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Corp Case

Petitioner is National Investors Forum who has sought the winding up of the company on account of its inability to pay admitted debts. Petitioner is alleged to have collected more than 3,000 crores of rupees from investors, creditors and consumers by making false promises. The company filed a detailed written statement wherein it stated that the company had adequate assets and resources to pay back all its debts.

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Ashlesha Galgale
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159 views17 pages

Corp Case

Petitioner is National Investors Forum who has sought the winding up of the company on account of its inability to pay admitted debts. Petitioner is alleged to have collected more than 3,000 crores of rupees from investors, creditors and consumers by making false promises. The company filed a detailed written statement wherein it stated that the company had adequate assets and resources to pay back all its debts.

Uploaded by

Ashlesha Galgale
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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[2004]51 SCL 669 P&H
¢ ð
 
Hemant Gupta, J.
¢ 

. Uma Kanta and Gagan Deep Kathuria, Advs.
¢ r Appellant/Petitiner/Plaintiff: R.K. Chhibbar,
Sr. Adv. and Anand Chhibbar, Adv.
¢ r Respndents/Defendant: Anil Sharma and
Kanchan Sehgal, Advs.
rief acts:
¢ /s Glden rests (India) Limited is a cmpany incrprated under
the Cmpanies Act, 1956 (fr shrt the Act) n 23.2.1987. The
cmpany was given certificate fr cmmencement f business
under Sectin 149(3) f the Act.
¢ The cmpany annunced sme beneficial depsit schemes
ensuring highest returns t its investrs, creditrs r cnsumers. y
the end f 1997, it achieved the business target f Rs. 1,000 crres.
During the curse f hearing f the present case, it is admitted by
the cmpany that it has 24,65,231 investrs wh have invested sum
f Rs. 980.14 crres as principal excluding returns theren.

¢ Petitiner is Natinal Investrs rum wh has sught the winding


up f the cmpany n accunt f its inability t pay admitted debts.
¢ n an bjectin being raised by the cmpany, the petitiners,
have gt themselves registered as a sciety under the
prvisins f Scieties Registratin Act. It has been alleged
that the respndent has cllected mre than 3,000 crres f
rupees frm investrs, creditrs and cnsumers by making
false prmises in the name f scial justice, ecnmic
freedm fr all.

¢ The cmpany have assured t repay the mney f investrs


but in spite f such assurances, it has nt made the
payments.
¢ It is alleged that a legal ntice was issued t return the mney
within 3 weeks and this ntice was published in the Hindi
Daily haskar n 14.3.2001 as service by registered pst was
nt pssible. It may be stated that the Directrs f the
cmpany were arrested n 24.12.2000 in respect f
allegatins cntained in six different IRs ldged by the
Vigilance Department, Gvernment f Punjab. In spite f such
ntice, the cmpany failed t settle the claim f the
petitiners, therefre, the present petitin fr winding up was
filed.
¢ The cmpany filed a detailed written statement wherein it stated
that the cmpany had adequate assets and resurces t pay
back all its debts. It is further stated that the cmpany had
mved an applicatin befre Hn'ble umbai High Curt t
remve the receiver and permit the cmpany t hasten the
prcess f repayment f the investrs under the supervisin f
curt. It als stated that the cmpany wuld welcme the
interventin f the Chandigarh High Curt in whse supervisin
the investrs may be repaid t prevent any further lss f
prestige t the cmpany which is financially viable and investr
friendly.
¢ The cmpany sught a cnslidated scheme t be filed n
repayment t the satisfactin f the curt.

¢ n 2.5.2002, the petitin fr winding up was admitted and


factum f admissin was rdered t be published in the
newspapers and fficial gazette f U.T. Chandigarh.

¢ It was als argued that the prperty f the cmpany shuld be


put t sale s that investrs realise their dues. Still further, an
argument was raised that the Central ureau f Investigatin
shuld be directed t investigate int the affairs f the
Cmpany.
¢ n investigatin it was fund that the schemes f /s Glden
rests (I) Ltd. were nt being run in the best interests f investrs
and there was a pssibility f the investrs getting hurt in case
even a minr aberratin develped in the scheme because prima
facie there was n indicatin f 'any mechanism in place which
culd affirm the cmpany's credibility in terms f meeting its
cmmitments.´

¢ The Advcate fr the cmpany, bjected t the investigatin int


the affairs f the cmpany by Central ureau f Investigatin but
submitted that this curt culd appint any persn t investigate
the affairs f the cmpany in terms f Sectin 237 f the Act.
Cntentins:
¢ It was cntended by the petitiner that nce the petitin is
admitted, there is n discretin with the curt but t pass
the rder f winding up and appint fficial liquidatr as
liquidatr f the cmpany. It was argued that the
arrangement prpsed by the cmpany has been
withdrawn by the cmpany and the petitin has been
rdered t be admitted. In these circumstances, the rder
f winding up is a natural cnsequence.

¢ Shri . Uma Kanta, Advcate ppsed the winding up and


argued that the winding up rder will nt be able t prtect
the interest f large number f investrs wh have invested
their hard earned mney
¢ It is argued that the affairs were cnducted in an rganised manner
t syphn ff the funds f the cmpany and the matter is required t
be investigated by Central ureau f Investigatin. The winding up
rder wuld be detrimental t the interests f the sharehlders.

¢ It has been stated that the cmpany has assets wrth Rs. 1500
crres as against liability f nly Rs. 761 crres and this cmpany is
very much in a psitin t pay its dues. It is stated that the cmpany
was set up in 1987 and till 1988, there had been n default in
repayment f any maturity amunts and refunds f investrs.
Issue Invlved:
Held by the Curt:
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¢ The cmpany curt is required t examine whether


¢ the winding up f the cmpany is in the interest f sharehlders,
secured and unsecured creditrs, wrkers as well as in public
interest. It is natural cnsequence f admissin f petitin. Thus, the
curt was unable t accept the argument raised by Shri Chhibbar
that the cmpany curt has n discretin after the admissin f the
petitin but t pass the rder f winding up.

¢ ith a view t prtect the interests f the large number f creditrs,


sharehlders and the cmpany, the curt appinted an apprpriate
prvisinal Liquidatr fr cntrl, management and sale f the
mvable and immvable prperty s as t fetch maximum price
theref with a view t satisfy the claim f 25 lac investrs in a prper
manner.
¢ S far as the investigatin in cncerned, the Curt held that a
systematic investigatin int the affairs f the cmpany wuld bring
ut the extent f land wned by the cmpany, its legal and valid title,
its marketability, valuatin as well as t find ut whether the
cmpany has siphned ff mney t its Directrs, assciates,
subsidiary cmpanies, etc. Such investigatins are required t be
cnducted by an auditr wh shall exercise such pwers and duties
inclusive f thse cntained in Sectin 227 f the Cmpanies Act.

¢ The Curt was f the pinin that keeping in view the serius
allegatins against the management f the
¢ cmpany and deficiencies prima facie fund by the
cmmittee cnsisting f representatives f the Reserve
ank f India and SE I, the affairs f the cmpany were
required t be investigated thrughly. Hwever, the sale
f the prperty by the prvisinal liquidatr is nt
dependent upn cmpletin f the investigatins.
Investigatin wuld prceed independent f the sale f
the prperties.
¢ The Curt held that instead f winding up f the
cmpany, the interest f creditrs, sharehlders and the
cmpany, wuld be served if directins issued by the
Curt were fllwed.
Thank Yu

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