SC issues notice on Indian Steel & Wire Products' plea

NEW DELHI: Indian Steel and Wire Products Ltd, which is being taken over by Tata Steel, has moved the Supreme Court against the Calcutta High Court's order that admitted a winding up petition filed by its creditors.

A bench headed by Justice C K Thakker has issued notice to its creditors on a petition filed by the ailing company seeking quashing of the High Court order that directed it to pay dues of more than Rs 27 lakh to Kothari Metals, one of its creditors, in 12 equated monthly instalments.

The High Court had also ordered that in case of default of payment of any two instalments, advertisement for winding up the company should be published.

According to the petitioner, no proceedings for winding up could lie against a sick company during the period when such sanctioned scheme was under implementation.

"Even though the dues of the petitioning creditor (Kothari) were for the period not covered by the sanctioned scheme, yet the division bench of the High Court totally ignored the golden principle," the company said in its petition filed through Chanchal Ganguli.

The company was declared sick in September 2001, and the Board for Industrial and Financial Reconstruction (BIFR) had sanctioned Tata Steel's revival scheme in October 2003, the company stated. Its board was reconstituted in December 2003 with Tata Steel taking over its management.

Kothari had filed a winding up petition against Indian Steel during the period when the scheme sanctioned by BIFR was under implementation. The winding up petition was filed after Indian Steel failed to settle its claims for supply of 10 MT nickel cathode during the erstwhile management of Jamshedpur Engineering and Machinery Company.