- (1.) Instant company petition has been filed under Section 633(2) of the Companies Act, 1956 ("the Companies Act") seeking direction to relieve the Petitioners from prosecution for any alleged defaults or breach of provisions of the Companies Act, if any having been committed during the period prior to management of Shri Ganpati Fertilizers Ltd. ("the company") being taken over by the Petitioners.
(2.) As alleged, the Petitioners are professionals being full time employees of M/s. DCM Shriram Consolidated Ltd. ("DSCL"), which was the sole secured creditor of the company. It has been alleged that the company since its incorporation in the year 1994, was solely under the control and management of its original promoters/directors (Mr. R. K. Joshi, the then managing director, his family members and close relatives). In 2005, the company being in serious financial crisis, was indebted to the Punjab National Bank for a sum of Rs. 1,044 lakhs ; thereby the bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the entire plant, machinery, factory land and other assets of the company were attached ; in such circumstances, the company approached DSCL seeking financial aid, promising to sell its products to DSCL in turn and repaying the loan amount in accordance with the agreements dated January 31, 2006 and other related agreements. As alleged, the DSCL disbursed Rs. 300 lakhs, for being utilised by the company for settling its dues with PNB ; and that apart, further working capital of Rs. 442 lakhs was also provided by DSCL for revival of the operation of plant of the company being closed since long time.
(3.) As alleged, after borrowing the amount from DSCL and settling its account with PNB, the original promoters (Mr. R. K. Doshi and Associates) of the company became negligent and did not take appropriate steps for revival and operation of the company; rather committed a number of defaults on account of negligence on the part of the then promoters (Mr. R. K. Joshi) who were directors and were having exclusive control over the affairs of the company; and only after detailed correspondence and notices, calling upon them to ensure legal compliance and for revival of the operation of the plaint in terms of agreements executed by them, the DSCL was constrained to invoke Clause 12 of the agreement and nominated Petitioners Nos. 1 to 4 on the board of directors of the company with a view to protect its interest under the loan agreement.;