2001 (8) TMI 1273 - HC - Companies Law

Issues Involved:
1. Condonation of delay in taking out the present application.
2. Modification and extension of payment dates set out in the consent terms.
3. Declaration that the winding-up petition does not stand admitted and the Official Liquidator not be appointed as Provisional Liquidator.
4. Declaration that the Official Liquidator not act pursuant to the consent terms until the expiry of the extended period.

Issue-wise Detailed Analysis:

1. Condonation of Delay:
The respondents sought condonation of delay in taking out the present application. The court recognized the respondents' efforts to sell the secured properties to clear the petitioner's claims and the difficulties they faced, such as market conditions and removal of encroachers. The court found that the respondents made a good case for condonation of delay due to these uncontrollable circumstances and accepted their solemn undertaking to honor the revised payment schedule.

2. Modification and Extension of Payment Dates:
The respondents requested the modification and extension of the payment dates set out in the consent terms dated 22-3-2001. The court acknowledged the respondents' failure to honor the original and second consent terms but noted their genuine efforts and difficulties in selling the property. The court decided that a reasonable and pragmatic approach was needed, thus allowing the extension of the payment dates. The revised schedule proposed by the respondents was deemed fair, and the court accepted their undertaking to make the payments in two equal installments by 31-10-2001 and 31-12-2001.

3. Declaration Regarding Winding-up Petition and Provisional Liquidator:
The respondents sought a declaration that petition No. 159 of 2000 does not stand admitted and that the Official Liquidator not be appointed as Provisional Liquidator as contemplated in the consent terms. The court, considering the respondents' proactive steps to fulfill their obligations and the potential adverse impact on their business and employees, decided to grant this relief. The court emphasized that the winding-up order would not be in the interest of anyone and that the petitioners should be more interested in recovering their loan amount with interest.

4. Declaration Regarding Official Liquidator's Actions:
The respondents also requested a declaration that the Official Liquidator not act pursuant to clause 3 of the consent terms until the expiry of the extended period. The court agreed, noting that the respondents had shown bona fides by accepting a higher financial burden and proposing an expedited payment schedule. The court found that extending the time for payment was in the interest of justice and aligned with the inherent powers conferred by rule 9 of the Company Court Rules and section 442.

Conclusion:
The court made the judge's summons absolute in terms of the reliefs sought by the respondents. The delay in taking out the application was condoned, the payment dates were modified and extended, the winding-up petition was declared not admitted, and the Official Liquidator was instructed not to act pursuant to the consent terms until the extended period expired. The court's decision was guided by a pragmatic approach, considering the respondents' genuine efforts and the potential adverse impact of a winding-up order.

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