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IN THE MATTER OF M/S TRANSTEL LTD. AND OTHERS versus THE OFFICIAL LIQUIDATOR AND ORS

High Court of Judicature at Allahabad

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In The Matter Of M/S Transtel Ltd. And Others v. The Official Liquidator And Ors - COMPANY PETITION No. - 17 of 1988 [2007] RD-AH 16287 (4 October 2007)

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).

HIGH COURT OF JUDICATURE AT ALLAHABAD

Court No. 30

COMPANY PETITION NO. 17 OF 1988

In the matter of

M/s Krishna Paper Mills Limited (In Liquidation)

Hon'ble Sunil Ambwani, J.

Present Shri Anjani Kumar Mishra for IIBI Ltd; Shri V.K. Goel for Union Bank of India; Shri Anurag Khanna for PICUP; Shri Om Prakash Misra for Kotak Mahindra Bank Ltd., the assignee of the loans of State Bank of India and Shri Rajnath N. Shukla for Official Liquidator.

M/s Transtel Limited(In Liquidation) was wound up by the Court on 31.8.1987. One of the units of the Company (In Liquidation) namely M/s Krishna Paper Mills Ltd at Harchandpur District Rae Bareli, Uttar Pradesh was advertised and was sold to M/s E.S. Engineers for Rs. 2 crores. On payment of Rs. 60 lacs the sale was confirmed on 16.5.2001 with direction to pay rest of the amount in instalments. The order dated 15.12.1998 records on the report of the Official Liquidator that the entire amount was paid by that date.

Before the dividend could be declared, an application was filed by Industrial Investment Bank of India Ltd (IIBI Ltd) and another stating therein that M/s E.S. Engineers gave the unit on licence to M/s Sitapur Paper Mills on Rs. 12 lacs per year vide Licence Deed dated 12.4.1996 and thereafter agreed to sell the unit to M/s Sitapur Paper Mills Ltd on 2.4.1997. The IIBI sanctioned a loan of Rs. 7 crores on 8.7.1997 and disbursed a total amount of Rs. 6.21 crores in five instalments. Rs. 50 lacs was paid on 22.8.1997; Rs. 300 lacs on 26.8.1997; Rs. 150 lacs on 26.11.1997 and Rs. 75 lacs on 28.1.1998. It is contended that this amount was diverted by M/s Sitapur Paper Mills to M/s Chamundi Engineers Pvt Limited a non-existing company and then paid to the Official Liquidator. The statement, given to M/s Sitapur Paper Mills Ltd that it has paid Rs. 2 crores for purchase of boilers and Rs. 70 lacs for generator set, was found to be incorrect. A FIR was lodged with CBI which has found that part of the money was diverted for payment to the Official Liquidator. The IIBI Ltd is pressing the recovery of this money and seeks its recovery in the hands of the Official Liquidator.

The Official Liquidator sold the unit of M/s Krishna Paper Mills Ltd which is unit of the Company (In Liquidation) at Harchandpur, Rae Bareli under the supervision of the court. The sale was confirmed on 16.5.2001. The IIBI Ltd was required to give full and detailed facts with regard to repayment of the loans and steps taken for recovery of the loan from M/s Sitapur Paper Mills Ltd. The fact, the diversion of a part of the money paid by Shri Abid Zafarullah, Managing Director of M/s E.S. Engineers who is son of Mohamadd Zafarullah, could not make much difference so far as payment of money to the Official Liquidator is concerned. In any case before making any further enquiry the Court would like to satisfy with regard to the affidavits of IIBI Ltd and the steps taken to recover the money. The application was moved in the year 2001 and interim order was passed on 17.12.2002 staying the disbursement. The money is lying in the hands of Official Liquidator for last five years.

The secured creditors namely PICUP; SBI; Union Bank of India; PNB and UPFC have appeared and have prayed for disbursement. There is no good ground to further withhold the payment due to the secured creditors.

The Official Liquidator has not declared dividend so far. In order to declare interim dividend and make provisional payments subject to the bank guarantees to be given by the secured creditors until disposal of the application of the IIBI, the Official Liquidator must undertake the exercise of calculating dividend.

The OL is directed to complete the process of declaring dividend within a period of two weeks. He will submit a report on or before 29th October, 2007. The application of IIBI will also be heard and decided on that date. It will be open to Shri Anjani Kumar Mishra appearing for IIBI Ltd. to give entire details with regard to the status of the loan given to Sitapur Paper Mills Ltd.

Shri Om Prakash Misra appearing for Kotak Mahindra Bank Ltd states that the Bank is assignee of SBI and that the claim of SBI filed by Kotak Mahindra Bank Ltd may also be considered for the purposes of declaration of dividend. List on 29th October, 2007.

Dt.4.10.2007

RKP/-


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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