Company Petition No. 104 of 2006 · The High Court · 2025

Petition under order XXXIX Rule 1 & 2 R/w 151 O'C Rule g of the Companies (Court) Rules, 1959 praying that in the circumslz nces stated in the affidavit filed in support of the petition, the High Court may be rleased to stay the ongoing liquidation process, including the auction of the asse ts of the company Bhagyanagar Silk lt/ills Private Limited, scheduled to be c,) rducted on 19-12' 2024, in the matter of Company Petition No.'1 04 of 2006 by th,: Official Liquidator. This application coming on for orders, upon reading . the and the affidavit dated 16-12-2024 filed by Official Liquidator a Court for the State of Telangana, in support of the Company r\ hearing the arguments of Sri J.Sreenath Reddy, Advocrl Liquidator/Respondent and Sri Vedula Srinivas, counsel r, Sathakarni, Advocate for the Applicants. Judge's summons tached to the High rplication and upon : for the Official presenting Sri K. The Court made the following: ORDER IN THE HIGH COURT FOR THE STATE OF TELA]\IGANA ATHYDERABAD THE HON'BLE SMT.JUSTICE T. MADHAVI DEVI COMPANY APPLICATION No.146 of 2 024 IN COMPANY PETITION No.l 04 of 2006 DATE:16.12.2025 Befween: Mr. Vinay Agarwal and two others ...Applicants AND Bhagyanagar Silk Mills Private limited, (in Liquidation) Represented by the Official Liquidator, High Courr for the State of Telangana, At Hyderabad. . . . Respondent ORDER This application is filed by the directors of the respondent- company under Sections 466 and 559 ofthe Companies Act, 1956, read with Rule 9 of the Companies (Court) Rules, 1959, seeking a declaration of the winding-up proceedings of the respondent- company, pursuant to the order dated, 17 .07 .201 5 passed ln Company Petition No.l04 of 2006 and as upheld by the order dated

12.04.2019 in Original Side Appeal No.50 of 2015, as permanently stayed. ) \ \ TMDJ ( IMPA 146 2024 2

2. Brief facts leading to the filing of the present rr rplication are that all the three applicants were shareholders and di ectors of the respondent-company. On account of loss of substral rn, applicant No.3 filed C.P.No.67 of 2006, in which the compan was arrayed as the respondent and represented by applicant No.l: rerein, while applicant No. 1 was also arrayed as a respondent ir his personal capacity. Another C.P.No.t04 ot 2006 was filed t y the family members of applicant No.3 against the company, rr presented by the other two shareholders. This Court, vide comm I r order dated

17.07.2015, allowed both company petitions and dilt:ted winding up of the respondent-company. Aggrieved thereby, t: : respondent- company preferred O.S.A.No.4S of 2015 against th order dated

17.07.2015 passed in C.P.No.67 of 2006 and O.S.A.l. o.50 of 2015 against the order dated 17.07.201 5 passed in C.P.N,I 104 of 2006. O.S.A.No.48 of 2015 was allowed by order dater 12.04.2019, setting aside the order passed in C.P.No.67 of .l t06 whereas, O.S.A.No.5O of 2015 was dismissed, thereby r rholding the winding-up order passed in C.P.No.104 of 20(I. T'hus, the company was directed to be wound up on the gror rd of loss of \l t TMDJ coMPA 146 2024 3 substratum. An Ofhcial Liquidator was appointed pursuant to the winding-up order in C.P.No.104 of 2006 and the Official Liquidator has taken steps to put the property of the respondent- company to sdle by way of auction. However, the said auction could not be conducted, as there was only one bidder. It is stated that, in the meantime, the applicants resolved their inter se disputes and have come to an agreement to revive and run the respondent- company. Therefore,, the present company application has been filed seeking to stay the winding-up proceeding of the respondent- company permanently.

3. It is submitted that as per the balance sheet dated 3 1.03.2006, the total liabilities of the company under liquidation were Rs.1.66 crores, out of which Rs. I .34 crores pertained to shareholder loans and contributions liom their family members and only Rs. 31 lakhs pertained to unsecured third-party liabilities. It is submitted that the liabilities of the respondent-company with respect to the shareholders, and the liabilities of the respective parties have since been relinquished. TMDJ Ca '/IPA 146 2024 4

4. It is fuither submitted that applicants have alrezLr 1' deposited a sum of Rs. 50 lakhs with the Official Liquidator prr suant to the directions of this Court in O.S.A.No.5 of 2014, file'l cha[lenging the dismissal of the interlocutory application seekinp stay of the proposed e-auction on 19.12.2024 and that the sai< amount of Rs.50 lakhs is sufficient to meet the outstanding third-J nny liability of Rs. 31 lakhs, leaving a surplus of Rs.l9 lakhs, whitl is presently in possession of the Official Liquidator.

5. The applicants have also furnished undertakin 3s and filed individual affidavits stating that they shall be liable 1i r any claims made against the company for the aforesaid period' I such claims are raised in the future. Out of the balance amount o' ls' 19 lakhs, the Official Liquidator has stated that a sum of Rs. 3 li <hs has been appropriated towards his costs and establishment I rnd and the remaining amount is liable to be refunded.

6. The official liquidator has also fited a eport dated 27,06.2025 stating as under: \ "30. That, as on date the funds position of the 'tnpany in liquidation is as follows: TMDJ coMP A t46 2024 5 (, (ii) (iii) Cash in Hand Balance at Bank Deposits (Fixed Deposits) Nil Rs.5 1,642/- Rs.47,50,000/- Total Rs.48,0I ,642/- 3t. That as per Rule-309 of the Companies (Court) Rules, 1959 - Apportionment of expenses of common staff - " Where any staff is employed to attend to the work of more thon one liquidation, or any establishment or other charges are incurred for more than one liquidation, the expenses incurred on such staff and lhe common estoblishment and other charges, shall be appointed by the Official Liquidator between the several liquidations concerned in such proportions as he may think Jit, subjecl to the directions of the Judge, if any". In this regard il is submitted that as per the above rule, this Hon'ble Courl has power to sanction the charges for the services rendered for the company under liquidation. ln the present case, lhe Directors / Shareholders intends to revive the company in liquidation subject to the orders of this Hon'ble Court- Therefore, the Oficial Liquidator prays this Hon'ble Court to direct the appellant to pay an amount of Rs.3,00,000/- to the Official Liquidator to the account of " Eslale and E.stablishment Fund Account", from which liquidation expenses are incurred-

32. That, the compdny in liquidation is having assets worth of Rs.28.79 Crores (Realizable Value) as per the Valuation Report submitted by the valuer, appointed by the Hon'ble Court, whereas, the liabilities of the company in liquidation is Rs.1.66 Crores (as per Balance Sheet as at 3l- 03-2006). If this Hon'ble Court considers the Affidovits of the Directors / Shareholders regarding the waive off of all the unsecured loans pertaining to direclors / shareholders and their families to the extent of amounl of P.s.; 1.31 Crores, the remaining liabilities (unsecured) will be Rs.3 I .00 lakhs only, for which they have deposited Rs.50.00 lakhs with the Official I TMDJ ( oMPA 146 2024 6 Liquidator and also filed Memo dated 2 2.( CA.No. 146/2024 before this Hon'ble Court stari,t Applicants have already deposiled a sum of Rs. out of which Rs.34,00,000/- (comprising R:. towards unsecured liabililies and Rs.3,00,00) liquidation expenses) may be duly appropriuted. 7 amount of Rs.16,00,000/- continues to remoin wtt of the Official Liquidator as surplus. 4 2025 in , that "the 0,00,000/- 1,00,000/- - towards he balance r the ffice From the above, it is clear that the amoun' lakhs deposited by the applicants herein ofter 02 liquidation expense.t of Rs.2.00 lakhs, the fund ,n', the Official Liquidator is Rs.48.00 lakhs (appro: sfficient to discharge the liabilities of Rs.3 L00 rr. audited Balance Sheet as at 3l-03-2006), iJ. , future. Moreover, as stated above the Olficial Liu invited the claims from the creditors of the conr. response to such claim notice, no claims we" Hence, it is not out of place to mention here that of the company in liquidation can be treated as N I tf Rs 50.00 ustment o.f ilahle witlt ) which is 'rhs hs per :ceived in idanr had ny and in received. Ite liability Therefore, in the present case, even iJ'tl',t sold in the liquidation proceedings, the bene.fic entire sale proceeds so realized will be the shc contributories as per the provisions of Rules 27.; the Companies (Court) Rules, 1959, who ore n(,t opplicants herein, as no claims have been receiv: creditor in response to claim notice publi:l newspapers. Further, the applicants have in tht mentioned that granting the reliefs sought by theh harm any stakeholders and on the contrary it tt, other stakeholders to b7nefit from the revival (.'l company, potentially dertving monetary ent benefits, thdt may not be possible if the companl through the sale of its assets In view of the Hon'ble Court may consider the present appl t applicants by passing necessary orders subject ,t qssets are ary of the 'eholders / tntl 279 of z other the | .from any. ':d in the rypl ication would not uld enable the legac.y ' business s dissolved rbove, this rion of the .fitrnishing TMDJ coMP A 146 2024 7 on undertaking by the applicants before this Hon'ble Court that they will settle / pay the claim of creditors as per law, if any, received in future by the Official Liquidator, as no claim or liability is determined due to non-submission of claims by any creditor. In view of the facts and circumstances stoted above, it is prayed that this Hon'ble Court moy be pleased to: i) take the report of the Official Liquidator under Section 466(2) of the Companies Act, I956, on record; ii) consider the presenl application of the applicants by passing necessary orders subject to furnishing an undertoking by the applicants before this Hon'ble Court that they will settle / pay the claim oJ creditors as per law, if any, received in future by the Offcial Liquidator, as no claim or liability is determined due to non-submission of claims by any creditor; ii) direct the applicants to pay an amount of Rs.3,00,000/- to the Official Liquidator towards lhe services provided by the ffice of the Official Liquidator to the account of "Estate and Establishment Fund Account", from which liquidation expenses are incurred; ond Pass such order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the cases. " 7- In view of the facts and circumstances stated above, and having regard to the undertakings given by the applicants by way of individual affidavits, this Court is satisfied that a case is made o \ fo, Act. 1956 "*"."ire of powers under Section 466 of the Companies l TMDJ coMPA 146 2024 8

8. Accordingly, (i) the winding-up proceedings of I e respondent company in Company Petition Nc. 04 of 2006, pursuant to the order dated 17.07.201 5 as upheld by the order dated, 12.04.2019 in O.S.A. I b.50 of 2015, are hereby permanently stayed; (ii) the Official Liquidator is directed ro close rhe liquidation proceedings in respect of re respondent company and take steps to hand ol:r the assets, records, and management of the respor Jent company to its Board of Directors, subject to c: npliance with law; (iiD the Official Liquidator is permitted to appropriare a sum of Rs.3,00,000/- (Rupees Thre: Lakhs only) towards his costs and establishment che -ges and shatl refund the balance amount lying to rl ( credit of the respondent company, after adjustment. n accordance t\/ with law; 9 TMDJ coMPA 146 2024 (i") the undertakings given by the applicants shall form part of this order and shall be binding on them; (u) the Registry is directed to communicare this order to the Registrar of Companies in rerms of Section 466(3) of the Companies Act, 1956, and the Registrar of Companies shall take further action, if any, in accordance with law.

9. With the above directions, the Company Application disposed of. No costs. //TRUE COPY// SD/- K. SHYLESHI JOINT REGIS ECTION OFFICER 'rxt-Floo;,

1. The Official Liquid (in.Liqn)Office at Hyderabad. atoT, M/S. BHAGYANAGAR SILK 1"t floor, Corporate Bhawa z T6e Reoistrar of companies, Ministry of corporate Affairs, Government of - l;;L: Corpirrate Bhawan,- \agole, Bandlagyda, Thattiannarama Village,Hayathnagar.Mandal,RangaReddyDistrict,IelanganaslateHln Code-500068 3 The Reoional Director, south Eastem Region, Ministry of corporate .Affairs, " iii"Fi;;'r;-C;tpoiit6-enitin, Nagote, eindlasuda, ihattiannaram.Villasg' lelansana State Pin code S PRIVATE LIMITED Bandlaguda, Nagole, .District, iluv"ii""jgJr- fui;"oir, Ci"gu Reddv 500068 Telangana for the State of Telangana(OPUC) +. ifre-section Officer, O.S.Section, High Court of Hyderabad for the State of 5. O;; ic 6 sri J.sreenath Reddy, Advocate for official Liquidator, High court 6. One CC to K. Sathakarni' Advocate [OPUC] 7. Two CD CoPies ?ft' Kam/SA l\ \ To, HIGH COURT DATED:1611212025 SHE.i C) c) 2u 11 stt t SFAl * ORDER COMPA.N o.146 of 2024 COMPANY PETITION No.l04 of 2006 DISPOSING OF THE COMPANY APPLICATION ?r lP 3\