab National Bank vide an assignment agreement dated 28.03.2005 has assigned all its rights, title, interest in favour of the petitioner company and that the petitioner vide provisions of Section 5 of the SARFAESI Act, 2002 stepped into the shoes of Punjab National Bank and became its successor. In view of the assignment, the petitioner company is entitled to recover the dues that are due to the Punjab National Bank from the respondent company. The petitioner issued notices to the respondent company demanding the payment of the amounts due under various loan facilities availed by it. The petitioner was able to take possession of only the Gooty property on 25.07.2007. However, the applicant could not take possession of the properties at Adoni because of strong resistance from the workers. Then the petitioner called for bids for sale of said Gooty property by way of public auction in terms of ‘Document for Terms of Invitation and Sale’ dated 17.01.2008. S.Mahaboob Vali was declared successful bidder of property and sale was confirmed in his favour for an amount of Rs.59.00 lakhs and thereafter sale certificate has been executed as per the SARFAESI Act. After adjusting the money, the respondent is still due to pay an amount to a tune of Rs.35,37,39,675/-. The petitioner company sent a statutory notice to the respondent under Sections 433 and 434 of the Companies Act, 1956 on 19th February, 2009 calling upon the respondent to pay the due amount of Rs.35,37,39,675/-. The notice sent to the respondent returned unserved with an endorsement ‘addressee left’. The notice addressed to the factory has been returned with an endorsement ‘shifted’. The petitioner filed O.A. before the Debt Recovery Tribunal and the proceedings are pending before the Debt Recovery Tribunal. In view of the above circumstances, the respondent company has become commercially insolvent and is not in a position to viably and feasibly manage its financial positions. Hence, this petition. Notice before admission came to be ordered on 19.10.2009. On 02.03.2010 and 30.03.2010, the petitioner was directed to take out fresh notice to the respondent by registered post with acknowledgment due. The petitioner filed memo stating that notice taken out to the respondent by registered post with acknowledgment due has been served. The respondent despite receiving the notice did not choose to enter appearance either in person or through counsel. Therefore, by an order dated 28.04.2010 the petition came to be admitted and directed to be listed for hearing. The petitioner published in ‘Andhra Jyothi Telugu Daily and Deccan Chronicle English Daily’ with regard to the admission of the petition. Copies of the publication has been filed as proof. The respondent has not chosen to enter appearance to resist the petition. The petitioner filed affidavit of Sachin Somani in lieu of chief-examination. 15 documents have been marked on his behalf as Exs.P-1 to P-15. Heard learned counsel appearing for the petitioner and perused Exs.P-1 to P-15. As per Ex.P.1 - sanction letter dated 07.08.2001, the respondent company has been sanctioned Fund Based working capital limit of Rs.1150 lacs and Term Loan of Rs.750 lacs. Ex.P.2 is the copy of the Working Capital Demand Loan agreement dated 18.09.2001. Ex.P.3 is the copy of agreement of hypothecation of goods and book debts dated 18.09.2001. Exs.P.2 to P.4 indicate that the respondent company availed the loans and offered the movable properties as security for the loan. Exs.P.10 Copy of deed of Hypothecation deed executed by the respondent company. Ex.P.11 is the copy of assignment agreement dated 28.03.2005. As per the said agreement, the amounts due from the respondent company have been assigned to the petitioner. Thereby, the petitioner is entitled to recover the amounts due from the respondent company. Ex.P.12 is the statement of account dated 15.05.2008, the amounts due from the respondent under various facilities have been stated therein. Ex.P.13 is the statutory notice issued under Section 434 of the companies Act calling upon the respondent to pay the amounts due under various loan facilities within 21 days. Despite receipt of notice, the respondent failed to liquidate the liability. Even when notice before admission has been ordered in this petition, respondent did not choose to enter appearance to contradict the averments made in the petition. The evidence of PW.1 and Exs.P.1 to P.15 substantiate the contention of the petitioner that the respondent company has become commercially insolvent warranting the order for winding up. Hence, I order winding up of the respondent company-M/s Alimchand Topandas Oil Industries Limited. Notice of the order for winding up of M/s Alimchand Topandas Oil Industries Limited, Flat No.101, 1st floor, Technopolis Apartments, C-Block, Bapuji Villa, Beside Pantaloon, Begumpet, Hyderabad shall be sent forthwith to the Official Liquidator in Form No.50 under Rule 109 of the Companies (Court) Rules, 1959 enclosing a copy of the petition and affidavit filed in support of the petition. Pursuant to Rule 114, the Official Liquidator shall forthwith take into his custody or under his control, all the properties and assets and the books and papers of the company and shall take necessary steps for that purpose. The order for winding up shall be drawn up in Form No.52 and two certified copies thereof shall be sent as per Rule 111 to the Official Liquidator. The Official Liquidator shall cause a sealed copy of the order served on the respondent- company as required by sub-rule(2) of Rule 111 and also serve true copy of the order on the Managing Director of the respondent-Company by registered post. The order for winding up of the respondent-company shall be advertised by the petitioner in Form No.53 in Hyderabad daily edition of “Deccan Chronicle” and also in Hyderabad edition of Telugu daily “Andhra Jyothi” within fourteen days. The petitioner shall deposit a sum of Rs.10,000/- with the Official Liquidator towards incidental expenses within four weeks. Accordingly, the Company Petition is allowed. _____________________ B.SESHASAYANA REDDY, J Dt.22-06-2011 PNV THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition No.164 of 2009 Dated : 22-06-2011