- (1.) This appeal is at the instance of an unsuccessful applicant under Section 466 of the Companies Act (hereinafter referred to as the Act) and is directed against an order dated December 2, 2005 passed by a learned Single Judge thereby dismissing the said application.
(2.) The facts giving rise to filing of the present appeal may be summed up thus: 1) The company in liquidation was incorporated in the year 1985 and had gone into liquidation on the June 4, 1990. During the said period, it took loan from Allahabad Bank for the recovery of which the Bank instituted a suit which ended in a decree for a sum of Rs. 3,47,04,232.85p. together with interest at the rate of 12% per annum. The said decree gave time of 60 days to the judgment debtor to pay the said amount with the stipulation that in default, the Bank would be at liberty to sell the property of the judgment debtor by public auction or by private contract. For the inability on the part of the judgment debtor to pay the decretal dues, the Bank put the decree in to execution. In the meantime, the Official Liquidator having given an advertisement for sale of the factory and assets as a going concern with the obligation to the purchaser to re-employ the workers, the Bank preferred two Special leave applications before the Supreme Court of India against two such orders dated February 23 1998 and July 10, 1998 authorizing such sale. 2) Those two Special Leave Applications were disposed of by granting time of 10 weeks for concluding the sale with further observation that in cases the sale was not concluded within the said period, the order of the High Court directing sale of the company as a going concern would stand set aside and the Official Liquidator should proceed to sell the assets of the company, first, by selling the plant and machinery and other movable assets, and then, the other assets in such a manner that maximum price was fetched keeping the interest of the other creditors. The Supreme Court directed that out of the sale proceeds, first, the decree in favour of the Bank should be satisfied and then, the Official Liquidator should proceed to distribute the balance amount to the creditors in accordance with law. 3) It appears from record, that prior to the filing of the application under section 466 of the Act out of which the present appeal arises, several similar applications were filed. The first of such applications was filed on June 29, 1992 by some of the contributories, which ended in dismissal. The second one was filed by one Sylvan Commercial Private Limited, which succeeded and one G.S. Surekha was permitted to run the company. The said order was, however, reversed on November 8, 1997 in appeal and the Official Liquidator again took possession of the factory. The application for special leave by Sylvan was dismissed by the Supreme Court of India. The third application was filed by the present appellant on April 29, 1999 which was dismissed on December 21, 1999 by a learned Single Judge of this Court and the appeal preferred against such order by the present the appellant was withdrawn with liberty given by the appellate court to the appellant to file a fresh application. The fourth application was filed by the appellant but the same was dismissed as there was no definite proposal for investment by the appellant for revival of the company. 4) While dismissing the fourth application mentioned above, the learned Single Judge gave liberty to the appellant to file a fresh application disclosing, 1) the entire liability of the company in liquidation, 2) amount of investment the appellant proposed to make, 3) viability statement, 4) projected balance sheet to consider the proposal of the appellant with regard to the repayment of liabilities. 5) Pursuant to such liberty given by the learned Single Judge, another application was filed by the appellant out of which the present appeal arises.
(3.) The learned Single Judge, as it appears from the order impugned, dismissed the application principally for the following reasons: 1) No provision was made in the scheme in respect of the source of money from which the appellant would be in a position to pay the dues of the Bank. 2) Although the appellant had not disclosed the source of making payment of Rs. 95 lakh in the scheme, it appeared that such scheme is further subject to the permission to be obtained from the State Government and other appropriate authorities for the change of usurer of the land from industrial use to the residential one. 3) There was no indication in the scheme as to the source from which the unsecured creditors would be paid the principal amount of their dues. 4) The appellant did not disclose the names of the unsecured creditors in the application. 5) The sole motive of the appellant was, as it appears from the scheme, to sell the factory land after converting those into various small plots for residential purposes in the disguise of revival of the company in liquidation.;