K'taka Govt's application to revive NGEF rejected

Bangalore, Mar 28 (UNI) The Karnataka High Court today rejected as not maintainable an application by the State Government, seeking leave of the court to prefer an application under the provisions of the Company Act proposing a scheme to revitalise NGEF, in liquidation.

Rejecting the application after a detailed discussion of the provisions of the Act, Mr Justice Ramamohana Reddy, however, observed that liberty was reserved to the State to prosecute the application, already filed by it before the Centre. He further directed the State Government to ensure that the Centre disposed of the application within six months.

The application for revitalising NGEF was opposed by secured creditors and contributory holdings on the ground that the scheme did not contain in what manner and extent its dues could be repaid and that it was only a ruse to avoid payment.

The court felt that based on the facts and circumstances of the case, there was no question of staying the proceedings of winding up NGEF, as prayed. Having held that the Government was entitled to maintain a petition before the Centre, it said that if such a petition was allowed and revival scheme permitted, it was a matter that required consideration. Revival of a company in liquidation must stand to benefit the workforce, which was a serious concern both to the State and the court. The ends of justice could be met by directing the Official Liquidator to hasten the steps to dispose of the movable assets (motor vehicles) as its condition and hence value was deteriorating due to non-use.

UNI