Business Daily from THE HINDU group of publications
Sunday, Aug 05, 2007
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Business Daily from THE HINDU group of publications Sunday, Aug 05, 2007 ePaper |
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Corporate
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Courts/Legal Issues HC orders interim injunction on Pioneer Mills
Our Legal Correspondent Chennai, Aug. 4 The Madras High Court has ordered interim injunction against Coimbatore Pioneer Mills Ltd restraining the company from alienating or encumbering any more, its property, movable and immovable, pending disposal of a writ petition preferred by an ex-employee of the company. Mr Justice K. Venkataraman, who heard petition from Mr P. Veluswamy, ordered notice to respondents (Secretary, Government of India, Department of Finance, and Board for Industrial and Financial Reconstruction, Coimbatore Pioneer Mills and Ambattur Clothing Ltd), returnable in three weeks. According to the petitioner, Pioneer Mills became sick and was declared as such by the BIFR as per order dated June 10, 1998. The petitioner contended that the company (third respondent) had sold its assets to another company (Ambattur Clothing Ltd, Chennai – fourth respondent) in violation of the company rules. The action of the third respondent in not complying with the direction of BIFR to use funds lying in ‘No Lien’ account with State Bank of India for purpose of payments of secured creditors and balance amount to pay dues to workers was against the law and principles of natural justice. The petitioner prayed, inter alia, for direction to BIFR to enforce procedures to be adopted before selling the properties of sick industry and not to alienate any other properties belonging to the company till disposal of this writ petition.
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