Allowed

M/S.Zigma Distributors Pvt.Ltd. v. M/S.Amar Remedies Ltd.,Cin NO.L99999MH1984PLC032687

Bombay HC27 Aug 2014CP/279/2013

Case brief

AI extract

What is this about?

Seventeen petitions for winding up Amar Remedies Ltd. were admitted and finally heard. The Court found the company commercially insolvent, ordered its winding up, appointed an Official Liquidator, and mandated the handing over of records.

What did the court decide?

Winding up of the Company Amar Remedies Ltd. was ordered; the Official Liquidator was appointed; the Managing Director directed to hand over statutory records.

M/S.Zigma Distributors Pvt.Ltd. Vs M/S.Amar Remedies… — Company and Corporate | Bombay HC (2014)

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cp-289.doc

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY PETITION NO.289 OF 2013

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Jamnadas Mathuradas … Petitioner versus Amar Remedies Ltd. … Respondent

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WITH

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COMPANY PETITION NO.517 OF 2012

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Enterprise International Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.26 OF 2013 IDBI Bank Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.166 OF 2013 Bhoruka Park Pvt. Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.187 OF 2013 L and T Finance Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.199 OF 2013 Prem Hemandas Rupani … Petitioner versus Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.264 OF 2013

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Bank of India … Petitioner
versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.279 OF 2013
Zigma Distributors Pvt. Ltd. … Petitioner versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.280 OF 2013
Zigma Distributors Pvt. Ltd. … Petitioner versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.281 OF 2013
Avadh Mercantile Company Ltd. … Petitioner versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.288 OF 2013
Sunil @ Vithaldas Jamnadas … Petitioner versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.307 OF 2013
M/s. Aar Aar Arts Pvt. Ltd. … Petitioner versus
Amar Remedies Ltd. … Respondent WITH COMPANY PETITION NO.332 OF 2013
M/s. Alfa Beta Chemicals Pvt. Ltd. … Petitioner versus
Amar Remedies Ltd. … Respondent ssp

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WITH COMPANY PETITION NO.338 OF 2013

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Phoenix Erectors Pvt. Ltd. versus

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… Petitioner

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Amar Remedies Ltd. … Respondent

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WITH

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COMPANY PETITION NO.398 OF 2013

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Essel Propack Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent

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WITH COMPANY PETITION NO.445 OF 2013

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Columbia Petro Chem Pvt. Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent

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WITH COMPANY PETITION NO.458 OF 2013

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Firstrand Bank Ltd. … Petitioner versus Amar Remedies Ltd. … Respondent

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Mr. Jamnadas Mathurdas, Petitioner in CP No.289 of 2013, present in person. Mr. Sunil Jamnadas, Petitioner in CP No.288 of 2013, present in person. Mr. Dhiren Mehta i/by M/s. Dhruve Liladhar and Co., for Petitioner in CP Nos.166 of 2013.

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Mr. N. Parikh i/by M/s. Mansukhlal Hiralal and Co., for Petitioner in CP No.517 of 2012.

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Ms. S.I.Joshi i/by M/s. S.I.Joshi and Co., for Petitioner in CP No.187 of 2013. Mr. S.C.Naidu i/by M/s. C.R.Naidu and Co., for Petitioner in CP No.307 of 2013.

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Mr. Anindya Basakod i/by M/s. Khaitan and Co., for Petition in CP Nos.279, 280, 281 of 2013.

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Mr. Ambika Prasad Singh, for Petitioner in CP No.445 fo 2013.

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Mr. Bhalchandra R. Palav i/by M/s. Amarchand and Mangaldas and S.A.Shroff and Co., for Petitioner in CP No.458 of 2013.

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Mr. Ashish Kamat i/by M/s. Chitnis and Co., for Petitioner in CP No.338 of 2013.

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Mr. Shrivardhani Deshpande i/by M/s. Desai and Diwanji, for Petitioner in CP No.398 of 2013.

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Mr. V.Kabre i/by Mr. R.D.Surana, for Petitioner in CP No.332 of 2013. Mr. Mayur Khandeparkar with Mr. Amol Kumeria i/by Mr. Y.R.Kanchan, for Respondent.

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Mr. Sagar Pravin Shah, M.D. of Respondent present. Mr. S. Ramakantha, Official Liquidator, present.

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Mr. Reddy, Dy. Official Liquidator, present.

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CORAM: S.J. KATHAWALLA, J.

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DATE: 27^th AUGUST, 2014

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P.C.:

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The above Seventeen Company Petitions have been filed by the Petitioners therein against the Respondent Company – M/s. Amar Remedies

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Limited (“the Company”), seeking winding up of the said Company. The Petitions have been admitted by this Court from time to time. The admission

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of the Company Petition was advertised as directed by this Court. The

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Company has filed its Affidavits-in-Reply wherein the Company admittedly has not set up any defense on merits. The above Petitions are now taken up for final hearing.

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The learned Advocate for the Respondent after obtaining instructions from the Director of the Company, who is present in Court, has informed the Court that: the Company has not filed any accounts with the

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Registrar of Companies after the year 2011-2012; the assets of the Company

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are worth Rs.100-125 Crores; the claim of the secured creditors is approximately in the sum of Rs.450 Crores inclusive of interest upto March 2014; the aggregate claim of the Petitioners herein is approximately Rs. 60 crores exclusive of interest; the workers (approximately 100) are not paid their wages/dues since September, 2013, and are paid in installments; statutory dues including Provident Fund dues are also not paid.

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From the aforestated facts, it is beyond any doubt established that the Company is unable to pay its debts and is commercially insolvent. In view thereof, all the above Company Petitions are allowed and the following order is passed:

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(a) that the said Company viz M/s. Amar Remedies Ltd., is ordered to be wound up.

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(b) that the Official Liquidator attached to this Court is appointed as Liquidator for the Respondent Company for all its assets and properties including business, stock in trade, plant and Machinery, debts, books of accounts, papers, vouchers, files, documents, etc., along with all powers under the Companies Act, 1956.

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(c ) Mr. Sagar Pravin Shah, Managing Director of the Respondent Company is present in Court. He states that he shall hand over the statutory records maintained by the Company at the registered office of the Company to the representative of the Official Liquidator at 3.00 p.m. today.

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The Managing Director further undertakes to call for the statutory records of the Company viz. Register of workers, etc. from the factory/office premises at Daman and Dehradun and hand over the same to the Official Liquidator on or before 1^st September, 2014. The Company Petitions are accordingly disposed of.

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However, before parting with this order, I would like to record

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the very distressing state of affairs prevailing in the office of the Official Liquidator, High Court, Bombay. In the present matter, the Official Liquidator, High Court, Bombay, was appointed as a Provisional Liquidator of the Company as far back as on 31^st July, 2013. At that time one Mr. Reddy was the in-charge Liquidator. Except for writing two letters, one in October, 2013 and the other in April, 2014, Mr. Reddy did not take any steps to take charge of the properties of the Company or the statutory records of the Company or to at least prepare an inventory of the movable and immovable assets of the Company thereby giving a complete free hand to the Directors of the Company to manage the affairs of the Company as per their convenience. The entire purpose of appointment of a Provisional Liquidator of the Company was thereby lost. I am informed that this Court had in May, 2014 issued directions to the Official Liquidator not to take possession of the assets of the Company secured in favour of the State Bank of India. This certainly cannot be used as an excuse by Mr. Reddy. The order appointing the Provisional Liquidator was

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passed on 31^st July, 2013, and even the order passed in May, 2014, did not prevent Mr. Reddy from proceeding to take charge of the books/records and other assets of the Company or to move this Court seeking appropriate directions against the Directors of the Company in the event of them not cooperating with Mr. Reddy. Mr. Reddy is therefore guilty of not complying with the orders passed by this Court.

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In fact, on 20^th June, 2014, when the present Official Liquidator was on leave, Mr. Reddy and Mr. Gupta, the two Deputy Official Liquidators were present before this Court to attend to the Official Liquidator's reports. Both the Deputy Official Liquidators had not even read the papers in the matters. In view thereof in one of the matters this Court passed the following order:

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“Since the Official Liquidator is on leave, Mr. Reddy and Mr. Gupta, the two Deputy Official Liquidators are present before the Court to attend to the Official Liquidator's Reports. Both the Deputy Official Liquidators have not read the papers in the above matter. In view thereof, instead of assisting the Court, they are making incorrect representations in the matter. In view thereof, place the Official Liquidator's Report/s for hearing when the Official Liquidator resumes his duties.”

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Apart from the above, this Court has in various matters observed that

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several officials from the Office of the Official Liquidator who are assigned with the matters coming up in Court from time to time have failed to implement the orders passed by the Court. The reasons for the same need not be set out hereunder, since the officials are very well aware as to the reasons for not acting on the same. I have also repeatedly observed that the Deputy Official Liquidators and the Assistant Official Liquidators are absolutely ignorant qua the provisions of the Companies Act and the Assistant Official Liquidators are not even Law Graduates which should be the minimum requirement for their appointment. These Deputy and the Assistant Official Liquidators due to their incompetence fail to appreciate the seriousness of the matter and that is also one of the reasons why they fail to take appropriate steps in the matter.

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Between the period Dr. T. Pandian ceased to be the Official Liquidator and Mr. S. Ramakantha was appointed as the Official Liquidator, Mr. Reddy was appointed as the in-charge Official Liquidator. During this period the working of the office of the Official Liquidator completely collapsed. Mr. Reddy would not attend to any of the proceedings in Court. Almost all the matters were handled only one Assistant Official Liquidator. The staff assisting the Assistant Official Liquidator in Court would possess knowledge of the amount

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of the bids even prior to the same being opened in Court. Two Assistant Official Liquidators who are qualified Advocates hardly attended to the matters in Court. The Advocates appearing before the Court repeatedly made a grievance that the entire office of the Official Liquidator would be deserted by 5.30 p.m. and no one would be available to assist them. The Advocates briefed in the matters to represent the Official Liquidator also complained that they were receiving briefs at 10.30 in the morning on the day the matter was placed for hearing and no instructions would be forthcoming from the office of the Official Liquidator. The above pathetic functioning of the working in the office of the Official Liquidator had to be brought to the notice of the Learned Chief Justice who was pleased to immediately appoint a Committee to look into and supervise the working of the office of the Official Liquidator. During the initial meetings of the Committee, even the Regional Director was requested to remain present and was apprised of the above state of affairs.

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Though with the appointment of Mr. S. Ramakantha, there seems to be some improvement, the office of the Official Liquidator needs a complete revamp. Officers like Mr. Reddy and Mr. Gupta are required to be forthwith transferred. The Ministry of Company and Corporate Affiars, New Delhi should ensure that the Officers who were appointed as Deputy and Assistant Official

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Liquidators are willing workers and well versed with the provisions of the Companies Act. In view thereof, a copy of this order shall immediately be forwarded to the Secretary, Ministry of Company and Corporate Affairs, New Delhi for immediate action.

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Mr. Reddy is called upon to show cause as to why except for writing two letters to the Directors of the Company – Amar Remedies Ltd. calling upon them to submit the statutory records, no action was taken by his office pursuant to his appointment as the provisional Liquidator of the Company by an order dated 31^st July, 2013. Mr. Reddy shall give his explanation on affidavit and appear before this Court on 12^th September, 2014.

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( S.J.KATHAWALLA, J. )

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M/S.Zigma Distributors Pvt.Ltd. v. M/S.Amar Remedies Ltd.,Cin NO.L99999MH1984PLC032687

Case brief

What is this about?

What did the court decide?

M/S.Zigma Distributors Pvt.Ltd. v. M/S.Amar Remedies Ltd.,Cin NO.L99999MH1984PLC032687

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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