Industrialist J P Choudury and his flagship company Titagarh Industries Ltd (TIL) on Friday asked the Calcutta High Court to appoint a receiver for Jessop & Co Ltd as the new owners of the company, the Ruia Cotex group, was changing the nature and character of its business.
The government sold its share in Jessop & Company Ltd (JCL) to the extent of 72 per cent of paid up equity to Ruia Cotex last month.
TIL along with Titagarh Wagons Ltd, Sainik Finance & Industries Ltd and Nand Kishore Mittal, filed the petition in the court of Justice P Chatterjee and sought for the order of appointment of receiver and other orders.
The court without passing any order, said it would consider the issue after hearing arguments of all concerned parties and directed the parties to file affidavits.
It fixed the case for hearing in the last week of November 2003.
Ajit Panja, S N Mookherjee and Arijit Banerjee, counsel for TIL, argued that their clients had come to learn that Ruia Cotex was tampering with assets and books of accounts of the company at its factory at 21 and 22 Jessore Road, Kolkata, West Bengal.
A receiver should be appointed for the purpose of making inventory of the assets of JCL at its Kolkata factory, they added.
TIL said Ruia Cotex admitted that prior to putting in its bid for purchase of shares in JCL, it knew that a payment of Rs 14 crore, being the proceeds of sale JCL land to Metro Railway, would be available for running JCL.
This was concealed from TIL when bidding for JCL was open. If the payment was adjusted, it would become clear that Ruia Cotex had paid only Rs 4 crore for Jessop while TIL offered Rs 11 crore.
TIL sought further order that Bharat Bhari Udyog Nigam Ltd (BBUNL), former holding company of JCL, be restrained from disbursing the sale proceeds to Jessop or any other entity.
It also asked injunction restraining Ruia Cotex from selling, disposing of otherwise removing any plant and machinery or other assets and properties from the factory.
S K Kapoor, additional solicitor general, and Anindya Mitra, counsel for the central government and Ruia Cotex, opposed the petition stating that the Calcutta High Court had already passed order on Ruia Cotex not to change the nature of the business of Jessop.