15 and 15/76 under s. 483 of the companypanies act.
the judgment of the companyrt was delivered by desai j a private sector sick unit indian hardware industries limited ihi for short engaged in manufacture of builders hardware number in a state of suspended animation since 1971 awaits the outcome of this appeal for infusion of life into it simultaneously providing a ray of hope to primarily the workmen who were rendered jobless and the unsecured and secured creditors whose hard earned money is locked up in it.
m s. delhi flour mills limited dfm for short was the holding companypany of which ihi was the subsidiary.
appeal by special leave from the judgment and order dated 16 7 1976 of the delhi high companyrt in companypany appeal number 15/76.
in accordance with this opinion the appeal preferred by respondent number 1 being companypany appeal number 15/76 challenging the order of the companypany judge which granted modification substitution of appellants as proponents was allowed and the application of the appellants for substitution was rejected.
it was further of the opinion that though the transfer of 44000 shares of ihi held by dfm in favour of the appellants may be companyplete as between the transferor and the transferee the same would number clothe the appellants with the right of a member unless their names were put on the register of members maintained by ihi and that the same having number been done the appellants were number members of ihi.
a little while before this application was moved respondent k. p. jain filed companypany application number 190/76 purporting to be under s. 392 of the companies act 1956 inviting the companyrt for the reasons mentioned in the application to hold that the scheme sanctioned by the companyrt cannumber be worked satisfactorily with or without modification and therefore an order winding up the companypany should be made.
respondent jain preferred two appeals being companypany appeals number.
m. gupta and k. n. bhat for intervener dena bank.
1189 as the shares of dfm were closely held by relations of respondent number 1 referred to as jain group and as there were fratricidal disputes in jain family culminating into a litigation in the high companyrt of delhi ihi languished for want of attention.
r. mridul r. l. roshan h. k. puri and vijai k. bahl for respondent number 1.
civil appellate jurisdiction civil appeal number 1217 of 1976.
after the dispute in the jain family was resolved somewhere in 1974 a situation emerged in which one r. p. jain and the members of his family acquired controlling interest in the holding companypany dfm.
dropadi gupta referred to as appellants hereafter .
it was further of the opinion that the debt owed by ihi to dfm was number assigned according to law in favour of the appellants and therefore they were number creditors and in view of the language of s. 391 of the companies act the appellants being neither members number creditors of ihi had numberlocus standi to move an application under s. 392 for modification of the scheme because in the opinion of the companyrt s. 391 companytrols s. 392 and either a member or a creditor or in the case of a companypany being wound up a liquidator alone can file an application for modification.
a few facts will put the problem raised in this appeal in focus and proper perspective.
23 lacs recoverable from ihi to the present appellants s. k. gupta and mrs.
once r. p. jain came into saddle the dfm as holding companypany proposed a scheme of companypromise arrangement between ihi and its unsecured creditors and after the scheme was approved the proponent of the scheme submitted companypany petition number 86/74 to the companypany companyrt for according sanction to the scheme and by order dated 15th october 1975 the scheme was sanctioned.
sometime after the scheme was sanctioned dfm transferred its 44000 shares of ihi and its claim to the tune of rs.
both these appeals came up before a division bench of the delhi high companyrt and they were disposed of by a companymon judgment.
in the meantime m s. indian smelting refining company limited petitioning creditor for short filed a winding up petition against ihi in 1975 alleging that ihi was heavily indebted and was unable to pay its debts as and when they became due.
thereafter the appellants filed company application number 193/76 requesting the companyrt to make appropriate modification and or granting further direction for effectively implementing the scheme sanctioned by the court in respect of ihi by substituting the appellants in place of dfm as proponents of the scheme and imposing upon them the liability to implement the scheme under the supervision of the companyrt.
the companypany judge by his two orders in the two aforementioned applications dated 26th april 1976 granted the application of the appellants and modified the scheme by substituting the appellants as proponents of the scheme and simultaneously rejected the application of the respondent k. jain for winding up the companypany.
somewhere by the fall of 1971 functioning of ihi came to a halt and the huge debt was mounting up with the spiraling of interest.
pramod dayal and s. k. gupta for respondent number 2.
s. chitale k. r. khaitan b. mohan and praveen kumar for the appellants.
the division 1190 bench was of the opinion that substitution of a new propounder in a scheme already sanctioned by the companyrt in place of the original propounder of the scheme was a change of a basic nature which would number be companyprehended in the expression modification as under s. 392 and therefore the companypany judge companyld number have granted such a substitution of the propounder of the scheme without referring back the proposed modified scheme to the creditors who had approved the original scheme.
the appellants preferred the present appeal by special leave against the decision of the division bench in companypany appeal number 15/76 by which their application for substitution modification was rejected.
