COMP/55/2007 1/9 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY PETITION No. 55 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= BOARD FOR INDUSTIRAL AND FINANCIAL RECONSTRUCTION. - Petitioner(s) Versus CHAIRMAN & M.D. M/S. LA-BEL LAMINATES LTD. & 7 - Respondent(s) ========================================================= Appearance : BOARD OPINION for Petitioner(s) : 1, OFFICIAL LIQUIDATOR for Respondent(s) : 1, MR NITIN K MEHTA for Respondent(s) : 1, MR.VARUN K.PATEL for Respondent(s) : 1, MR SANDEEP N BHATT for Respondent(s) : 2, GOVERNMENT PLEADER for Respondent(s) : 3, NOTICE SERVED for Respondent(s) : 4, MR NIRAL R MEHTA for Respondent(s) : 5, MR HARIN P RAVAL for Respondent(s) : 6, NOTICE NOT RECD BACK for Respondent(s) : 7, MR PR NANAVATI for Respondent(s) : 8, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.A.PUJ Date : 07/02/2008 COMP/55/2007 2/9 JUDGMENT ORAL JUDGMENT 1. The Board for Industrial and Financial Reconstruction (BIFR) has recorded an opinion under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) that it is just and equitable that M/s.LA-BEL LAMINATES (P) LIMITED should be wound up and has directed the Registrar to forward the said opinion to this Court. Accordingly, the Registrar vide his letter dated 22.2.2007 has forwarded the opinion of the Board as it contained in the order dated 9.11.2006. 2. Based on the said opinion, the Registry of this Court has registered the opinion as Company Petition No.55 of 2007. This Court has issued notice on 06.03.2007 making it returnable on 09.04.2007. The Company along with the other Secured Creditors were duly served. On 10.10.2007, this Court has COMP/55/2007 3/9 JUDGMENT passed an order observing that as such, there is already an order dated 9.11.2006 containing BIFR opinion to the effect that it is not possible to revive the Company. The Court further observed that no material was produced on record to show the position otherwise. The Court has also recorded that it was an admitted position that the Company was closed and when BIFR has opined that there was no chances of revival, it would be prima facie just and proper to pass the order of winding up. The Court thereafter heard Mr.Varun Patel, learned advocate appearing for respondent No.1 Company and others, who appeared for secured creditors and passed an order of admission as well as advertisement of petition on 29.11.2007. The Official Liquidator attached to this Court was appointed as the Provisional Liquidator of the Company and he was directed to issue public advertisement in relation to the order of admission of this COMP/55/2007 4/9 JUDGMENT petition in two Newspapers, namely, 'Indian Express' – English Daily and 'Saurashtra Samachar' – Gujarati daily – both Rajkot editions fixing the final hearing on 28.12.2007. Publication of advertisement in the Official Gazette was dispensed with. 3. The Court has also directed the Official Liquidator to take possession of all the assets of the Company in liquidation and to file his compliance report on or before the returnable date. The Court has also passed an order of injunction restraining the respondent No.1 Company as well as respondent No.2 i.e. State Bank of Saurashtra and/or its Agents or Assignees from dealing with the assets of the Company in any manner whatsoever. 4. Subsequent to this, the Official Liquidator has filed speaking to minutes seeking some modification in the order with COMP/55/2007 5/9 JUDGMENT regard to the publication of advertisement in the newspapers. Accordingly, on 6.12.2007 this Court has directed the Official Liquidator to issue advertisement in two newspapers, namely, “Indian Express” - English daily, Ahmedabad Edition covering Rajkot and “Fulchhab” - Gujarati daily, in Rajkot Edition. 5. Pursuant to this direction, the Official Liquidator has filed his report on 27.12.2007. In the said report it is stated that an advertisement as directed by this Court was published in two newspapers, i.e. “Indian Express and Fulchhab. Since the possession was with M/s.Usha Martin Finance Ltd., security agency was appointed, inventory has been taken and the possession was also taken from M/s.Usha Martin Finance Ltd. After narrating the details about the action taken by him, the Official Liquidator has prayed for the direction to join COMP/55/2007 6/9 JUDGMENT M/s.Usha Martin Finance Ltd., as party respondent. Accordingly, M/s.Usha Martin Finance Ltd., was joined as party and notice was issued to the said party. Pursuant to the said notice Mr. P.R.Nanavati, learned advocate appeared for M/s.Usha Martin Finance Ltd. Some of the prayers made by the Official Liquidator in the said report have been granted. 6. Subsequent to this, the Official Liquidator has filed further report on 9.1.2008 alongwith that he has submitted Inventory Report prepared by the valuer. He has also stated that the Security Agency, namely, M/s.Blockade Defence Service, Aahmedabad was requested to increase the security strength from 1 security guard per shirt to 3 security guards per shift and hence the Official Liquidator has prayed for the direction to make payment to the valuer as well as security agency. COMP/55/2007 7/9 JUDGMENT 7. In the above background of the matter the petition was taken up for final hearing. Heard Mr.Varun K. Patel, learned advocate appearing for the respondent No.1 Company, Mr.P.R.Nanavati, learned advocate appearing for respondent No.8 Company and Mr.Nitin Mehta, learned advocate appearing for the Official Liquidator. An order was passed by the Court earlier wherein it was clearly stated that there was no scope of revival of the Company and the Company was required to be wound up. Even the BIFR was also of the same view. All formalities with regard to admission of the petition as well as advertisement and appointment of the Official Liquidator are over and only final winding up order is required to be passed. Mr.Patel has also made it clear that earlier orders passed by the BIFR as well as this Court have not been challenged and they have COMP/55/2007 8/9 JUDGMENT become final. It is, therefore, obvious that the respondent Company is required to be wound up. Accordingly, the respondent Company is hereby ordered to be wound up. The Provisional Liquidator is hereby appointed as Liquidator of the Company. Since the possession is already with him there is no need to pass any further order with regard to the possession. The Official Liquidator is directed to call for the meeting of the secured creditors and workers and work out the agenda for disposal of the assets of the company in liquidation. Even with regard to the prayers made by him for reimbursement of the expenses from the secured creditors, the same shall be discussed in the sale committee meeting and appropriate decision shall be taken at the sale committee meeting. The Official Liquidator shall issue notice to the Ex- Directors of the Company to file Statement of Affairs. Necessary compliance report be COMP/55/2007 9/9 JUDGMENT filed before the Court within one month from today. 8. Subject to the aforesaid observations and directions this petition is accordingly disposed off. (K. A. PUJ, J.) kks