Notice of Motion No. 2287 of 1991 in Suit No. 468 of 1990. Case: Industrial Development Bank of India Vs Nira Pulp and Paper Mills Ltd. and others. High Court of Bombay (India)
| Case Number | Notice of Motion No. 2287 of 1991 in Suit No. 468 of 1990 |
| Counsel | For Appellant: Virag Tulzapurkar, Adv. and For Respondents: Zaiwalla, S.J. Thacker, F. Sikander, Umesh Shetty and Mrs. Rekha Pendharkar, Advs. |
| Judges | S.M. Jhunjhunuwala, J. |
| Issue | Sick Industrial Companies Act, 1985 - Sections 3(1), 15, 16, 17, 22, 22(1), 25 |
| Judgement Date | December 18, 1991 |
| Court | High Court of Bombay (India) |
Judgment:
S.M. Jhunjhunwala J.
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In the suit filed by the plaintiffs to recover from defendants Nos. 1, 2 and 3, the sum of Rs. 12,90,56,879 with interest due thereon and for enforcement and sale of mortgaged and hypothecated securities and for other reliefs as mentioned in the plaint, defendants Nos. 1, 2 and 3 have taken out the present notice of motion for discharge of the receiver appointed by this court on February 13, 1990, and in the alternative, for directions to the receiver to hand back to the first defendants the possession of the first defendant's factory premises taken on August 12, 1991. It is also prayed that the sum of Rs. 20 lakhs deposited by the second defendant and lying in this court should not be disbursed but should be utilised in such manner as may be directed by BIFR for rehabilitation of the first defendants.
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Since, according to the plaintiffs, the first defendant has been in tremendous financial difficulties, their net worth having become negative, their liabilities being far in excess of the real assets, their share capital having been wiped out and they having stopped carrying on any business, the plaintiffs had taken out notice of motion bearing No. 479 of 1990, in this suit for appointment of the court receiver, High Court, Bombay, as receiver of the mortgaged properties described in the schedule, exhibit A, to the plaint, movables described in the schedule, exhibit B, to the plaint and current assets described in the schedule, exhibit C, to the plaint (hereinafter referred to as "the suit properties") with all powers under Order XL, rule 1 of the Code of Civil Procedure, 1908, including the powers to sell the said movables and current assets described in the schedules, exhibit B and C, to the plaint and to pay over the net sale proceeds and/or net recovery thereof to the plaintiffs in or towards their claim in the suit and also for an order of injunction restraining the first defendant by themselves, their servants and agents from in any manner disposing of or alienating or transferring or parting with possession of or creating any third party title or interest in respect of the suit properties. On February 13, 1990, Cazi J., appointed ad interim receiver in terms of prayer (a) of the said notice of motion excluding the power of sale. Accordingly, by the said order dated February 13, 1990, the court receiver, High Court, Bombay, was appointed the receiver of the suit properties without the power of sale and with directions to him not to dispossess the first defendant provided the first defendant entered into an agreement with usual terms and conditions with the receiver without security. An ad interim injunction in terms of prayer (b) of the said notice of motion restraining the first defendants from in any manner disposing of or alienating or transferring or parting with possession or creating any third party rights in respect of the suit properties except in the ordinary course of business was also granted. An appeal from the said order dated February 13, 1990, was preferred by the first defendant and on February 21, 1990, Mukherjee C.J. and Sugla J. upheld the order of Cazi J., subject to modification that pending the hearing and final disposal of the notice of motion, the receiver was directed not to put up his board. Compensation payable by the first defendant was ordered to be determined but was ordered not to be payable for a period of three weeks from that date. Accordingly, the receiver took possession of the suit properties situated at sub-village Vadvali, Village Rajawadi, Taluka Khandala, Sub-District Phaltan, District Satara, on February 23, 1990, and took inventory of the suit plant and machinery and other movables. The first defendant agreed and undertook to hold the suit properties as agents of the receiver. The receiver fixed the royalty amount payable by the first defendants for the use and occupation of the suit properties as agents of the receiver at Rs. 11,60,000. The receiver calculated arrears of royalty which the first defendant became liable to deposit with the court receiver at the said rate which amount aggregated to Rs. 1,45,00,000. According to the first defendant, the reasonable amount of royalty which the receiver ought to have fixed was Rs. 1,08,000 per month. Since the first defendant did not comply with the directions of the receiver, a report dated April 26, 1991, was submitted by the receiver to this court for the following directions:
(a) that defendant No. 1 may be directed to deposit with the receiver the arrears of monthly royalty...
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