Companies Act Case Law Vijay Kumar Karwa Vs Official Liquidator, Rohtas Inds. Ltd

Appeal (civil) 1661 of 2008

Vijay Kumar Karwa

Official Liquidator, Rohtas Inds. Ltd

DATE OF JUDGMENT: 28/02/2008



(Arising out of S.L.P. (C) No.10587 of 2007)




1. Leave granted.
2. Challenge in this appeal is to the order passed by a
Division Bench of the Patna High Court summarily dismissing
the Company Appeal No.4 of 2006 filed by the appellant under
Section 483 of the Companies Act, 1956 (in short ‘the Act’).

3. Background facts in a nutshell are as follows:
Company case no.3 of 1984 was filed before the Patna
High Court in respect of Rohtas Industries Ltd. (hereinafter
referred to as the ‘company’) which purportedly had become
sick. It is the case of the appellant that though efforts were
made to revive, it could not materialized. Eventually the High
Court started the process of disposal of the assets of the
company. Appellant claiming to be representative of Bangar
Group of Industries, Calcutta, filed an application in the said
case. After giving particulars of the group which had annual
turnover of about Rs.5,000 crores, it was mentioned in the
application that the appellant was interested in the revival of
the company. It was also mentioned that the appellant had so
decided because of the change of political conditions of the
State and there was scope for industrial growth. The
appellant offered to pay Rs.65.51 crores as consideration
money for purchase of assets of the company in liquidation
and proposed to invest Rs.650 crores for revival of the
industry. Steps were taken at various stages by the
Government and the functionaries of the government on the
application of appellant. Official Liquidator was asked to file
reply to the prayers made in the application by the appellant.
Official Liquidator filed his response on 19.6.2006. On
25.8.2006 the matter was heard by the High Court which
directed for issuance of sale notice for assets of the company.
IA filed by the appellant was disposed of.

The appellant’s grievance is that the same was disposed
of without giving any reason or even without considering the
desirability of the revival. Reference was made to the response
of the Official Liquidator who had stated further information
may be called for from the appellant. Aggrieved by the said
order, the appellant filed an appeal under Section 483 of the
Act before the Division Bench on 11.1.2007. The Company
Judge proceeded with the matter and directed sale of the
assets of the company in favour of the Indian Railways who
had made offer of Rs.140 crores. On 12.3.2007, IA was filed
by the appellant giving details of his proposal. By the
impugned order the Division Bench dismissed the appeal.
Though various grounds have been urged in support of the
appeal, the primary ground of challenge is that such summary
disposal is indefensible particularly when the appeal is a
statutory appeal.

4. Learned counsel for the respondents, however, submitted
that there was no merit in the appeal as the learned Company
Judge had discussed with the matter in great detail. It was
also submitted that the Indian Railways have already invested
huge amounts of money.
5. Section 483 of the Act reads as follows:

“483. Appeals from orders.Appeals from any
order made, or decision given before the
commencement of the Companies (Second
Amendment) Act, 2002, in the matter of the
winding up of a company by the Court shall
lie to the same Court to which, in the same
manner in which, and subject to the same
conditions under which, appeals lie from any
order or decision of the Court in cases within
its ordinary jurisdiction.”
6. In Shanta Genevienve Pommerat and another v. Sakal
Papers Pvt. Ltd. And Ors. (AIR 1983 SC 269) it was observed
by this Court that the High Court is bound to entertain the
appeal against the order of the learned Single Judge who
disposed of it on merit and not summarily or in limine. The
position was reiterated in Smt. Arati Dutta v. M/s. Eastern
Tea Estates (P) Ltd. (AIR 1988 SC 325).

7. It may be noted that every order which may reasonably
be considered to be a judicial order as distinct from merely
administrative order is appealable in terms of Section 483 of
the Act.

8. Above being the position, we set aside the impugned
order of the High Court and remit the matter to it for fresh
disposal in accordance with law. Considering the factual
scenario as highlighted by the parties, we request the High
Court to dispose of the appeal by the end of August, 2008.
The order of status quo dated 31.8.2007 passed by this Court
shall be operative till the disposal of the appeal. It is made
clear that by giving interim protection, we have not expressed
any opinion on the merits of the case.

Leave a Comment