2012 (9) TMI 744 - HC - Companies Law

Winding Up Petition filed u/s 433(e) and (f) along with section 439 of the Companies Act, 1956 - share application money and unsecured loans provided by petitioner is pending - Held that - It is not the case here that the share application was not refunded or shares were not allotted. The shares were allotted on 20.9.2010. The present petition has been filed on 29th September, 2010 much after the issuance of the shares. The case of the petitioner is that he demanded the return of the share application money with a request not to allot the shares and it therefore amounts to a debt. It is held that return has to be in terms of the procedure contemplated u/s 100 to 104 of the Companies Act and on an approval by this Court. Merely because a refund has been asked, neither is it a debt nor is the Company liable to pay the same. Unsecured loans - respondent has admitted debt and stated that the said amount is not due for payment immediately - Held that - It is not a debt at present. It may be a debt in future. Therefore, even though the liability has been admitted, the petitioner cannot coerce the company to make the said payment especially in view of the fact that the payments are not immediately due. For the aforesaid reasons, the petitioner has failed to make out a case. The petition being devoid of merits is dismissed.

Summary

Issues:
Petition filed under Section 433(e) and (f) seeking winding up of respondent Company, unpaid amount in Share Application Money Account, unsecured loan repayment, legal notice demanding repayment, objections raised by respondent Company, loan sanctioned by financial institutions, shares allotment, debt due, legal interpretations of Companies Act, 1956, and judgment references.

Analysis:
The petitioner, a former Promoter and Director of the respondent Company, filed a petition seeking winding up under Sections 433(e) and (f) of the Companies Act, 1956, due to unpaid amounts in the Share Application Money Account and an unsecured loan. The petitioner resigned from the Board and requested the return of Rs. 1,58,01,468/- in the Share Application Money Account and Rs. 3,77,861/- as an unsecured loan, but the respondent did not comply, leading to the legal petition. The respondent objected, claiming the petition was an abuse of process to withdraw investments and citing loan subordination to a sanctioned Rs. 25 crores loan. The respondent argued against refunding share application money without shareholder approval and court confirmation, and disputed the petitioner's failure to invest further as promised.

The respondent contended that shares were allotted to the petitioner and other Promoters, making the petition unsubstantiated. The respondent referred to a judgment emphasizing the obligation to refund share application money if shares are not allotted promptly. The petitioner relied on the same judgment to support his claim, emphasizing the respondent's failure to issue shares despite a winding-up notice. However, the respondent argued that shares were allotted before the petition was filed, rendering the judgment inapplicable. The court noted the specific circumstances and timelines of share allotment in the case.

Regarding the unsecured loan, the petitioner claimed Rs. 3,77,861/- remained unpaid, while the respondent stated it was not due for payment at the time of the petition. The court referenced legal precedents to explain that even admitted liabilities not immediately due cannot be coerced for payment, highlighting the importance of evidence and timelines in determining due debts. The court rejected the petitioner's claim based on the respondent's statement of objections, emphasizing the lack of clarity on the due date for repayment.

Additionally, the respondent's argument that the balance sheet's loans and credits from Directors and Promoters encompassed the petitioner's loan was dismissed due to insufficient evidence. Ultimately, the court found the petitioner failed to substantiate the case, leading to the dismissal of the petition and rejection of pending applications. The judgment provided a detailed analysis of legal interpretations, precedents, and specific circumstances to reach its decision.