Kohinoor Foods Ltd v. J.K.Synthetics Ltd. & Ors

T.S. THAKUR,J ARUNA SURESH, J APRIL 11, 2008 anb

* IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4979/2007 Date of Decision: 11 th APRIL, 2008 KOHINOOR FOODS LTD. ..... Petitioner Through : Mr. G.L. Rawal, Sr. Adv. with Mr. Rajes Rawal, Mr.Arvind Kumar Jha, Advs. versus J.K.SYNTHETICS LTD. & ORS. ..... Respondents Through : Ms. Manisha Dhir, Adv. with Mr.R.S. Paliwal, Adv. for R-1 Mr. Manmohan, Sr. Adv. with Ms. Geeta Sharma, Adv.for R-2 + W.P.(C) 5105/2007 UMA NAIDU ..... Petitioner Through : Mr. Ravi Gupta, Adv. versus ASSETS SALE COMMITTEE J.K.SYNTHETICS LTD. & ANR. ....Respondents Through : Ms. Manisha Dhir, Adv. with Mr.R.S. Paliwal, Adv. for R-1 Mr. Manmohan, Sr. Adv. with Ms. Geeta Sharma, Adv.for R-2 + W.P.(C) 5106/2007 S.K.GARG ..... Petitioner Through : Mr. Ravi Gupta, Adv. versus ASSETS SALE COMMITTEE, J.K.SYNTHETICS LTD. & ANR. .... Respondents Through : Ms. Manisha Dhir, Adv. with Mr.R.S. Paliwal, Adv. for R-1 Mr. Manmohan, Sr. Adv. with Ms. Geeta Sharma, Adv.for R-2 + W.P.(C) 5107/2007 P.S.KARTHIKEYAN ..... Petitioner Through : Mr. Ravi Gupta, Adv. versus ASSETS SALE COMMITTEE, J.K.SYNTHETICS LTD. & ANR. .... Respondents Through : Ms. Manisha Dhir, Adv. with Mr.R.S. Paliwal, Adv. for R-1 Mr. Manmohan, Sr. Adv. with Ms. Geeta Sharma, Adv.for R-2 CORAM: HON'BLE MR. JUSTICE T.S. THAKUR HON'BLE MS. JUSTICE ARUNA SURESH 1. Whether reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes T.S. Thakur, J M/s J. K. Synthetics Ltd. is a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985, hereinafter called 'SICA' for short. A scheme for its rehabilitation appears to have been approved under the provisions of the Act by the Appellate Authority for Industrial and Financial Reconstruction. By an order dated 21st January, 2003 passed in Appeal No. 301/2000 arising out of BIFR Case No. 22/98, the AAIFR constituted what is described as an Assets Sales Committee for the sale of surplus assets of the sick company by inviting offers through advertisements. The Committee comprised a representative of the IDBI, the operating agency, the Managing Director or Executive Director of a sick company and a representative of the State Bank of India which happens to be the lead bank. The AAIFR also authorized the Assets Sales Committee to formulate the procedure for disposal of the surplus assets and to submit a report on the same to the BIFR who was then to take a decision in the matter in accordance with law. The relevant portion of the order passed by the AAIFR reads: "As regards Jhalawar unit, it was admitted by the learned counsel for the appellant with instructions from two Senior Vice-Presidents of the company and was not disputed by others that none of the units comprising Jhalawar unit are vi8abl, are lying closed since long and cannot be revived and that these should be disposed of and their sale proceeds realised and distributed among other creditors and towards other liabilities of company. We are satisfied that the Jhalawar units are unviable and cannot be revived. These units along with some other surplus assets i.e. four flats and guest house situated at Mumbai and flats in Delhi and Amjher Palace at Kota be disposed off. We accordingly constituted an Assets Sale Committee comprising of the representatives of IDBI – OA, Managing Director or Executive Director of the appellant company and a representative of State Bank of India, the lead bank. The Assets Sale Committee shall formulate the procedure for disposal of these assets by inviting offers through advertisement and submit its report thereon to the BIFR who will take a decision in the matter in accordance with law."(para 50) 2. The Assets Sale Committee accordingly issued advertisements and invited bids from intending purchasers of the surplus assets that comprised four flats and a guest house situated in Mumbai, Flats in Delhi and Ajmer Palace at Kota. In respon