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IN THE MATTER OF SIMBHAOLI SUGAR MILLS LTD

High Court of Judicature at Allahabad

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In The Matter Of Simbhaoli Sugar Mills Ltd - COMPANY APPLICATION No. 10 of 2004 [2004] RD-AH 758 (13 September 2004)

 

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 OF ALLAHABAD

Reserved

Company Application No. 10 of 2004

In the matter of

Section 391(1) read with Section 394 of the Companies Act

And

In the matter of

The Simbhaoli Sugar Mills Limited

A company incorporated under the Companies Act

Having its registered office at Simbhaoli-245207

District Ghaziabad..................................................Applicant

Hon'ble S.P. Mehrotra, J.

The present Company Application by summons as provided in Rule 67 of the Companies (Court) Rules, 1959 has been filed under Section 391(1) read with Section 394 of the Companies Act, 1956 by Simbhaoli Sugar Mills Limited having its registered office at Simbhaoli-245207, District Ghaziabad. The said Company has, hereinafter, been also referred to as "the Applicant Company".

It appears that the Applicant Company has proposed a Scheme of Restructuring, a copy whereof has been filed as Annexure-VI to the Company Application.

It is, interalia, prayed in the Company Application that a meeting of the Secured Creditors of the Applicant Company be called for the purpose of considering, and if thought fit, approving, with or without modifications, the proposed Scheme of Restructuring of Simbhaoli Sugar Mills Limited.

It is, interalia, further prayed that the directions be given as to the method of convening, holding and conducting of the said meeting of the Secured Creditors of the Applicant Company.

It is, interalia, further prayed that the convening of the meetings of the Shareholders of the Applicant Company and the Unsecured Creditors of the Applicant Company be dispensed with.

The said Company Application is supported by an affidavit of Sanjai Tapriya, stated to be the Director (Finance) and Company Secretary of the Applicant Company, sworn on 20.7.2004.

It is, interalia, stated in the Company Application that the Applicant Company was set-up in the year 1933 as a partnership firm with 400 tcd sugar plant at Simbhaoli, District Ghaziabad, Uttar Pradesh; and that the Applicant Company thereafter was incorporated as a private limited company in the year 1936; and that the registered office of the Applicant Company is at Simbhaoli, District Ghaziabad, Uttar Pradesh. Copy of the Certificate of Incorporation of the Applicant Company has been filed as Annexure-I to the Company Application.

It is, interalia, further stated in the  Company Application that the authorized share capital  of the Applicant Company is Rs. 27,00,00,000/- (Rupees twenty seven Crores only) divided into 1,80,00,000 equity shares of Rs. 10/- each and 9,00,000 cumulative redeemable preference shares of Rs. 100/- each; and that the paid-up share capital is Rs. 11.03 Crores of equity share capital and Rs. 8.12 Crores of Preference share capital.

The Main Objects of the Applicant Company are mentioned in paragraph 4 of the Company Application.

Copy of the Memorandum and Articles of Association of the Applicant Company has been filed as Annexure-II to the Company Application.

It is, interalia, further stated in the Company Application that the Applicant Company is being managed by the Board of Directors consisting of nine Directors, whose names are mentioned in paragraph 5 of the Company Application.

List of Secured Creditors of the Applicant Company and the outstanding secured debts on principal account as on March 31, 2003, being the cut-off date, for the purpose of financial restructuring of the Applicant Company has been given in paragraph 6 of the Company Application.

List of the Secured Creditors of the Applicant Company and the outstanding secured debt on principal account as on March 31, 2004, being the last audited Balance Sheet is given in paragraph 8 of the Company Application.

It may be mentioned that further details in regard to the Secured Creditors have been given in the Supplementary Affidavit sworn by Vijay Kumar Teotia on 29.7.2004, filed on behalf of the Applicant Company.

It is, interalia, stated in the said Supplementary Affidavit that there are 16 Institutional Secured Creditors of the Applicant Company, whose names are mentioned in paragraph 3 of the said Supplementary Affidavit.

It is, interalia, further stated in the said Supplementary Affidavit that "Other loans" of Rs. 7.64 lacs, mentioned in the list of secured loans set-out in paragraph 8 of the Company Application are Car loans taken by the Applicant Company from the Citi Bank (Rs. 4.87 lacs) and Allahabad Bank (Rs. 2.77 lacs); and that these loans advanced are secured against all Cars financed by the aforesaid creditors and their interests are not affected by the proposed Scheme of Restructuring.

It is, interalia, further stated that in-so-far as Members of the public holding debentures are concerned, all debentures held by individuals/members of the public have been redeemed by the Applicant Company; and that the Debentures were partly paid-up; and that as on 31st March, 2004, the Applicant Company is maintaining 368 Accounts of partly paid debentures which too have been redeemed but the monies standing therein could not be remitted on account of the failure of the individuals to produce the Instruments  for discharge; and that the IDBI is the Debenture Trustee for the aforesaid 368 Accounts.

Coming back again to the averments made in the Company Application, the details of the dues of the Applicant Company in respect of unsecured loans as on March 31, 2003 have been given in paragraph 7 of the Company Application.

It is, interalia, further stated in paragraph 7 of the Company Application that no restructuring is proposed in respect of the said unsecured loans.

It is, interalia, further stated in paragraph 9 of the Company Application that the Applicant Company commenced the business of manufacture of Sugar and its bi-products, and has been carrying on the said business activities since 1936.

The operating capacities of various Units of the Applicant Company are mentioned in paragraph 10 of the Company Application. The said Units of the Applicant Company have been stated to be Simbhaoli Sugar Division (SSD), Simbhaoli Distillery Division (SDD), Chilwari Sugar Division (CSD), and Simbhaoli Bio-manure Division (SBD).

It is, interalia, further stated in paragraph 11 of the Company Application that the Applicant Company has been regularly utilizing over 85% of its installed capacities.; and that it was performing well up to 1995, with operating margins consistent with other sugar factories of the U.P. State. However, it is, interalia, further stated in paragraph 11 of the Company Application, on account of higher interest costs and pressure of repayments, the Applicant Company has not been able to achieve the desired results; and that the prices of free sale sugar also went down very steeply after June, 2002 because of excess production in the country, which did not keep any co-relation with the rising raw material (sugarcane) prices.

It is, interalia, further stated in paragraph 12 of the Company Application that in 1995, the Applicant Company started a green field sugar plant of 3125 TCD capacity at Chilwaria, District Bahraich in East Uttar Pradesh, which was hived off as an independent Company, Chilwaria Sugar Limited (CSL), to facilitate the participation of M/s Tate & Lyle Plc. U.K.; and that the sugar plant faced teething problems in initial years of its operations, which are normal to a sugar mill, and achieved a below expectation performance; and that on account of its global reasons, Tate & Lyle Plc. divested its 50% shareholding in CSL to the Applicant Company in 1999, which made CSL a wholly owned subsidiary of the Applicant Company from 1999 onwards; and that in order to revive the CSL operations, the Applicant Company had to invest an additional amount of over Rs. 9 Crores in CSL in 2000 and 2001, which was used towards the payment of overdue liability to farmers towards sugarcane supply etc..

It is, interalia, further stated in paragraph 13 of the Company Application that in order to achieve benefits of synergy of sugar operations in a common company, CSL was merged with the Applicant Company in 2002 by the order of the Court, and became a unit of the Applicant Company, namely, Chilwaria Sugar Division (CSD); and that CSD's operational performance has shown a turnaround after the merger, and first time it achieved a cash break even in the year ending on March 31, 2004; and that, however, the fall in sugar prices also affected CSD, which created liquidity problems.

It is, interalia, further stated in paragraph 14 of the Company Application that the investment by the Applicant Company in CSL affected the financials of the Applicant Company adversely; and that due to the diversion of funds to CSL, the Applicant Company faced liquidity constraints in its sugar operations; and that the financial results of CSD has been the major reason of losses incurred by the Applicant Company in the years 2001-02 and 2002-03.

It is, interalia, stated in paragraph 15 of the Company Application that the Applicant Company has been paying very high interest on its borrowings; and that during the year 2001-02, it paid an average interest charge of over 15.75% p.a. to its lenders, which is substantially higher in comparison with other sugar mills; and that in fact, the additional interest paid by the Applicant Company is almost equal to its repayment obligations; and that the repayments for the term loans had also begun during this time, which the Applicant Company was not in a position to pay on account of lower sugar prices and higher financing costs.

It is, interalia, stated in paragraph 16 of the Company Application that for the reasons mentioned above, the Applicant Company incurred a loss of Rs. 10.65 crores in 2001-02 (Cash loss Rs. 3.45 crores) and a loss of Rs. 24.24 crores in 2002-03 (Cash loss Rs. 14.46 crores); and that on account of these losses, steps taken for revival of CSD and un-remunerative sugar operations, the overall debt burden of the Applicant Company became unserviceable in the context of current performance of the Applicant Company's business; and that it was and is, therefore, felt that unless the debts of the Applicant Company are restructured, it shall never be able to meet its obligations and the survival of the Applicant Company will be jeopardized; and that it was, therefore, considered necessary by the Applicant Company and its lenders to carry out a financial restructuring of the Applicant Company including restructuring of debts in such a manner that the financial problems of the Applicant Company are addressed to.

It is, interalia, further stated in paragraph 17 of the Company Application that in pursuance to the aforesaid, the State Bank of India through its Industrial Finance Branch, New Delhi Branch, the leader of the working capital consortium of the Applicant Company, drafted a "Scheme of Restructuring" in respect of financials of the Applicant Company (hereinafter also referred to as "SBI's Scheme of Restructuring") under Corporate Debt Restructuring Mechanism (CDR Mechanism) and submitted that to the Corporate Debt Restructuring Forum (CDR Forum) set-up by the Reserve Bank of India.

It is, interalia, further stated in paragraph 17 of the Company Application that SBI's Scheme of Restructuring is a restructuring package in respect of the Applicant Company, which involves the rephasing of repayment of existing term loans and debentures, reduction in the cost of funds and induction of fresh funds to the extent of erosion in working capital of the Applicant Company.

The main features of the SBI's Scheme of Restructuring are mentioned in paragraph 18 of the Company

Application.

It is, interalia, stated in paragraph 19 of the Company Application that the Corporate Debt Restructuring Mechanism ("CDR Mechanism") has been set-up by the Reserve Bank of India by its Circular No. DBS.FID.No. C-2/01.11.00/2001-02 dated August 23, 2001 for ensuring a timely and transparent mechanism for restructuring of the Corporate Debt of viable corporate entities affected by internal or external factors, outside the purview of Board for Industrial and Financial Reconstruction (BIFR), Debt Recovery Tribunal (DRT) and other legal proceedings, for the benefit of all concerned; and that the CDR mechanism applies only to multiple banking/syndicates/ consortium accounts with outstanding exposure of Rs. 20 Crores and above with banks and financial institutions.

It is, interalia, stated in paragraph 20 of the Company Application that in accordance with the guidelines laid down by the Reserve Bank of India, the State Bank of India  had drafted the aforementioned SBI's Scheme of Restructuring of the Applicant Company's secured debts, which was to be implemented through CDR mechanism; and that the Corporate Debt Restructuring Empowered Group (CDREG) deliberated upon the same in its meeting held on June 23, 2003; and that a final report was circulated to the lenders on acceptance of the broad terms by all the lenders, which was approved in CDREG in its meeting held on September 15, 2003 as per letter No. 2345 dated September 24, 2003; and that the SBI's Scheme of Restructuring was drafted taking into account the concerns of all the lenders and also revival of agro based industry on which fate of thousands of farmers and workers was associated.

It is, interalia, further stated in paragraph 21 of the Company Application that subsequent to the approval at CDREG, all participating lenders have also expressed their respective approvals to the SBI's Scheme of Restructuring, as per the details given in the said paragraph 21 of the Company Application.

Copies of the minutes of CDREG meetings and approvals from lenders have been filed as Annexure III(a) to III(i) to the Company Application.

It is, interalia, further stated in paragraph 22 of the Company Application that the  Unit Trust of India (UTI), one of the Secured Creditors to the Applicant Company, is the holder of  44,13,451 Non Convertible Debentures (NCDs) in the Applicant Company, having a value of Rs. 22,06,72,550 (13.52% of the total secured debts as on 31.3.2003 and 10.85% of the total secured debts as on March 31, 2004). The manner, in which the said Non Convertible Debentures held by the Unit Trust of India are secured, has also been stated in paragraph 22 of the Company Application.

It is, interalia, stated in paragraph 23 of the Company Application that the Unit Trust of India also participated in the meetings called for discussing the SBI's Scheme of Restructuring at CRDEG, and a copy of the letter approving restructuring under CDR mechanism was communicated to Unit Trust of India on October 9, 2003; and that however, the Unit Trust of India did not agree to restructuring as communicated vide its letter dated November 17, 2003.

Copies of the letters from the Applicant Company (Simbhaoli Sugar Mills Limited) to Unit Trust of India and the response of the Unit Trust of India are enclosed as Annexures IV(a) to IV(c) to  the Company Application.

It is, interalia, further stated in paragraph 25 of the Company Application that the Unit Trust of India made the aforesaid investments in the year 1995 by purchasing the said Non Convertible Debentures under the Right cum Public issue of the Applicant Company; and that the amount received from Unit Trust of India utilized to part finance the expansion of the existing Sugar Unit at Simbhaoli and setting up of a new Sugar Unit at Chilwaria for the manufacture of white crystal sugar, as stated in the offer documents issued at that time; and that  loans from other lenders were also raised at the same time for similar purposes; and that thus, since inception the money raised from the Unit Trust of India, alongwith the other lenders, was used for certain projects of the Applicant Company.

It is pertinent to mention at this stage that alongwith the Company Application, the Applicant Company has also filed an application under Section 391(6) of the Companies Act, 1956 read with Rules 6 and 9 of the Companies (Court) Rules, 1959. The said application is at page 133 of the Paper Book of the Company Application and has hereinafter been also referred to as "the said Stay Application".

It is, interalia, stated in the said Stay Application that despite knowing fully well that the Applicant Company is proposing a restructuring plan for repayment of its financial liabilities and being aware that other secured creditors have approved the Scheme of Restructuring under CDR mechanism, Unit Trust of India has gone ahead and filed an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 being O.A. No. 69 of 2004, before the Debts Recovery Tribunal, Lucknow against the Applicant Company . Copy of the said O.A. No. 69 of 2004 has been filed as Annexure-A-1 to the said Stay Application.

It is, interalia, prayed in the said Stay Application that continuation of the proceedings of the said O.A. No. 69 of 2004 titled as The Administrator of Specified Undertaking of Unit Trust of India and Another Versus M/s Simbhaoli Sugar Mills Limited and Another, pending before the Debts Recovery Tribunal, Lucknow be stayed.

Coming back again to the averments made in the Company Application, it is, interalia, stated in paragraph 24 of the Company Application that 2,20,000 Non Convertible Debentures having aggregate value of Rs. 110 lacs are held by ICICI Bank; and that ICICI Bank has agreed to restructure the said 2,20,000 Non Convertible Debentures.

It is, interalia, stated in paragraph 26 of the Company Application that the Indian Sugar Industry was also subjected to recession from 1996-97 onwards.

It is, interalia, stated in paragraph 27 of the Company Application that after the SBI's Scheme of Restructuring was accepted by the CDR Forum, the Board of Directors of the Applicant Company prepared the proposed Scheme of Restructuring between the Applicant Company and its Secured Creditors, which is in line with the SBI's Scheme of Restructuring as accepted by the CDR Forum so that, it can be implemented by all the lenders in given manner and revival of the Applicant Company be achieved.

Copy of the said Scheme of Restructuring, as already noted, has been filed as Annexure-VI to the Company Application.

It is, interalia, further stated in paragraph 29 of the Company Application that the Board of Directors of the Applicant Company in its meeting held on June 30, 2004 approved the proposed Scheme of Restructuring based on the SBI's Scheme of Restructuring between the Applicant Company and its Secured Creditors.

Copy of the Resolution passed in this behalf by the Board of Directors of the Applicant Company in its meeting held on June 30, 2004 has been filed as Annexure-V to the Company Application.

Paragraph 30, sub-paras (i) to (xviii), interalia, mention the relevant provisions of the proposed Scheme of Restructuring (Annexure-VI to the Company Application) in regard to the manner of restructuring with the Secured Creditors.

Sub-paras (vi) and (viii) of paragraph 30 of the Company Application, interalia, deal with the manner of restructuring of the debenture liability due to Unit Trust of India.

It is, interalia, stated in paragraph 31 of the Company Application that the averments made in paragraph 30 of the Company Application show that the proposed Scheme of Restructuring also provides for restructuring of dues to Unit Trust of India, debenture holder, and it will not have any adverse effect on the interest of Debenture Trustee, as Public Portion of Debentures has already been redeemed.

It is, interalia, further stated in paragraph 28 of the Company Application that the non-acceptance of the proposed Scheme of Restructuring by the Unit Trust of India, shall cause extreme hardships to the Applicant Company, its lenders, farmers, workers etc..

It is, interalia, stated in paragraph 34 of the Company Application that there are no investigations or proceedings pending against the Applicant Company.

It is, interalia, stated in paragraph 37 of the Company Application that no person will be prejudiced, if the orders , as prayed for in the Company Application, are made and directions, as sought for, are given.

It is, interalia, stated in paragraph 38 of the Company Application that the Company Application is made bonafide and for the ends of justice.

It is, interalia, stated in paragraph 32 of the Company Application that the Equity Shares of the Applicant Company are listed on the Stock Exchange, Mumbai.

It is, interalia, further stated in paragraph 33 of the Company Application that the proposed Scheme of Restructuring  will in no way cast any additional burden on the shareholders of the Applicant Company. In the circumstances, it is, interalia, prayed in paragraph 33 of the Company Application that convening of the meeting of the shareholders of the Applicant Company for considering the proposed Scheme of Restructuring be dispensed with.

It is, interalia, further stated in paragraph 33 of the Company Application that the proposed Scheme of Restructuring will not have any impact on the interest of the unsecured creditors. In the circumstances, it is, interalia, prayed in paragraph 33 of the Company Application that convening of the meeting of the Unsecured Creditors of the Applicant Company for considering the proposed Scheme of Restructuring be dispensed with.

It is, interalia, further stated in paragraph 39 of the Company Application that in view of the facts and circumstances stated in the Company Application, it is just, expedient and necessary that the meeting of the Secured Creditors be called to consider and approve the proposed Scheme of Restructuring.

I have heard Shri Naveen Sinha, learned Senior Counsel assisted by Shri Yashwant Verma, learned counsel for the Applicant Company.

It is submitted by Shri Naveen Sinha, learned Senior Counsel that having regard to the averments made in the Company Application and its supporting affidavit, as also in the Supplementary Affidavit sworn on 29.7.2004, the prayers made in the Company Application be granted.

As regards the non-acceptance of the SBI's Scheme of Restructuring by the Unit Trust of India, and the filing of the said O.A. No. 69 of 2004 before the Debts Recovery Tribunal, Lucknow by the Unit Trust of India against the Applicant Company, it is submitted by Shri Naveen Sinha, learned Senior Counsel that in case the meeting of the Secured Creditors  of the Applicant Company is convened, as prayed for in the Company Application, it will be open to the Unit Trust of India, being a Secured Creditor of the Applicant Company, to raise objection, if any,  to the proposed Scheme of Restructuring, in the meeting to be convened, and thereafter, before this Court at the time of consideration of the Petition for confirmation of the proposed Scheme of Restructuring.

I have considered the submissions made by Shri Naveen Sinha, learned Senior Counsel appearing for the Applicant Company, and perused the averments made in the Company Application and its supporting affidavit as also in the Supplementary Affidavit sworn on 29.7.2004.

Taking up first the question of convening the meeting of the shareholders of the Applicant Company for consideration of the proposed Scheme of Restructuring, it is pertinent to note that in paragraph 33 of the Company Application, it is, interalia, stated that the proposed Scheme of Restructuring will in no way cast any additional burden on the shareholders of the Applicant Company.

In view of the facts and circumstances stated above, particularly in view of the said averments made in paragraph 33 of the Company Application, namely, that the proposed Scheme of Restructuring will in no way cast any additional burden on the shareholders of the Applicant Company, I am of the opinion that it is not necessary to call meeting of the shareholders of the Applicant Company for consideration of the proposed Scheme of Restructuring, as per the requirements of Section 391(1) and (2) read with Section 393 of the Companies Act, 1956. In the circumstances, the requirement for holding the meeting of the shareholders of the Applicant Company for consideration of the proposed Scheme of Restructuring, as per the requirements of Section 391(1)  and (2) read with Section 393 of the Companies Act, 1956, is dispensed with.

Coming next to the question of convening the meeting of the unsecured creditors of the Applicant Company for consideration of the proposed Scheme of Restructuring, it is pertinent to note that in paragraph 7 of the Company Application, it is, interalia, stated that no restructuring of the unsecured loans is proposed. It is, interalia, further stated in paragraph 33 of the Company Application that the proposed Scheme of Restructuring will not have any impact on the interest of the unsecured creditors.

In view of the facts and circumstances stated above, particularly in view of the  said averments made in paragraphs 7 and 33 of the Company Application, namely, that no restructuring is proposed in respect of the unsecured loans of the Applicant Company, and that the proposed Scheme of Restructuring will not have any impact on the interest of the unsecured creditors, I am of the opinion that it is not necessary to call meeting of the unsecured creditors  of the Applicant Company for consideration of the proposed Scheme of Restructuring, as per the requirements of Section 391(1) and (2) read with Section 393 of the Companies Act, 1956. In the circumstances, the requirement for holding the meeting of the unsecured creditors of the Applicant Company for consideration of the proposed Scheme of Restructuring, as per the requirements of Section 391(1) and (2) read with Section 393 of the Companies Act, 1956, is dispensed with.

Let us now consider the question of convening the meeting of the Secured Creditors of the Applicant Company for consideration of the proposed Scheme of Restructuring.

As already noted, it is, interalia, prayed in paragraph 39 of the Company Application that a meeting of the Secured Creditors be called to consider and approve the proposed Scheme of Restructuring.

However, as mentioned above, the Unit Trust of India has not agreed to the SBI's Scheme of Restructuring. It has also been noted above that the averments made in the said Stay Application filed by the Applicant Company alongwith the Company Application show that the Unit Trust of India has already filed an application under Section 19 of the Recovery of Dues to Banks and Financial Institutions Act, 1993 being O.A. No. 69 of 2004 before the Debts Recovery Tribunal, Lucknow against the Applicant Company.

Shri Naveen Sinha, learned Senior Counsel, as mentioned above, submits that in case the meeting of the Secured Creditors of the Applicant Company is convened, as prayed for in the Company Application, it will be open to the Unit Trust of India, being a Secured Creditor of the Applicant Company, to raise objection, if any, to the proposed Scheme of Restructuring, in the meeting to be convened, and thereafter, before this Court at the time of consideration of the Petition for confirmation of the proposed Scheme of Restructuring.

I have considered the facts and circumstances of the case, and the submissions made by Shri Naveen Sinha, learned Senior Counsel appearing  for the Applicant Company.

Having regard to the facts and circumstances of the case and having considered  the submissions made by Shri Naveen Sinha, learned Senior Counsel appearing for the Applicant Company, I am of the opinion that it is necessary to convene the meeting of the Secured Creditors of the Applicant Company, as per the requirements of Section 391(1) and (2) read with Section 393 of the Companies Act, 1956 for the purpose of considering, and if thought fit, approving, with or without modifications, the proposed Scheme of Restructuring. It is further made clear that the convening of the said meeting of the Secured Creditors of the Applicant Company will be without prejudice to the rights of the Unit Trust of India as involved in the said O.A. No. 69 of 2004 (The Administrator of Specified Undertaking of Unit Trust of India and Another Versus M/s Simbhaoli Sugar Mills Limited and Another) pending before the Debts Recovery Tribunal, Lucknow.

It is accordingly ordered as follows:

Upon the application of the company Simbhaoli Sugar Mills Limited (hereinafter referred to as "the Applicant Company") having its Registered Office at Simbhaoli , District Ghaziabad - 245207 in the State of Uttar Pradesh,  by summons presented on the  21st  day of  July, 2004, and upon hearing Shri Naveen Sinha, Senior Advocate assisted by Shri Yashwant Verma,  Advocate, for the Applicant Company, and upon reading the application, Exhibits thereto, and the affidavits in support thereof (Exhibit /Annexure-VI at page 115 of the Paper Book of the Company Application  being a  copy of the proposed scheme of restructuring).

IT IS ORDERED

That for the purpose of considering, and if thought fit, for approving, with or without modification, the proposed scheme of restructuring, it is necessary to have meeting of the Secured Creditors of the Applicant Company.

That meeting of the Secured Creditors of the Applicant Company  will be convened and held at the Registered Office of the Applicant Company at Simbhaoli , District Ghaziabad - 245207 on 6th day of November, 2004 (Saturday) at 11.00 O'clock in the forenoon for the purpose of considering, and if thought fit, approving, with or without modifications, the proposed scheme of restructuring.

That at least 21 clear days before the day appointed for the meeting of the Secured Creditors of the Applicant Company  to be held as aforesaid, a notice convening the said meeting at the place and time aforesaid, together with the copies of the said scheme and of the statement required to be furnished pursuant to Section 393 of the Companies Act, 1956, and the prescribed form of proxy, shall be sent by pre-paid  letter post under certificate of posting, addressed to each of the secured creditors of the Applicant Company  aforesaid at their respective registered or last known addresses.

That, in addition, at least 21 clear days before the day appointed for the meeting of the Secured Creditors of the Applicant Company, as aforesaid, an advertisement convening the said meeting and stating that copies of the said scheme together with the copy of the statement required to be sent under section 393 of the Companies Act, 1956 and the prescribed forms of proxy can be obtained free of charge at the Registered Office of the Applicant Company, shall be published in the daily national newspapers, one in English may be published in Times of India, published from Delhi   and the other  in Hindi may be published in Dainik Jagran, published from Meerut  in its Ghaziabad Edition.

That for the purposes of conducting the meeting of the secured creditors of the Applicant Company, the Court hereby appoints Shri Rajeev Sharma, Advocate (Telephone No. 2640424), as the Chairman  and Shri Vivek Kumar Birla, Advocate (Telephone No. 2623206) as the alternate Chairman. The Chairman will be paid Rs. 30,000/- plus incidental expenses and the alternate Chairman will be paid Rs.15,000/- plus incidental expenses, in addition, the expenses of the journey and stay in respectable hotel being taken care of.

That the Chairman appointed for the meeting will issue the advertisement and send out the notices of the meeting referred to above.

That the Chairman will add an Explanatory Statement in the advertisement as well as the notices of the meeting to be issued/sent, as mentioned above, to the effect that the convening of the meeting will be without prejudice to the rights of the Unit Trust of India as involved in the said O.A. No. 69 of 2004 (The Administrator of Specified Undertaking of Unit Trust of India and Another Versus M/s Simbhaoli Sugar Mills Limited and Another) pending before the Debts Recovery Tribunal, Lucknow.

That the quorum for the said meeting of the Secured Creditors of the Applicant Company   to be held as aforesaid shall be 9 by number and 60% by value of the secured creditors of the Applicant Company  present either personally or by proxy.

That voting by proxy shall be permitted, provided that a proxy in the prescribed form duly signed by the person entitled to attend and vote at the meeting, is filed with the Applicant Company at its registered office not later than 48 hours before the meeting.

That the value of each secured creditor shall be in accordance with the books of the Applicant Company  and, where the entries in the books are disputed, the Chairman shall determine the value for purposes of the meeting.

AND IT IS FURTHER ORDERED that the Chairman will report to this Court the result of the said meeting within two weeks of the conclusion of the meeting, and the report shall be verified by his affidavit.

List for orders on 2.12.2004.

Dated : 13.9.04

MS

Company Judge


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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