The Official Liquidator v.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 26.03.2021

CORAM:

THE HONOURABLE Mr.JUSTICE M.SUNDAR in C.P.No.104 of 2002 and C.P.No.104 of 2002 The Official Liquidator, High Court, Madras as The Liquidator of M/s.Millenium Pulps and Concretrates (India) Ltd., (In Liquidation) ... Applicant Company Application filed under Section 460(4) and 481 of the Companies Act, 1956 read with rules 9, 11(b) of the Companies (Court) Rules, 1959), praying to a) To take this report of the Official Liquidator on record on the file of this Hon'ble High Court.

b) To hear the pending applications filed by the Official Liquidator in C.A.No.792 of 2005 and C.A.No.361 of 2008 filed under Sections 454, 542 and 543 of the Companies Act, 1956 respectively along with the subject application.

c) To form an opinion that the liquidator cannot proceed with the winding up and that it is just and reasonable in the circumstances of the case to order for the dissolution of the company in liquidation as required under Section 481 of the Act, and discharge the Official Liquidator from the aforesaid company in liquidation.

d) To dispense with the audit of accounts, since there are no transactions in the company's account during the present filing period. e) To grant permission to deposit the unspent money in the company's credit, after meeting all incidental expenses of the winding process, to the Undistributed Assets Account and 1/16

f) To pass such order/orders of this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice. For Applicant in Comp.A.No.659 of 2017 : Ms.K.Latha Parimala Vadana, Official Liquidator.

For petitioner : Mr.Derrick Sam ***** C O M M O N O R D E R This common order will dispose of captioned application i.e., Company Application No.659 of 2017 and captioned Company Petition i.e., 'C.P.No.104 of 2002' [hereinafter 'main CP' for the sake of convenience and brevity]. Captioned main CP is vintage in every sense of the matter as it would turn 20 next year.

2. 'Millinieum Pulps and Concentrates (India) Limited' [hereinafter 'said company' for the sake of brevity and convenience] is the company under liquidation in main CP which as mentioned supra will be two decades old next year. Captioned application has been taken out by learned 'Official Liquidator attached to this Court' [hereinafter 'OL' for the sake of brevity and convenience] inter-alia under Sections 460(4) and 481 of 'The Companies Act, 1956' [hereinafter 'said Act' for the sake of brevity] read with rules 9 and 11(b) of 'The Companies (Court) Rules, 2/16

1959' [hereinafter 'said Rules' for the sake of brevity] for dissolution of said company. Prayer in captioned application is a multi-limbed prayer and this multi-limbed prayer in captioned application as culled out from judges summons reads as follows:

'a) To take this report of the Official Liquidator on record on the file of this Hon'ble High Court.

b) To hear the pending applications filed by the Official Liquidator in C.A.No.792 of 2005 and C.A.No.361 of 2008 filed under Sections 454, 542 and 543 of the Companies Act, 1956 respectively along with the subject application. c) To form an opinion that the liquidator cannot proceed with the winding up and that it is just and reasonable in the circumstances of the case to order for the dissolution of the company in liquidation as required under Section 481 of the Act, and discharge the Official Liquidator from the aforesaid company in liquidation.

d) To dispense with the audit of accounts, since there are no transactions in the company's account during the present filing period.

e) To grant permission to deposit the unspent money in the company's credit, after meeting all incidental expenses of the winding process, to the Undistributed Assets Account and f) To pass such order/orders of this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice.'

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3. Ms.K.Latha Parimala Vadana, learned OL is before this Court.

4. Mr.Derrick Sam, learned counsel on record for petitioning creditor in main CP i.e., 'IPA Weighbridge Private Limited' [hereinafter 'IPAL' for the sake of brevity] has joined the web hearing on a video conferencing platform i.e., Virtual Court.

5. In support of captioned application, a 'report of OL dated 21.07.2017' [hereinafter 'said report' for the sake of brevity] and 'further report dated 11.02.2021' [hereinafter 'further report' for the sake of brevity] have been filed.

6. Adverting to said report/further report, learned OL submits that this Company Court in and by an order dated 21.02.2003, appointed OL as liquidator of said company and gave further directions to take charge of assets and effects of said company. It is further submitted that pursuant to this order, OL had taken possession of assets of said company on 30.07.2003. It is also submitted that certain sums of money were realized by way of sale of immovable property, secured creditors have 4/16

been paid out pursuant to Court orders and no claim has been received from workmen creditors who are covered by Section 529-A of the said Act. Factual details (including those set out thus far) and the manner in which liquidation/winding up of said company unfurled post aforementioned 21.02.2003 order of this Company Court have been captured in Paragraph Nos.2 to 6 of said report which read as follows: '2. The Official Liquidator submits that pursuant to the order passed by the Hon'ble High Court, Madras the Official Liquidator had taken possession of the assets of the company in liquidation on 30.07.2003 at the factory premises of the company in liquidation situated at Paleru Village, Bangaru Palayam, Mandal, Chittor District, Andhra Pradesh. The Official Liquidator realised a sum of Rs.5,00,00,000/- (Rupees Five Crores Only) by way of sale of immovable and movables by the orders of this Hon'ble High Court.

3. That as per the orders of the Hon'ble Court the Official Liquidator had called for claims from the creditors of the company in liquidation. No claim from the workmen creditors falling under the purview of Section 529A of the Companies Act, 1956 was received by the Official Liquidator whereas he has 5/16

received 3 claims from the secured creditors viz., IIBI, IDBI and State Bank of Indore and 2 claims from ordinary creditors. The secured claims were adjudicated and divided @ 14.72% was paid to them in terms of the Hon'ble Court orders dated 01.04.2009 made in C.A.Nos.399 of 2009 and 30.08.2013 made in C.A.Nos.897 of 2013.

It is also submitted that in pursuant to the Hon'ble High Court, Madras order dated 27.06.2008 made in C.A.No.1732 of 2007 the claim submitted by the Customs & Central Excise Department was taken into consideration as preferential claim and adjudicated the claim and paid a sum of Rs.2,10,60,000/- as full and final settlement of their claim.

4. That the Ex-Directors of the company in provisional liquidation had not filed Statement of Affairs as per the provisions of the Companies Act. In this connection, the Official Liquidator had filed application under Rule 132 of Companies Court Rules, 1959 and for non-compliance of Section 454 of the Companies Act, 1956. The said application is pending before the Hon'ble High Court, Madras in C.A.No.792 of 2005.

5. The Official Liquidator further submits that the ex6/16

directors have not submitted any statutory Books and records pertaining to the company in liquidation due to which the Official Liquidator could not frame charges under Sections 542 and 543 of the Companies Act, against the ex-directors and in this connections the Official Liquidator filed a factual report under Sections 542 and 543 of Companies Act, 1956 in C.A.No.361 of 2008 before the Hon'ble Court which is pending.

6. That as on dated the funds available with the Official Liquidator is Rs.4,03,198.50 and 14 years have passed since the date of winding up order and that there are no further assets to be sold or funds to be realized no fruitful purpose would be served by allowing this company to continue its existence rather it would be more appropriate to dissolve the company and deposit the remaining amount in the Undistributed Assets Account under Section 555(1) of the Companies Act, 1956 after meeting the incidental expenses of dissolution.'

7. Though there is oral submission qua said report and further report, this Court deems it appropriate to extract and reproduce Paragraph Nos.2 to 10 of further report which read as follows: 7/16

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8. In the aforesaid backdrop, learned counsel for petitioning creditor submits that petitioning creditor is a ordinary creditor and in response to the 'Right to Information Act' ['RTI'] query, OL has stated that ordinary creditors will be paid after secured creditors are paid. Relevant portion of this reply of OL reads as follows: 12/16

9. Be that as it may, it is clear from said report and further report that a sum of Rs.4,03,201.50 [Rupees Four Lakhs Three Thousand Two Hundred One and Paise Fifty Only] is now available for disbursement. This Court is informed that of the two ordinary creditors, now (besides petitioning creditor) money has to be paid to one ordinary creditor which is shown as S.No.1 in the above said tabulation i.e., New Lakshmi Traders, Chittoor, Pin-517 001 (a proprietor carrying on business in this name and style) [Amount : Rs.62,524.00 (Ordinary Claim) (Not yet adjudicated)]. Learned OL undertakes to pay out this sum from the aforementioned balance to said ordinary creditor within five weeks from today i.e., on or before 29.04.2021.

10. Regarding petitioning creditor who figures as S.No.5 in the tabulation, learned counsel for petitioning creditor, on instructions, submits that petitioning creditor will accept Rs.3 Lakhs in all as full and final settlement of his claim of Rs.2,10,000/- with interest. This submission is recorded. Learned OL undertakes to pay out the petitioning creditor also within five weeks from today i.e., on or before 29.04.2021. Thereafter, post audit fee and Government commission 13/16

balance if any shall be deposited in the public account in this regard in the Reserve Bank of India under Section 555(2) of said Act. In any event there is one limb of prayer in captioned application and that is limb (e) (though provision of law has not been mentioned with specificity). It is made clear that this deposit under Section 555(2) of said Act shall be balance if any after paying out the aforementioned 2 ordinary creditors in the aforementioned manner within five weeks from today i.e., on or before 29.04.2021.

11. In the light of the narrative thus far, it comes to light that no useful purpose would be served by keeping the vintage main CP pending in this Court. To put in terms of a old adage, it would be a penny wise pound foolish exercise. Owing to this reason, this Court is of the opinion that it is just and reasonable in the facts and circumstances of this case to order dissolution of said company i.e., Millinieum Pulps and Concentrates (India) Limited under Section 481 of the said Act. Under normal circumstances, said company will stand dissolved from the date of this order, but in this case, by exercising inherent powers of this Company Court, owing to peculiar circumstances and trajectory which 14/16

has been set out, it is made clear that said company will stand dissolved on and from 30.04.2021. To be noted, this is to facilitate payments to the two ordinary creditors in the manner set out in this order elsewhere supra.

12. Captioned Company Petition and Company Application disposed of in the aforesaid manner. There shall be no order as to costs. 26.03.2021 mk Note : Issue order copy on 01.04.2021 Speaking/Non-speaking Internet : Yes/No Index : Yes/No M.SUNDAR, J 15/16

mk in C.P.No.104 of 2002 and C.P.No.104 of 2002 26.03.2021 16/16