In Re: Swadeshi Mining and Manufacturing Co. Ltd.

Pankaj Mithal, J.—On a reference u/s 20(1) of the Sick Industrial Companies (Special provisions) Act, 1985 by the BIFR the winding up M/s Swadeshi Mining and Manufacturing Company Ltd. is pending consideration before this Court. The winding up order passed earlier by the Company Court on 29.9.99 had been set aside by Division Bench in Special Appeal vide judgment and order dated 28.1.08 and the matter has been remitted to the Company Judge again with the following observation:

We are of the view that neither appellate Court can monitor regularly nor the matter can be sent back to the BIFR or AAIFR. We are of the view that the learned Judge, sitting in the company jurisdiction is the appropriate forum for due consideration of the cause of revival and the intention of the parties in connection thereto. However, the learned Judge sitting in the company jurisdiction will have exclusive jurisdiction to finalize the issue of revival.

Therefore, the order impugned being dated 29th September 1999 cannot be sustained hence, it is set aside. The entire matter is remanded back to the learned Judge sitting in Company jurisdiction to take appropriate steps after going through the record of the case, and several directions given by this Court.

Consequently, order of sale of the Company is set aside without imposing any cost. Thus, both the appeals are disposed of.

In this context it is necessary to note that M/s Ganesh Sugar Mills, Pharenda, Anand Nagar, District Maharajganj is one of the units of the above company that has been taken administrative control by NTC (UP) Ltd. under the orders of the Supreme Court.

On 9.9.08 this Court after recording the entire facts and also the stand of the Ministry of Textiles to the effect that it will not restart the unit and is also not in a position to restart the same directed the NTC (UP) Ltd. to prepare a complete list of assets and liabilities of the Company; (ii) invite expression of interest for revival of the unit through joint venture from interested parties by making advertisement in leading news papers;(iii) permitted Bajaj Hindustan Ltd. and Shiv Shakti Chini Mill to bid for joint venture by satisfying the condition, which may be put by the NTC (UP) Ltd.; and (iv) thereafter directed the NTC (UP) Ltd. to consider the proposal and to submit the same for consideration of the Court. It was further kept open for the workers to approach the NTC (UP) Ltd. for the payment of their dues and the NTC (UP) Ltd. was directed to suggest the sale of some unutilized and surplus land for making ex gratis payment to the workers.

It has come on record that the efforts of the BIFR/AAIFR to rehabilitate the company have failed in the past and that the BIFR was left with no option but to recommend for the winding up of the company; the ministry of textiles or the NTC (UP) Ltd. is not interested in restarting the unit and in fact are not in a position to restart the same. No proposal for a joint venture has been received pursuant to the advertisement issued by the NTC (UP) Ltd. nor Bajaj Hindustan Ltd. and Shiv Shakti Chini Mill have come forward to restart the unit as a joint venture. In this view of the matter the revival or the restart of the unit is not possible at all.

The NTC (UP) Ltd. in pursuance to the order dated 9.9.08 has submitted an affidavit disclosing the liabilities and assets of M/s Ganesh Sugar Mills. According to the said affidavit dated 2nd July, 2010 the workers'' liability is to the extent of 21.82 crores. In the assets, apart from various land property, the estimated value of the plant and machinery has been disclosed as Rs. 5 crores. A supplementary affidavit dated 15th July, 2010 has been filed suggesting for the sale of 364 acres of farm land at Chahari stated to be worth Rs. 38.5 crores to satisfy the payment of the workers.

Since it is not possible to revive the company or even to restart the same as a joint venture, it appears to be fair and reasonable that pending final order in respect of winding up an interim order u/s 483(1)(c) of the Act be passed to allow payment of some dues to the workers who have not received a penny ever since the company stopped working in the year 1994. Accordingly, it is considered expedient and necessary in the interest of justice to permit NTC (UP) Ltd. to first consider disposal of the plant and machinery to be worth Rs. 5 crores. Let NTC (UP) Ltd. submit a detailed valuation report with regard to each component of the plant and machinery so that the minimum reserved price is fixed before advertising the sale by inviting tenders.

Sri Nagar, prays for and is allowed three weeks'' time for filing a detailed valuation report as suggested above.

List on 23.8.2010, on which date the issue of winding up of the company as a whole may also be considered.