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In The Matter Of Auto Tractors Ltd. - COMPANY PETITION No. 74 of 1999 [2006] RD-AH 7606 (12 April 2006)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).


In Chamber


In the matter of



Hon'ble Sunil Ambwani, J.

1. Present Shri Rajnath N. Shukla, learned counsel for the Official Liquidator; Shri S.K. Saxena, Official Liquidator; Shri Om Prakash Misra for Kotak Mahindra Bank Ltd.; Shri P.K. Venugopal, Chief Manager, Bank of Baroda, Pratapgarh; Shri Ravindra Sharma, Law Officer, Bank of Baroda, Allahabad; Shri Rakesh Misra for State Bank of Bikaner and Jaipur; Shri J. Nagar for LIC and Shri Dinesh Kakker holding brief of Shri  Rajesh Kumar Singh.

2. In pursuance to the order dated 1.3.2006, it is reported that the advertisements were published in 'Times of India' (English) New Delhi and Lucknow; 'Economics Time' (English), New Delhi; and 'Amar Ujala' Kanpur, Allahabad and Delhi,  inviting offers/bids for sale of the assets of  M/s Auto Tractors Ltd., the Company (In Liq.). The Official Liquidator reports that the inspections were carried out from 26.3.2006 to 28.3.2006 but no offer/bid has been received. He  has received copy of the writ petition  filed by Shri V.K. Tripathi & another vs. State of U.P. & others, at his residence on 11.4.2006 at 08.00 PM with information that the matter will come up before the Division Bench of Lucknow High Court on 12.4.2006.

3. Shri Dinesh Kakker, Advocate  holding brief of Shri Rajesh Kumar Singh, Advocate  states that they have received letter from Shri Vivek Raj Singh, Advocate, learned counsel for petitioner  that an application in  Writ Petition No. 3973  (MB) of 2001 was filed and in which, on an application for interim relief, the Division Bench has


been pleased to direct the Official Liquidator to appear in person on 17.4.2006 and to maintain the status quo in the matter of sale of the assets of Company (In Liq.).

4. A perusal of the prayers made in the writ petition, a copy of which is enclosed with the Official Liquidator's report,  shows that the petitioners, namely Shri V.K. Tripathi and another,  the teachers of A.T.L. Schools, Pratapgarh, have prayed that the advertisement of sale  of ATL Limited,  only with respect to school building mentioned against Lot No. 1 (A) and 1 (B) be quashed and that the Central Board for Secondary Education be directed not to withdraw the affiliation of ATL School, even if the factory of ATL Limited is sold to a prospective bidder.

5. The Court had, in its order 2.9.2005, noticed  the interim orders dated 16.9.2001 passed by Lucknow Bench of this Court in Writ Petition No. 3973 (MB) of 2001 by which a direction was issued that the school building  and auditorium be not sold out.  The Official Liquidator was then functioning as provisional Liquidator  vide orders dated 3.4.2001 before  winding up of the Company. The Company was wound up on 14.2.2003.

6. In the order winding up the company dated 14.2.2003, Shri U.N. Sharma, Advocate appearing on behalf of the society, which is running the school in the factory premises, had made a prayer on that day  that the school may not be dispossessed at that time. The prayer was allowed to be considered provided an undertaking on affidavit was furnished by the Principal as well as Manager of the School that vacant possession of the premises will be handed over to the Official Liquidator when the property is to be inspected by prospective buyers pursuant to the advertisement for sale. The current session as noticed


in the order of the year 2003, was going to  end and that  no new student was directed to be admitted. The School was allowed to be run only for existing students.  The Principal and Manager of the School did not file an affidavit of the efforts made to find out alternative accommodation, and thus  the orders were passed by the Court on 3.3.2003 directing the Official Liquidator to proceed to take over possession, evict unauthorized occupants take symbolic possession of the school, and thereafter proceedings were initiated for advertisement for sale. These orders have not been challenged and have become final.

7. Apart from the dues of about 3000 Ex workmen, the  dues of the secured creditors  against the Company (In Liquidation) are detailed as below;


Name of financial institutions (secured creditors)



Bank of Baroda

Rs. 8.42 Crores


State Bank of Bikaner and Jaipur

Rs. 2.06 Crores


Kotak Mahindra Bank Ltd.

All dues of State Bank of India have been assigned to Kotak Mahindra Bank Ltd



9.5 Crores



Not represented.

8. The manufacturing activity of the company came to close some times in the year 1998,  with cumulative losses of Rs. 71.77 crores as against the paid up capital of Rs. 7.50 crores. The Company  was found to be  commercially insolvent with no hope of revival. The Company or its creditors or workman or the Society running the School has not challenged the winding up order.


9. Let the Official Liquidator place these facts to Division Bench hearing the matter at Lucknow, and also inform that the Court had given almost three year's time to the Society to shift the school. The Manager of the Society and the Principal did not choose to file an undertaking nor made any efforts to shift the school from the building belonging to the company (In Liq). They appear to have continued to admit students despite the order dated 14.2.2003, and that at present there are only about 350 students in the school. The Official Liquidator may also place before the Court that Company Court has a statutory duty to protect  the interest of about 3000 ex workmen, secured creditors and unsecured creditors and further that process of sale and the payment of sale price,  will take not less than one year from the date of acceptance of the bid.    

10. Let the Official Liquidator also inform the Division Bench hearing the matter that today when the Court had invited bids in chambers, a large number of persons had come to the office of Official Liquidator  armed  with weapons and that PAC has to be deployed for safety of the staff and equipment in the  office. He may also inform that in the conditions prevailing, no person has made  a bid nor any bid has been received by post or by any other method.  The Company Court liquidating the Company is equally concerned with the students and shall protect their interest in accordance with law, and in case the Society approaches the court may consider to offer the assets to only those bidders who will allow the school to run with lease of school building or allow reasonable time to the school to shift. There is no apparent threat of eviction to the school, or disturbing the studies of the children, at all.

11. Having due regard to the judicial discipline the process of fresh advertisement  shall remain in abeyance till further orders of the


Division Bench, at Lucknow.

12. A copy of the order may be given to Shri Rajnath N. Shukla, learned counsel for the Official Liquidator by tomorrow.

13. List on 19.4.2006 for orders.




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