HON’BLE SRI JUSTICE K. LAKSHMAN COMPANY APPLICATION Nos. 1348 OF 2005, 259, 561, 735 &

736 OF 2007 AND 969 OF 2014 IN COMPANY PETITION No.236 OF 1998

COMMON ORDER

Heard Mr. M. Anil Kumar, learned counsel for the Official Liquidator in COMPA No.561 of 2007 and respondent in COMPA No.969 of 2014, Mr. T. Surya Satish, learned counsel for the applicant in COMPA No.735 of 2007 and respondent Nos.2 and 3 in COMPA No.561 of 2007, Mr. V.S. Raju, learned counsel for the applicant in COMPA No.259 of 2007 and respondent in COMPA No.1348 of 2005 and Mr. Satish, learned counsel representing Mrs. Nandini S. Bilolikar, learned counsel for the applicant in COMPA No.969 of

2014 and respondent in COMPA No.561 of 2007.

2. Originally, all the above said Company Applications arise out of Company Petition No.236 of 1998 filed under Sections - 433 (e), 434 (1) (a) and 439 (1) (b) of the Companies Act, 1956 (for short ‘Act, 1956’), seeking winding up of M/s. Shree Jagannath Steels Limited (hereinafter referred to as “the Company”).

3. It is the case of the petitioner-Company that, under a lease agreement dated 19-04-1995, it supplied various items of equipment to the respondent-Company involving a net finance of Rs.70,00,000/-, on the terms that the respondent would pay a monthly lease rental of Rs.1,58,200/- in advance. The first instalment under the said agreement fell due on 19-04-1995, and the last instalment was agreed to be paid on 19-03-2000. In pursuance thereof, the respondent- Company had issued post-dated cheques towards the monthly instalments. The record discloses that the respondent-Company paid the instalments only up to October, 1996. Thereafter, the cheques presented for encashment were dishonoured, leading to termination of the lease agreement by the petitioner. As on 10-12-1998, the respondent stood indebted to the petitioner a sum of Rs.82,23,592/-, besides interest at the rate of 30% per annum with monthly rests as stipulated under the agreement. Despite repeated letters of demand (Exs.A3 to A7) and even after admitting its liability in its own correspondence (Exs.A8 to A10), the respondent failed and neglected to discharge the said dues. A legal notice dated 31-01-1998 (Ex.A13), duly served on 09-02-1998 (Ex.A14), also elicited no compliance.

4. The winding-up petition was admitted on 17.06.1999.

Substituted service was affected and notice was published. No objections were filed. An affidavit of evidence by one Mr. S.R. Ramesh Babu was filed with exhibits (Ex.A1 to A14). The Company was held commercially insolvent and the Official Liquidator (OL) was appointed by this Court vide order dated 07.09.1999.

5. The aforesaid Company Applications are filed by the applicants seeking various reliefs. The details of the same are as follows:

6. SUMMARY OF DOCKET ORDERS IN RESPECT OF COMPA No.1348 OF 2005 i) On 17.02.2006, this Court, while considering the application of the OL seeking permission to sell the assets of the Company under liquidation, directed that the sale notice be published in “Eenadu”

Telugu Daily (Hyderabad Edition) and in “The Indian Express” and “The Hindu” English Dailies (Chennai Edition). The application was accordingly ordered and the first respondent - Indian Bank was directed to deposit a sum of Rs.1,00,000/- within two weeks to meet advertisement and incidental expenses.

ii) On 28.04.2006, the matter was placed before this Court for confirmation of sale pursuant to the earlier order. The OL reported that auction was conducted and bids were received from 21 participants, the highest being that of Mr. Jitender Kedia, Hyderabad, for Rs.69,00,000/-. The Indian Bank, however, filed a report valuing the land alone at Rs.1,12,20,000/-, apart from the factory buildings valued at Rs.21,79,087/-. In view of this valuation and objection, the bid of Rs.69,00,000/- was not accepted, and the OL was directed to issue a fresh sale notice in “Dinamani” and “Dinamalar” (Tamil Dailies, Chennai and Thiruvallur Editions), and in “Eenadu” and “