2014 (4) TMI 655 - HC - Companies Law

Winding up petition - Violation of contract - Non payment of dues - Respondents claim that statutory notice was not sent to the registered office address of the company - Held that - Appellant filed a further affidavit dated 18th February 2014. In paragraph 2 of this affidavit, its deponent states that an examination of the records with the Registrar of Companies shows that Sundeep Plastics Pvt Ltd had its registered office at Udyog Bhavan, and that there is only one form no.18 showing this, dated 15th December 1980. After the change of name, the registered office address is at 52, Mamta A , New Prabhadevi Road. This is the address shown on Sundeep Polymer s annual return for 28th September 1998, and the Directors Report and Balance Sheet as on 31st March 2000. The Company/LLP Master Data record, too, shows only this address. To this affidavit, at Exhibit D , is another print out of the Company/LLP Master Data, and this also shows the 52, Mamta A address. The CIN no of the company (both when it was known as Sundeep Plastics Pvt Ltd and later when its name was changed to Sundeep Polymers Pvt Ltd) is the same - Respondent s reply, dated 27th March 2001, shows only one address 52, Mamta A , New Prabhadevi Road, Mumbai 400 025. This is the very address to which the statutory notice was sent. Whether transaction is hit by the Bombay Money-Lenders Act 1946 and the agreement is not a hire-purchase agreement but a loan, thus making the petition not maintainable - Held that - Under the present hire-purchase agreement, Tata Motors is the owner of the Mercedes Benz. Sundeep Polymers is the hirer. On Sundeep Polymers paying all the agreed instalments to Tata Motors, it had the option of taking the car as its property. Till that time, the car remained the property of the Tata Motors. This is no moneylending transaction. It is an agreement of hire-purchase, a bailment of the car with a provision for sale added. Bar of limitation - Held that - The hire-purchase agreement is dated 14th July 1998. The petition was filed on 20th June 2001. Even if the date of the agreement is reckoned as the starting point of limitation (which it cannot), the petition is in time. Sundeep Polymers was in default of payment of instalments between 14th August 2000 and 14th February 2001. Taking either of those two dates as the starting point of limitation, the petition is well within time. Whether appellant has an arbitral award in its favour and therefore cannot maintain this petition - Held that - A petitioning-creditor with a decree need not put it into execution before bringing a winding up petition. He can proceed either under Section 434(1)(b) or, having served a notice, move against the debtor-company under Section 434(1)(a) - Decided partly in favour of applicant.

Summary

Issues Involved:
1. Service of statutory notice.
2. Applicability of the Bombay Money-Lenders Act, 1946.
3. Limitation period for filing the petition.
4. Impact of an arbitral award on the maintainability of the petition.
5. Alleged defects in the vehicle.

Detailed Analysis:

1. Service of Statutory Notice:
The petitioning-creditor, Tata Motors Ltd, claimed that Sundeep Polymers Pvt. Ltd. failed to pay Rs.16,14,515/- under a hire-purchase agreement for a Mercedes Benz motor car. The respondent, Sundeep Polymers, argued that the statutory notice was not sent to the company's registered office address. However, evidence presented showed that the registered office address was correctly identified as 52, Mamta "A", New Prabhadevi Road, Mumbai 400 025. The court found no substance in the respondent's argument as the address used was correct and consistent with the company's own records.

2. Applicability of the Bombay Money-Lenders Act, 1946:
Sundeep Polymers contended that the transaction was a loan, not a hire-purchase agreement, thus falling under the Bombay Money-Lenders Act, 1946, which would render Tata Motors' claim non-maintainable due to the lack of a money-lending license. The court referenced the decision in Kunnul Noorudin v Jayabharat Credit and Investment Co. Ltd., which clarified that hire-purchase agreements do not constitute money-lending transactions. The court concluded that the agreement in question was a hire-purchase agreement, where Tata Motors remained the owner of the vehicle until all instalments were paid, thereby dismissing the applicability of the Bombay Money-Lenders Act.

3. Limitation Period for Filing the Petition:
The respondent argued that Tata Motors' claim was time-barred. The court noted that the hire-purchase agreement was dated 14th July 1998, and the petition was filed on 20th June 2001. Given that the default in payment occurred between 14th August 2000 and 14th February 2001, the court determined that the petition was filed within the limitation period and thus was not time-barred.

4. Impact of an Arbitral Award on the Maintainability of the Petition:
Sundeep Polymers argued that Tata Motors could not maintain the petition due to an arbitral award in its favor. The court cited established legal principles that a petitioning-creditor with a decree or arbitral award is not required to execute it before filing a winding-up petition. The court referenced multiple cases supporting this view and rejected the respondent's contention.

5. Alleged Defects in the Vehicle:
The respondent claimed the vehicle was defective and thus they should not be liable for the hire-purchase instalments. The court referred to Clause 11 of the Hire-Purchase Agreement, which included a comprehensive disclaimer by Tata Motors regarding the condition and functionality of the vehicle. The court found that the respondent had accepted the vehicle "as is" and was obligated to pay the instalments regardless of any defects. The court dismissed this defence as irrelevant to the proceedings.

Conclusion:
The court found no merit in any of the defences raised by Sundeep Polymers. The petition was admitted with conditions for payment and subsequent actions if the payment was not made. The court provided a final opportunity for the respondent to make the payment, failing which the petition would proceed to advertisement and further legal steps. The Company Application filed by Sundeep Polymers was disposed of as infructuous.