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2013 (8) TMI 724 - HC - Companies LawWinding up Petition u/s 433(e) and (f) r.w.434 and 439 of the Companies Act - Held that -The order and directions will not be given effect to for a period of nine weeks to enable them to make payment of the outstanding amount by that time if no payment was made and/or neither party applies to the Court for any directions, the order for appointing the OL will become operational - the OL will file a status report by the next date. The OL was appointed and was directed to take over all the assets, books of accounts and records - The OL shall also prepare a complete inventory of all the assets before sealing the premises in which they were kept - He may also seek the assistance of a valuer to value the assets - He was permitted to take the assistance of the local police authorities, if required - Publication of the citation of the petition be effected in the Official Gazette, The Statesman (English) and Veer Arjun (Hindi) in terms of Rule 24 of the Companies (Court) Rules, 1959 ( Rules ). Directors were directed to strictly comply with the requirements of Section 454 of the Act and Rule 130 of the Rules and furnish to the OL a statement of affairs in the prescribed form verified by an affidavit within a period of 21 days from when the order becomes operational - They will also file affidavits in the Court, with advance copies to the OL, within four weeks setting out the details of all the assets, both movable and immovable and enclose therewith the balance sheets, profit and loss accounts and copies of the statements of all the bank accounts for the last three years.
Issues Involved
1. Winding up of Tulip Telecom Ltd. (TTL) 2. Default in repayment by TTL 3. Legal proceedings and orders passed by the Court 4. Corporate Debt Restructuring (CDR) and its implications 5. Contempt of Court by TTL Detailed Analysis 1. Winding up of Tulip Telecom Ltd. (TTL) The petitioner, Australia and New Zealand Banking Group Ltd. (ANZ), filed Co. Pet. No. 395 of 2012 under Section 433(e) and (f) read with Sections 434 and 439 of the Companies Act, 1956, seeking the winding up of TTL on the ground that TTL was unable to pay its debts. ANZ had sanctioned TTL a working capital facility of Rs. 50 crores, and TTL had defaulted on its repayment obligations. 2. Default in Repayment by TTL TTL executed a demand promissory note for Rs. 50 crores and issued post-dated cheques (PDCs) which were dishonored. Despite a legal notice and reminders, TTL failed to make the payments. TTL proposed a repayment schedule which was agreed upon but subsequently defaulted on the payments. The Court noted multiple instances where TTL failed to honor its commitments, including dishonored cheques and non-compliance with payment schedules. 3. Legal Proceedings and Orders Passed by the Court The Court passed several orders directing TTL to make payments and submit proposals for repayment. On 31st August 2012, TTL undertook to pay Rs. 8 crores within two weeks and another Rs. 2 crores within ten days thereafter. Subsequent orders on 18th September 2012, 12th October 2012, and 2nd November 2012 reflected TTL's continued non-compliance. On 21st November 2012, the Court recorded a settlement where TTL agreed to pay Rs. 45.50 crores along with interest within 14 months, with a strict condition that any default would lead to contempt proceedings and appointment of a provisional liquidator (PL). 4. Corporate Debt Restructuring (CDR) and Its Implications TTL entered into a CDR mechanism with various secured lenders in January 2013. The CDR Scheme approved by the lenders did not include ANZ, and TTL argued that it was prohibited from making preferential payments to ANZ. However, TTL failed to inform the Court about the CDR Scheme in a timely manner and did not seek modification of the Court's order dated 21st November 2012. The Court found that TTL's failure to adhere to the payment schedule was not justified by the CDR Scheme. 5. Contempt of Court by TTL The Court concluded that TTL wilfully disobeyed the order dated 21st November 2012, as modified by the order dated 17th December 2012. TTL's conduct in not seeking modification of the order and failing to inform the Court about the CDR Scheme was seen as wilful disobedience. The Court decided to revive Co. Pet. No. 395 of 2012, admit the petition, and appoint the Official Liquidator (OL) as the PL of TTL. TTL was directed to show cause why it should not be punished for contempt of Court. Conclusion The Court allowed CA No. 455 of 2013, revived Co. Pet. No. 395 of 2012, and admitted the winding-up petition. The OL was appointed as the PL of TTL, with directions to take over all assets and records. The order would not be given effect for nine weeks to allow TTL to make the outstanding payment to ANZ. TTL was found to have wilfully disobeyed the Court's order and was directed to show cause for contempt. The case was listed for further proceedings on 10th July 2013.
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