M/S MEGHAL HOMES PVT. LTD. versus SHREE NIWAS GIRNI K.K. SAMITI AND ORS.

Citation: [2007] 9 S.C.R. 330 · Decided: 24-08-2007 · Supreme Court of India · Bench: G.P. MATHUR · Disposal: Disposed off

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
MIS MEGHAL HOMES PVT. LTD. 
v. 
SHREE NIW AS GIRNI K.K. SAMITI AND ORS. 
AUGUST 24, 2007 
[G.P.MATHURANDP.K.BALASUBRAMANYAN,JJ.) 
Companies Act, 1956-Sections 39/-394A and 466-Power to make 
compromise or arrangements with creditors and members-Winding up of 
C Company-Framing of scheme for revival of company under liquidation-
Scheme approved by general meeting but not accepted by Division Bench of 
High Court-Compromise or arrangement between promoters of Company 
and sponsor of arrangement-Amended Scheme approved-Non-acceptance 
by company court on the ground that Scheme not for revival-Official 
Liquidator inviting offers for disposal of assets of co,mpany-lnterested persons 
D including sponsors placed proposals-Scheme modified on basis of affidavits 
of sponsors-Division Bench set aside order of company court and sanctioned 
Scheme as modified-Challenge to, by promoters and others, who presented 
their proposals-On appeal, Held: Modified scheme was not for revival of 
Company in liquidation-Scheme was neither modified by general meeting 
E of members of Company in terms with s. 391 nor requisite majority was 
obtained and was also objected by shareholders-Also sponsors were non-
member of the Company-Promoters and others, who presented their scheme 
had sufficient locus standi to challenge the d~cision of Division Bench--
Thus, order of Division Bench as also Company Court set aside-Proceedings 
remitted back to Company Court. 
F 
SCML-textile mill ran into difficulties. The Bangurs, Somanis, and LIC 
were its main shareholders and 20% were the sundry shareholders. State 
Bank of India and Punjab and Sind Bank were the secured creditors. On 
25.7.1984, Company Court ordered win~ing up of SCML. The Official 
liquidator took charge of the affairs of SCML. On 1.9.1994, the Company 
G Court directed the Official Liquidator to issue public notice inviting offers 
for the revival of the mills, absorption of workmen and to purchase the assets 
of the Company. Advertisement was issued. In pursuance thereof, three parties 
submitted their offers. Ranganath Somani-contributory, filed Company 
Application seeking directions of the Company Court for convening meeting 
H 
330 
MEGHAL HOMES PVT.LTD. v. SHREE NIW AS GIRNI K.K. SAMm 
3 3 l 
of the creditors, contributories and other interested persons to consider a A 
scheme proposed for the revival of the Company. The directions were given. 
However, the Workers' Union and the three parties challenged the order of 
Company Court. During pendency, meeting was held and the creditors, 
contributories and workers approved the scheme. On 4.4.1995, the Division 
Bench of the High Court set aside the direction for convening a meeting to B 
consider the scheme proposed holding that the scheme proposed was not based 
on any of the viability report regarding the revival of the company; that there 
was a failure to disclose the latest financial position of the Company; that as 
per Ranganath Somani the value of the land belonging to SCML was Rs. 200 
crores; and that the intention was to acquire the huge lands and other real 
estate belonging to SCML at a throw away price. The Division Bench directed C 
the Company Judge to obtain viability report. Special Leave Petition was filed 
challenging the decision of Division Bench and SLP was dismissed. State 
Bank of India Capital Markets Limited prepared a viability report that only a 
part of the spinning industry could be retained and revived by disposing of 
the machinery related to the other activities carried on by SCML and by sale D 
ofa portion of the immovable property of the company. 
On 29.6.2003, Somani Group and LBPL executed a Memorandum of 
Understanding. Under MOU, LBPL was to get the right to develop and deal 
with the lands of SCML on payment of Rs. 78 crores and 70,000 square ft. of 
built up area or on paying Rs. 97.50 crores to SCML. Thereafter, on E 
application filed by Somanis, Company Court directed the meeting to be 
convened to consider the amended scheme. At the meeting, the amended 
scheme was approved. Thereafter, Company Petition was filed seeking sanction 
of the amended scheme. On 23. 7.2004, the Company Court rejected the 
amended scheme holding that the scheme presented was not a scheme for 
revival but for disposal of the Company's assets which then vested in the F 
Official Liquidator; that it was only a mode of disposal of the Company's assets; 
and that the amount of Rs. 97.50 crores offered by LBP

Excerpt shown. Read the full judgment & AI analysis in Lexace.