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2023 Supreme(Mad) 626
HIGH COURT OF JUDICATURE AT MADRAS
SENTHILKUMAR RAMAMOORTHY, J.
Ramco Super Leathers Ltd., Chennai & Another - Appellantss
Versus
Industrial Investment Bank of India Ltd., Represented by its Liquidator, Kolkata & Another - Respondents
Comp.A. No. 32 of 2022, 1106 of 2016 In Company Petition Nos. 502 of 2015, 239 of 2001 & Company Application Nos. 139 & 140 of 2021
Decided On : 23-03-2023
For the Applicants:P.S. Raman, Senior Counsel for M/s. P. Krishnan, KM. Aasim Shehzad, Advocates. For the Respondents:R1, Pamathri Sridhar, Official Liquidator, R2, H. Karthik Seshadri for M/s. Iyer & Thomas, R12, K. Ramanamoorthy, R14, M/s. Shivakumar & Suresh, Advocates.
Headnote:
Prayer: Application filed to permit the applicant company to sell its schedule mentioned properties in favour of Mr.Narayanan and his associates or his nominees M/s.R.Narayanan Infracon Pvt. Ltd., and his associates or his nominees, M.Sohanraj and his associates or his nominees and permit to made over 4th item schedule mentioned property in favour of Rukmani Narayanan or her nominee. - Companies (Court) Rules, 1959, Order XIV rule 8, section 9, 11B - The court discussed the implications of the Schemes not becoming effective, the nature of securities provided by the borrower to the lenders, and the rights of the secured creditors. The court concluded that the New Ramco Super Leathers is not entitled to bring the assets for sale and granted an injunction in favor of ARCIL for specific immovable and movable assets.
Fact of the Case:
The application was filed by Ramco Super Leathers Limited for permission to sell immovable assets. ARCIL sought disclosure of previously alienated assets by respondents 1 to 5 and to restrain them from alienating the assets described in the schedule to the Judge's summons. The court discussed the historical evolution of the company, the Schemes, and the implications of their ineffectiveness. The court also analyzed the nature of securities provided by the borrower to the lenders and the rights of the secured creditors.
Finding of the Court:
The court found that the Schemes did not become effective, and the textile division of RSL Industries continues to be a part of RSL Industries. The court concluded that the New Ramco Super Leathers is not entitled to bring the assets for sale and granted an injunction in favor of ARCIL for specific immovable and movable assets.
Issues: The issues included the effectiveness of the Schemes, the nature of securities provided by the borrower to the lenders, and the rights of the secured creditors.
Ratio Decidendi: The court's decision was based on the ineffectiveness of the Schemes, the nature of securities provided by the borrower to the lenders, and the rights of the secured creditors.
Final Decision: The court dismissed C.A. No.32 of 2022, directed Ramco Super Leathers Limited to disclose all material particulars of assets sold previously, and granted an injunction in favor of ARCIL for specific immovable and movable assets.
JUDGMENT
(Prayer: This Application is filed to permit the applicant company to sell its schedule mentioned item 1 to 3 properties in favour of Mr.Narayanan and his associates or his nominees M/s.R.Narayanan Infracon Pvt. Ltd., and his associates or his nominees, M.Sohanraj and his associates or his nominees and permit to made over 4th item schedule mentioned property in favour of Rukmani Narayanan or her nominee.)
In Comp.A.No.139 of 2021: This Application is filed under Order XIV rule 8 of O.S. rules r/w section 9, 11B of the Companies (Court) Rules, 1959, praying to:-
(a) This Application should not be treated as urgent ?
(b) This Hon''ble Court be not pleased to direct the respondents 1 to 5 to file an affidavit before this Hon''ble Court on various steps taken by them pursuant to order dated 29.01.2003 in CP.No.239 to 242 of 2001 and also disclose the list of assets already sold/auctioned/alienated and details of consideration if any received and manner in which the sale proceeds were distributed.
In Comp.A.No.140 of 2021: This Application is filed under Order XIV rule 8 of O.S. rules r/w section 9, 11B of the Companies (Court) Rules, 1959, praying to:-
(a) This Application should not be treated as urgent ?
(b) This Hon''ble Court be not pleased to pass an order of injunction restraining respondents 1 to 5 from in any manner alienating the assets more fully described in Schedule owned by the first respondent.)
Common Order
1. C.A.No.32 of 2022 was filed by Ramco Super Leathers Limited for permission to sell the immovable assets described in the schedule to the Judge''s summons. C.A.Nos.139 and 140 of 2021 were filed by the Asset Reconstruction Company of India Limited (ARCIL). By these applications, ARCIL seeks disclosure of the assets previously alienated by respondents 1 to 5 and to restrain the said respondents from alienating the assets described in the schedule to the Judge''s summons.
Background
2. On 27.08.1976, a company under the name and style of Ramco Super Leathers Limited (the Original Ramco Super Leathers) was incorporated. On or about 17.02.1995, the Original Ramco Super Leathers and George Bird Textiles Limited were amalgamated. The name of the resulting entity was changed to RSL Industries Limited (RSL Industries) on 21.03.1995. M/s.Vijayalakshmi Mills was merged with RSL Industries on 07.10.1997. On or about 19.06.1998, Ramco Super Leathers Private Limited was promoted and incorporated by the promoters of RSL Industries. The name of Ramco Super Leathers Private Limited was changed to Ramco Super Leathers Limited (the New Ramco Super Leathers) on or about 13.08.2001.
3. The Board of Directors of RSL Industries and RSL Textiles (India) Limited (RSL Textiles) approved of a scheme of arrangement (the Demerger Scheme) by which the textile division of RSL Industries would be demerged and merged with RSL Textiles. In order to obtain sanction for the Demerger Scheme, C.P.Nos.239 and 240 of 2001 were filed by the above mentioned entities. The said scheme of arrangement specified 01.10.2000 as the appointed date.
4. Similarly, the Board of Directors of RSL Industries and the New Ramco Super Leathers approved of a scheme of amalgamation(the Merger Scheme) whereby the assets of liabilities of RSL Industries would be transferred to and vested in the New Ramco Super Leathers and, as a consequence, RSL Industries would be dissolved without the process of winding up. The appointed date for this amalgamation was 01.01.2001. In order to obtain sanction for the Merger Scheme, the above mentioned companies filed C.P.Nos.241 and 242 of 2001.
5. Initially, by order dated 06.12.2001, both the Demerger and Merger Schemes (collectively, the Schemes) were sanctioned by this Court. Thereafter, on applications filed by various secured creditors of these companies (the SBI-led consortium), by order dated 29.01.2003, the earlier order sanctioning the Schemes was made subject to the approval of secured creditors. On appeal, by judgment dated 17.08.2
