SHIV KUMAR SHARMA, J. - (1.) THE petitioner, Lords Chloro Alkali Ltd. (formerly known as Modi Alkalies and Chemicals Ltd.) filed this petition under Sections 391 and 394 of the Companies Act, 1956 (hereinafter shall be referred to as 'the Act of 1956'), for sanction of scheme of arrangement so as to be binding on all the secured creditors of the petitioner, i.e., respondents herein.
(2.) THE petitioner -company was incorporated on March 1,1979, in the State of Punjab originally under the name and style of Modi Alkalies and Chemicals Ltd. Subsequently in the year 1979 itself, the registered office of the petitioner was shifted to Industrial Area, Alwar (Rajasthan). The name of the petitioner -company was subsequently changed to Lords Chloro Alkalies Ltd. on February 1, 2003. The petitioner -company had availed of financial assistance from the IDBI, IFCI, PNB, ICICI, SBI, Indian Bank, Syndicate Bank, IIBI, UTI and RIICO. It was stated in the petition that the company had operated successfully till for almost fifteen years. Thereafter, it had incurred financial losses and as a result of which its net worth had fully eroded. Upon erosion of its net worth as on June 30, 1999, the petitioner -company filed a reference, which was rejected by the Board for Industrial and Financial Reconstruction. Upon further erosion of its net worth as on June 30, 2000, the company had accordingly filed another reference with the BIFR. The BIFR vide its order dated January 15, 2002, had declared the petitioner -company as a sick industrial company in terms of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA') on the basis of its reference for the financial year ending on June 30, 2000. It was stated in the petition that while the petitioner -company was in the process of entering into negotiation with its secured creditors, for settlement in their dues the BIFR, vide an ex parte order dated June 2, 2004, formed prima facie opinion to wind up the petitioner -company under Section 20(1) of the SICA and accordingly directed issuance of show cause notice for winding up of the petitioner -company. The petitioner -company filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction. In the interregnum the dues of PNB, SBI were settled at 26.5 per cent, of the principal by effecting payment to the tune of Rs. 61.75 lakhs and Rs. 55 lakhs, respectively, in full and final settlement of their dues. The IDBI assigned its debts to D and DARC, and ICICI had assigned its debts to Sopan Securities (P.) Ltd. The Indian Bank had also assigned its debt to D and DARC while Syndicate Bank had assigned its debt to First Alert Fire Systems (P.) Ltd. It has been stated in the petition that all the assignees are also prepared to settle their dues at 26.5 per cent, of the principal. The AAIFR, vide its order dated December 20, 2005, allowed the appeal and set aside the order dated June 2, 2004 and remanded back the matter to the BIFR, where the matter is currently pending. It is stated in the petition that the petitioner -company is interested in settling the liabilities of its secured creditors. The IFCI, Sopan Securities (P.) Ltd. and D and DARC, who compositely constitute 86.94 per cent, of the total secured creditors, vide their letters dated March 10, 2006, July 26, 2006, and June 26, 2006, expressed their willingness for the settlement of their dues at 26.5 per cent, of the principal amount towards the full and final settlement of their dues. The board of directors of the petitioner -company, vide board's resolution dated July 31, 2006, approved the scheme of arrangement and the payments to be made thereunder. The scheme of arrangement has been annexed as annexure A to the petition.
(3.) THE petitioner -company filed Company Application No. 43 of 2006 for convening meeting of its secured creditors. This Court vide its order dated August 18, 2006, directed to convene meeting of the secured creditors on September 9, 2006, but the said meeting could not be conducted as on account of delay in calling the meeting. The petitioner -company filed application and on the application this Court further directed to call the meeting of the secured creditors, vide order dated September 1, 2006 and the meeting was directed to be convened on September 30, 2006. In the absence of Shri Suresh Pareek, chairman appointed by the court the meeting was adjourned and was notified to be held on October 7, 2006. In the meeting held on October 7, 2006, the scheme was supported and approved by D and DARC, SSPL and CCPL who jointly constitute more than 86.94 per cent, of the total secured creditors, while RIICO and UTI opposed the scheme and submitted their objections whereas IIBI had not attended the meeting. The petitioner -company submitted that more than 93.22 per cent, of the secured creditors present and voting agreed to the scheme of arrangement. The petitioner -company averred that more than three -fourth of the total secured creditors agreed for sanctioning scheme of arrangement.;