NEW TOBACCO CO. LTD. Vs. OFFICIAL LIQUIDATOR
HIGH COURT OF CALCUTTA
New Tobacco Co. Ltd.
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Baboo Lal Jain, J. -
(1.)THE order dated February 23, 1994, made by S. C. Sen J. (as His Lordship then was), inter alia provided as follows:
The only choice before the Court was to sell the assets of the company piecemeal and divide the proceeds amongst the creditors. The apprehension of the Court was that even if all the assets were sold, the highest price realised would not be sufficient to pay off all the creditors. At the same time, about 2,100 workers would be rendered jobless. In fact, the erstwhile Committee of Management had stopped paying wages during the last three or four months to their workers. The workers are actually without any income and employment for a long period of time. Certain offers came for outright sale of the assets of the company, but the sale could not be finalised because valuation of the assets of the company could not be made in a hurry. The first Valuer appointed declined to act after some time. The second Valuer appointed declined to act after some time. The second Valuer met with an accident and valuation process has been stalled. There is no likelihood of valuation of all the assets of the company both at Biccavalu in Andhra Pradesh and at Calcutta being completed within a reasonable time. In that view of the matter it was decided to give the assets of the company to somebody on lease on a trial basis. Various offer came from a number of parties. To show the bona fide of the parties, they were directed to deposit Rs. 2 crores each. Only Prudential Equity Fund Ltd. and R. D. Builders and Developers Ltd. were able to deposit Rs. 2 crores. They have also offered to pay lease rent of Rs. 1 Crore 75 lakhs per annum which was the highest offer at the material time. Later on when the money was deposited, another offered; viz. S. D. Distributors wanted to raise their bid. But unfortunately the cheques given as deposit of Rs. 2 crores had been dishonoured by non -payment. Therefore their case could not be considered. Under these circumstances, the proposal of Prudential Equity Fund Ltd. and R. D. Builders and Developers Ltd. which offered to run the business of the company temporarily for three years on lease paying a rent of Rs. 1 Crore 75 lakhs is accepted on the terms and conditions contained in the proposal for lease. After the valuation report is received, steps would be taken to sell the assets of the company to the highest bidder by auction This has also been provided in the agreement for lease itself. Formal lease agreement will be signed for and on behalf of Prudential Equity Fund Ltd. and R. D. Builders and Developers Ltd. and Sri Mathura Nath Banerjee, who has been appointed the Special Officer, and also by the Official Liquidator. The agreement will be filed in Court. There is another factor which weighed with this Court in the matter of giving lease of the company to the highest bidder. The workers Unions had entered into an agreement with Prudential Equity Fund Ltd. and R. D. Builders and Developers Ltd. The State Government has also supported the said agreement between Prudential Equity Fund Ltd. and R. D. Builders and Developers Ltd. and the workmen represented by a number of trade Unions.
(2.)THE said order also provided as follows: Prudential Equity Fund Limited and R. D. Builders and Developers Limited are to be handed over all the properties of New Tobacco Co. Ltd. both in West Bengal and at Biccavellu at Andhra Pradesh on the terms and conditions contained in the proposal for lease handed up in Court today. An undertaking has been given on behalf of the lessees to pay the balance amount of Rs. 75,00,000 to 'he Special Officer on account of lease rent by 30 i April, 1994.
A Revolving Bank Guarantee must be furnished by 31st May, 1994. It is made quite clear that if the Revolving Bank Guarantee is not furnished by 31st May, 1994, and the balance amount of Rs. 75,00,000 is not paid in time, this order will stand recalled and the Special Officer will immediately take possession of the assets of the company and the lessees undertake to hand over possession of all the assets and properties of the company immediately back to the Special Officer.
(3.)IT is quite clear from the said order that the intention of the Court was that after the valuation report was received, steps would be taken to sell the assets of the company to the highest bidder by auction. It was also provided in the agreement for lease itself.
The said order dated February 23, 1994, was modified by an order dated March 7, 1994. By the said order the lessee was to have first option to purchase the assets of the company at the highest bid. By the said order dated March 7, 1994, it was inter alia ordered as follows: So far as possession of the office space of premises Nos. 1 and 2, Old Court House Street Corner, Calcutta, is concerned, the Joint Special Officers will remain in possession. Mr. Abhijit Mitra's client will, not take any steps in changing the nature and character or position of the office space of the premises in dispute. There will be an order of status quo as regards possession of the said disputed premises. The lessee will be entitled to run their business from the disputed premises under the Joint Special Officers on an undertaking to hand over possession whenever directed by the Court to do so. Mr. Mitra's Advocate on record will serve a copy of the petition filed by his client, M/s. Excel Tea Manufacturing Pvt. Ltd. upon the lessee in course of the day. The lessee will be at liberty to file affidavit -in -opposition to that petition. Such affidavit -in -opposition is to be filed by 15.1.1994. Affidavit -in -reply, if any, is to be filed by 21.3.1994, and the petition will appear in the list on 21.3.1994, at 2 p.m. as 'application (adjourned)'. Mr. Amit Sengupta, Mr. Abhijit Dasgupta and Mr. Ashok Dutta are directed to appear in person in Court on 21.3.1994 at 2 p.m. The Advocate -on -record of Mr. Abhijit Mitra will communicate this direction to Mr. Sengupta, Mr. Dasgupta and Mr. Dutt.
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