M/S HINDUSTAN VEGETABLE OIL CORPN. LTD. vs …

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 11 January 2024
Judgment pronounced on: 09 February 2024
+ CO.PET. 49/2002 & CO. APPL. 4617/2016
M/S HINDUSTAN VEGETABLE OIL CORPN. LTD.
….. Petitioner
Through:
versus
….. Respondent
Through: Mr. Sushil Kumar Pandey, SPC
for UOI
Ms. Sonia A. Menon and Ms.
Vanita Chauhan, Advs. for
HVOC
Mr. R. Ramachandra, Sr.
Standing Counsel for Central
Excise Division
Mr. R. R. Rajesh, Adv. for R-
12/EPFO
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
J U D G M E N T
CO. PET. 49/2002

1. The present company petition for winding up of the company –
Hindustan Vegetable Oil Corporation Ltd.1, was instituted pursuant
to a recommendation from the Board of Industrial and Financial
Reconstruction2 vide order dated 07.12.2001 in BFIR Case No.
502/1999. The said order was assailed in an appeal preferred by some

1HVOC
2BIFR

of the employees of HVOC, before the Appellate Authority for
Industrial and Financial Reconstruction, and came to be dismissed on
04.08.2003.

FACTUAL BACKGROUND:

2. Briefly stated, the company in liquidation was incorporated on
31.03.1984 and is wholly owned by the Government of India. The
company in liquidation was also vested with two undertakings on
23.04.1984 namely – Amritsar Oil Works and Ganesh Flour Mills
Company Limited, subsequent to the said undertakings being
nationalised.
3. The company (in liquidation) was referred to the BIFR under
the Sick Industrial Companies Act, 1985, and was declared a sick
industrial company on 24.12.1999. Thereafter, the BIFR vide order
dated 07.12.2001 recommended the winding up of HVOC and
referred the matter to this Court. This order passed by the BIFR was
challenged in appeal by certain employees of the company before the
AAIFR, which appeal came to be dismissed vide order dated
04.08.2023.
4. Thereafter, winding up proceedings commenced before this
Court under the present company petition bearing CO.PET. 49/2002
and vide order of this court dated 28.09.2006, the Central Government
was granted permission to appoint a Liquidator. Shri B.S.Mohapatra,
then CGM, Finance (subsequently promoted as Executive Director,
Finance) of Food Corporation of India was appointed asthe Liquidator
of HVOC vide letter dated 06.11.2006 and subsequent to his

retirement in 2020, the government appointed Shri Anand Prakash, an
officer of the Administration Ministry, as the Liquidator of HVOC,
and permission of the same was granted by this Court vide order dated
06.09.2021.
5. It is relevant to note that the company had 8 Industrial Units in
Delhi, Amritsar, Kanpur, Mumbai, Bangalore, Kolkata and Chennai,
engaged in the production and packaging of vanaspati and edible oils.
It is also noted that one of the units in Delhi was a Breakfast Food
Unit, which remained functional till 2011.
6. The company (in liquidation) filed an affidavit dated
18.09.2006, through its Managing Director – Mr. Abhinash Verma
(Ministry of Consumer Affairs, Food and Public Distribution,
Department of Food and Public Distribution) pursuant to the
directions of this Court dated 27.07.2006.
7. It is stated in the said affidavit that HVOC has no secured
creditors and that Rs. 6.83 crores excluding interest is due and payable
to the unsecured creditors including customers, sundry debtors and
others; and such outstanding amounts were proposed to be settled by
realisation of the movable assets of HVOC. In addition to this, it was
stated in the affidavit that a sum of Rs. 220.98 crores including
interest, is due and payable to the Government of India and other
statutory authorities as on 31.03.2006 and a liability in the form of
unsecured credit towards the government amounting to Rs. 129.29
crores is also payable. It was also stated therein that the Government

of India has no objection to the winding up of HVOC, except the
Breakfast Food Unit.
8. A perusal of the record reflects that in respect of the movable
assets of the various units of the company, the liquidation process was
completed under the supervision of this Court in 2020. With regard to
the immovable assets of the company, in view of the fact that these
assets were placed at prime locations and could be utilized by the
Government of India, a proposal was approved by the Union Cabinet
in a meeting dated 30.11.2017 for the transfer of said assets to the
Ministry of Housing and Urban Affairs3. A joint application was
moved by HVOC and the Union of India, bearing CO.APPL.
2078/2017, for the transfer of the immovable assets of HVOC to
MoHUA and the same was allowed by this Court vide order dated
20.12.2017. Thereafter, physical possession of all the landed assets of
the company (in liquidation) was handed over to the Land and
Development Office (L&DO) and the Central Public Works
Department, MoHUA in 2018.
9. It was also resolved by the Union Cabinet that all the liabilities
of HVOC towards loans raised by it from the Government of India as
also accrued interest, were waived off in lieu of the transfer of the
immovable assets of the company to MoHUA. Further, the Union
Cabinet also decided that the Ministry of Finance is to provide HVOC
with funds up to Rs. 50 crores, which may be utilised to meet future
liabilities. However, it was directed vide order dated 20.12.2017 that

3MoHUA

the Government would make good for any shortfall, in case the
liabilities which arise in the future are in excess of Rs. 50 crores.
10. As regards the Breakfast Food Unit, which was initially kept
outside the purview of the liquidation proceedings, it is relevant to
mention that the Unit was brought within the ambit of the liquidation
process of HVOC vide order dated 22.11.2016, and thereafter, the
movable assets of the Unit were ordered to be liquidated vide order
dated 22.11.2017.
11. With respect to the employees of HVOC, it is stated that the
entire staff has been relieved through the Voluntary Retirement
Scheme (VRS) and the Voluntary Separation Scheme (VSS), and as
on date, the company (in liquidation) has no regular employees apart
from certain ex-employees who have been retained on contractual
basis. The employees of the Breakfast Food Unit were relieved by
introduction of the Improved Voluntary Retirement Scheme (IVRS)
by HVOC.
12. It is stated that the Liquidator published notices inviting claims
in national as well as local newspapers, in the years 2008 and 2011,
and thereafter settled the claims of the creditors received against the
said notices. However, it is relevant to note that some claims are
pending adjudication presently before various competent courts.
13. It is thus borne out that presently, there remain no movable or
immovable assets with HVOC. Furthermore, HVOC has no pending
claims or liabilities apart from contingent/future liabilities which may

arise in respect of ongoing litigations regarding disputed dues which
are pending adjudication.
14. At this stage, it is apposite to note that a Joint Application was
moved on behalf of HVOV and the Union of India, bearing CO.APPL.
231/2023 seeking substitution of the company – HVOC, with the
Union of India in the pending legal proceedings and to allow the
winding up of the company to proceed. This application came to be
allowed vide order dated 26.04.2023, whereby the following
directions were passed:

“7. The application is allowed with the following directions:
(i) Approval is granted for transfer and assignment of the assets,
rights, title, interest, obligations and liabilities of the Company i.e.,
Hindustan Vegetable Oil Corporation to Applicant No.2 i.e., Union
of India.
(ii) Applicant No. 2, as the legal representative of the Company is
permitted to represent the Company in all the pending legal
proceedings, if and when such an application is filed by Applicant
No.2.”

15. Presently, it has been submitted that the funds position of the
company is Rs. 14.16 crores as on 31.12.2022, mainly in the form of
FDRs in banks. It is also submitted that as on 31.12.2022, the books of
accounts of HVOC reflected current liabilities of around Rs. 0.44
crores. Further, the Liquidator is not seized of any assets either
movable or immovable, from which any money may be recovered,
and there are no more assets to be realised from the company (in
liquidation). Therefore, no useful purpose would be served by keeping
this matter pending.

16. At this juncture, it is expedient to consider the decision in
Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti &Ors.4
whereby the Supreme Court inter alia held as under:-

4(2007) 7 SCC 753

“When the affairs of the Company have been completely wound up
or the court finds that the Official Liquidator cannot proceed with
the winding up of the Company for want of funds or for any other
reason, the court can make an order dissolving the Company from
the date of that order. This puts an end to the winding up process.”

17. It would also be relevant to reproduce Section 481 of the Act,
which provides for dissolution of a company under such
circumstances as are prevailing in the present matter, and the relevant
portion of the same reads as under:

“Section 481. Dissolution of company.
(1) When the affairs of a company have been completely wound up
or when the Court is of the opinion that the liquidator cannot
proceed with the winding up of a company for want of funds and
assets or for any of the reason whatsoever and it is just and
reasonable in the circumstances of the case that an order of
dissolution of the company should be made, the Court shall make
an order that the company be dissolved from the date of the order,
and the company shall be dissolved accordingly.”
* * *

18. In view of the above-mentioned decision of the Supreme Court
in Meghal Homes (supra), as well as keeping in mind the import of
Section 481 (1) of the Act besides the facts and circumstances of the
present case, these liquidation proceedings warrant to be brought to a
closure, and therefore, HVOC stands dissolved.
19. The company in liquidation–Hindustan Vegetable Oil
Corporation Ltd. is thereby dissolved and the Liquidator is discharged.

20. The Official Liquidator is permitted to close the books of
accounts of the company.
21. A copy of this Judgment be communicated to the Registrar of
Companies within 30 days by the Official Liquidator.
22. Therefore, the present Company Petition as well as pending
application are disposed of accordingly.
23. Before parting with this matter, it may be noted that it has been
urged on behalf of the EPFO that there are certain outstanding dues in
respect of PF Contributions of HVOC. In view of the fact that there
appear to be other disputed dues pending adjudication as well, the
EPFO may move appropriate applications before the Union of India
for claiming the outstanding dues, and the same may be settled from
the funds available with the company, which now stand transferred to
the Central Government.

DHARMESH SHARMA, J.
FEBRUARY 09, 2024
Sadique