JUDGMENT : Co. App. No.22/2013 1. M/s. Regency Industries Limited, a company incorporated and registered under the Companies Act, 1956 (hereinafter referred to as the 'Companies Act') [for short 'the Company'], went into financial difficulties and is now in liquidation. One of the assets of the Company was a plot bearing No. 12, Vaishali Group Housing Scheme, Ghaziabad ad measuring 4000 sq.mtrs. on which flats are stated to have been constructed. This plot was allotted by the Ghaziabad Development Authority, the appellant, on 4.11.1989 for a total consideration of Rs. 120.00 lakh out of which Rs. 60.00 lakh was paid as earnest money and the balance amount had to be paid as per the schedule laid down in a communication dated 29.9.1989. 2. It is the say of the appellant that a letter dated 2.11.1990 was received by them from the Allahabad Bank, Navyug Market Branch, Ghaziabad seeking information qua this plot and an NOC for mortgaging the plot in favour of the Bank. The appellant conveyed its no objection vide communication dated 29.3.1991 subject to the terms and conditions specified in the letter. The payments of the amounts due under the allotment letter, however, were not paid and the appellant vide letter dated 22.5.1993 cancelled the allotment on account of non-payment of Rs. 89,34,884.00 as due up to 15.3.1993. The appellant further initiated proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and it is stated that even an eviction order has been passed. 3. In view of the inability of the Company to pay its debts, a winding up petition was filed by World Link Finance Limited before the learned Company Judge, Delhi High Court which was registered as Co. Pet. No.281/1996 stated to have been filed on 9.10.1996. This petition was ultimately admitted on 14.8.1999 and after publication of citation the final winding up order was passed on 2.5.2000 for the Official Liquidator to take necessary steps thereafter. 4. The aforesaid asset of the Company being the plot at Ghaziabad became a subject matter of dispute as to how it should be dealt with. This petition was ultimately admitted on 14.8.1999 and after publication of citation the final winding up order was passed on 2.5.2000 for the Official Liquidator to take necessary steps thereafter. 4. The aforesaid asset of the Company being the plot at Ghaziabad became a subject matter of dispute as to how it should be dealt with. It is in these circumstances that the learned Company Judge vide orders dated 14.7.2006 and followed by order dated 8.9.2006 directed the meetings to be held amongst the Officers of the Allahabad Bank and the appellant along with the OL to find a solution as they were the two significant secured creditors. Consequently, meetings are stated to have been held on 27.9.2006 and 13.10.2006. 5. It is in pursuance of the aforesaid meetings that two affidavits were filed by the appellant dated 5.2.2007 and 27.6.2008. If one may say so the subsequent controversy and the present appeal really flows from these two affidavits. 6. A perusal of these two affidavits shows what transpired. It appears that there were two alternative proposals put forth by the appellant, both of which were not acceptable to the Allahabad Bank. This is set out in para 16 of the affidavit dated 5.2.2007 as under: '16. It is submitted that a meeting was held on 13.10.06 pursuant this Hon'ble Courts order 8.9.2006 in which the Deputy O.P. the Chief Manager Allahabad Bank, representatives of GD was present in which it was reiterated by GDA that it has full ownership of the plot and it has cancelled the allotment and have order of eviction under the P.P. Act. Even otherwise it was conveyed that the GDA is prepared to refund the amount of Rs.60,00,000/- to the Allahabad Bank which can protect the interest the Allahabad Bank and other creditors. This offer was rejected by the Allahabad Bank. As a second option GDA proposed that on payment of balance amount as on dated 15.5.1993 (date of cancellation of allotment) of Rs.89,34,884/- to the GDA, the property can be disposed of as per orders of this Hon'ble Court.' 7. The aforesaid deadlock was the reason that in the same affidavit the appellant prayed as under: "20. As a second option GDA proposed that on payment of balance amount as on dated 15.5.1993 (date of cancellation of allotment) of Rs.89,34,884/- to the GDA, the property can be disposed of as per orders of this Hon'ble Court.' 7. The aforesaid deadlock was the reason that in the same affidavit the appellant prayed as under: "20. That in view of the submissions made in the foregoing paragraph the deponent prays to this Hon'ble Court to consider the above submissions and dispose of the matter in terms of two proposals by GDA in which it is prepared to refund the amount of Rs.60,00,000/- to the Allahabad Bank which can protect the interest the Allahabad Bank and other creditors. As a second option, on payment of balance amount on 15.05.1993 (date of cancellation of allotment) of Rs.89,34,884/- along with 18% penal interest till date along with allotment fee to the GDA, the property can be disposed of as per orders of this Hon'ble Court." 8. The aforesaid, thus, shows that the appellant desired the Court to find a solution to the deadlock by adopting any of the two courses of action which were proposed by the appellant. 9. The subsequent affidavit dated 27.6.2008, once again, was in the same terms and for convenience of reference para 6 of the same is reproduced as under: "6. That in view of the submission made in the foregoing paragraph the deponent prays to this Hon'ble Court to consider the above submission and dispose of the matter in terms of two proposals by GDA in which it is prepared to refund the amount of Rs.60,00,000/- to the Allahabad Bank and other creditor. As a second option, on payment of balance amount on 15.05.1993 (date of cancellation of allotment) of Rs.89,34,884/- aiong with 18% penal interest till dated along with allotment fee to the GDA, the property can be disposed of as per orders of this Hon'ble Court." 10. Another development which thereafter takes place is that one M/s. Deepsons (India) Pvt, Ltd., respondent No.2 herein, sought to come into the picture as a strategic investor in the Company to revive the Company and pay the debts of secured and unsecured debtors pursuance of a scheme of arrangement. Another development which thereafter takes place is that one M/s. Deepsons (India) Pvt, Ltd., respondent No.2 herein, sought to come into the picture as a strategic investor in the Company to revive the Company and pay the debts of secured and unsecured debtors pursuance of a scheme of arrangement. In view of this development the Company prayed for convening of the meeting of shareholders, secured and unsecured creditors by filing an application 26.5.2012 which prayer was acceded to by the learned Company Judge on 29.5.2012. The meetings were held on 14.7.2012. 11. The meeting of secured creditors was attended by only two creditors being the Bank of India and the Allahabad Bank while the appellant chose not to attend the meeting. The meeting of the secured creditors approved the scheme of arrangement. 12. The Company thereafter filed Co. Pet. No.350/2012 under Sections 391, 392 read with Section 394 of the Companies Act before the learned Company Judge for purposes of sanctioning the scheme of arrangement on 23.7.2012. It is at this stage that the appellant filed a counter affidavit dated 2.11.2012 seeking to challenge the scheme of arrangement as not acceptable to the appellant. The reason for the same was stated to be a Government Order (for short 'G.O.') dated 20.11.1999 issued by the State of U.P. and dealing with the issue of restoration of allotment. 13. In terms of this G.O. if an allotment is cancelled on account of any default on the part of the allottee, for purposes of restoration the valuation of the property would be either 75 per cent of the market value of the property or current price of the scheme whichever is higher. In effect the appellant claimed amounts as per this G.O. for restoration of the allotment in derogation of their plea earlier made vide two affidavits referred to aforesaid. 14. The aforesaid contest has resulted in the impunged order dated 11.1.2013 of the learned Company Judge where this plea of the appellant has been negated. In effect the appellant claimed amounts as per this G.O. for restoration of the allotment in derogation of their plea earlier made vide two affidavits referred to aforesaid. 14. The aforesaid contest has resulted in the impunged order dated 11.1.2013 of the learned Company Judge where this plea of the appellant has been negated. The learned Company Judge has found that the appellant itself had given the dual option to the Company Court and out of the same the second option has been followed as part of the scheme of arrangement and, thus, it was not open to the appellant to resile from the same after a period of five (5) years setting forth a new case which would in effect jeopardize the revival of the Company. 15. Learned senior counsel for the appellant has canvassed before us that the earlier affidavits were really in pursuance of the directions of the learned Company Judge to hold meetings to work out a possible solution and, thus, they were exploratory in nature. This plea, in our view, is not sustainable for the reason that though undoubtedly the Company Court wanted the secured creditors to find a feasible solution, it is the appellant itself which came up with two solutions and made a grievance before the learned Company Judge that the Allahabad Bank was not adopting either of the two solutions. Not only that it prayed to the learned Company Judge that one of the two solutions be adopted as the final solution. This is exactly what has been done and the scheme of arrangement was based on this premise where strategic investors have come and are stated to have invested about Rs. 20.00 crore already. Thus, to adopt the plea of the learned senior counsel for the appellant would amount to jeopardizing the scheme itself where third parties have committed themselves on the basis of the stand of the appellant. 16. The second limb of the submission of the learned senior counsel for the appellant is that the concerned authorities failed to examine the G.O. dated 20.11.1999. In fact, learned counsel for the appellant had taken time on the earlier date of hearing to file an affidavit setting forth certain material facts. This affidavit, affirmed on 7.5.2013 by the Joint Secretary, GDA is on record enclosing certain documents. In fact, learned counsel for the appellant had taken time on the earlier date of hearing to file an affidavit setting forth certain material facts. This affidavit, affirmed on 7.5.2013 by the Joint Secretary, GDA is on record enclosing certain documents. It is stated in the affidavit that in order to inquire into the circumstances leading to the two affidavits being filed and responsibility to be fixed an Inquiry Committee was constituted which conducted an inquiry and reached a conclusion vide order dated 16.4.2013 that a former Executive Engineer was responsible for giving the proposal for filing the affidavits. The report has been annexed as Annexure A-l. 17. A perusal of this report shows that no accountability arises on account of the affidavits filed in Court. On the other hand it is stated that the decision was taken as a prudent commercial decision as in terms of the calculations available as on 13.10.2006 the re-allotment as per G.O. would have entitled the appellant to receive a sum of Rs. 2,44,28,750.00 while if the second option made available by the appellant (as adopted by the Company Court) was taken into account then a higher amount of Rs. 3,05,12,629.00 would be payable. Thus, it is not as if the G.O. has escaped the attention of the concerned authorities but a deliberate and conscious decision was taken to file the affidavits on the basis of a more prudent commercial decision. 18. We fail to appreciate as to how the appellant can have a grievance qua the impugned order when all that has happened is that the prayer made by the appellant in the affidavits has been accepted. The appellant cannot be permitted to backtrack under the guise of the G.O. after a period of five (5) years. The endeavour-in the present appeal appears to be only to obtain a stamp of approval from the Court for the action of the appellant rather than any merits of the controversy. 19. We may note in the end that the present appeal has been filed under Section 483 of the Companies Act which forms a part of Part-VII of Chapter 2. Part VII deals with winding up of a company. In the present case, we are concerned with a scheme of arrangement which would be governed by Part VI Chapter 5 dealing with Arbitration, Compromises, Arrangements and Reconstructions. Part VII deals with winding up of a company. In the present case, we are concerned with a scheme of arrangement which would be governed by Part VI Chapter 5 dealing with Arbitration, Compromises, Arrangements and Reconstructions. In fact, under Section 391 of the Companies Act there was earlier a provision of appeal under sub-section (7) which since stands deleted without creating a corresponding provision for appeal. 20. The moot point, thus, arises, whether the impugned order is at all appealable by seeking recourse to a different provision meant for winding up of a company. Since we had heard the appeal on merits we leave this question open. 21. The appeal being completely devoid of any merit is dismissed leaving the parties to bear their own costs. CMNo.4792/2013 (Stay)