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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SHARMILA U.DESHMUKH
Grand View Estates Private Limited – Appellant
Versus
Official Liquidator of the Swadeshi Mills Company Limited (in liqn.) – Respondent
| Table of Content |
|---|
| 1. company wound up after sickness; assets sold partially. (Para 1 , 2 , 3 , 4) |
| 2. revival scheme defers secured debts, diversifies to real estate. (Para 5 , 6) |
| 3. stakeholders support plan; minority opposes as unchanged. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 4. changed circumstances satisfy revival tests; public interest served. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 5. inflated claims, no revival; auction maximizes value. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 6. secured creditor stands outside; interest not capped. (Para 31 , 32 , 33) |
| 7. ol details impediments; workers favor settlement over liquidation. (Para 34 , 35 , 36 , 37 , 38) |
| 8. section 466 stay requires bona fides, morality, public interest. (Para 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51) |
| 9. prior revival bids rejected for asset grab intent. (Para 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68) |
| 10. dividend acceptance shows relinquished security, inflated claims. (Para 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82) |
| 11. no shareholder-informed consent; deferred payments lack morality. (Para 83 , 84 , 85 , 86 , 87 , 88 , 8 |
Stay of winding-up under s.466 Companies Act, 1956 demands revival proposal satisfy bona fides, commercial morality, public interest; real estate diversification on mill land rejected as ruse for maj....
The court emphasized that discretion under Section 466 of the Companies Act must consider public interest and prior judicial findings, not merely creditor consent.
The court has the discretion to recall winding-up orders under the Companies Act if the applicant satisfies creditor debts and presents a bona fide revival scheme, emphasizing the importance of compl....
Winding-up proceedings can be stayed when shareholders resolve disputes and provide adequate financial guarantees to settle potential liabilities, allowing for a company's revival.
Revival of a company in liquidation requires adherence to statutory provisions, particularly time limits, and motives for reviving cannot be deemed bona fide when driven by asset value.
The court emphasized that a stay of winding up must protect the rights of all creditors and cannot create undue preference for one creditor, requiring evidence of commercial solvency post-stay.
Court emphasized that revival schemes for companies in liquidation must adhere to statutory compliance, as any unauthorized share transfer renders the scheme void.
Winding up petitions require justifiable grounds; availability of alternative remedies can lead to dismissal.
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