2016 (10) TMI 1325 - HC - Companies Law

Seeking winding up of the respondent company - no reply to the statutory notice and thus the presumption that the respondent company is unable to pay debts as and when they arise in the usual course of business - HELD THAT - The fact that the option under clause (6) was exercised or at least is deemed to have been exercised is evident from the correspondence which demands payment of monies. In the circumstances, it is not open for the company to now contend that the petitioner could have sought performance of the alleged agreement. There is some doubt as to whether the agreement was entered into or at all. It is conceded by Mr. Khandeparkar that the agreement is presently not available and in any case not registered. The agreement for sale is not relied upon in the petition which would normally have been the case. However, the fact remains that the cheques have been issued there is no explanation forthcoming from the respondent company as to why these cheques have been issued. The controversy relating to the agreement for sale is something that can gone into in appropriate proceedings. The cancellation agreement on the basis of which the petitioner has proceeded is dated 2nd April, 2014. The first of the cheque issued pursuance to the agreement is also dated 2nd April, 2014 - However, the petitioner waited for over almost 6 months to deposit the cheque and admittedly first cheque was deposited only on 18th August, 2014 well beyond its validity and therefore the bank returned the instrument for the reason that the instrument was out of date/stale. Thus, what remains to be seen is whether the second cheque was deposited in bank and why the same was not honoured. Exhibit H to the petition is a copy of the dishonour memo received by the petitioner from their bank along with the copy of the cheque dated 15th June, 2014. The amount of ₹ 5.90 crores at least appears to be due and in the light of the above facts the respondent must be put to terms - The respondent company shall deposit a sum of ₹ 5.90 lakhs within six weeks from today - In the event deposit is made and if a suit is filed by the Petitioner, the amounts so deposited will be transferred to the suit account and and to be invested initially for a period of one year to be followed by further renewals.

Summary

Issues:
Petition seeking winding up of respondent company under Section 433(e), 434, and 439 of the Companies Act, 1956 due to non-payment of a sum of ?21,76,37,260 arising from an agreement for surrender of rights to purchase two flats.

Analysis:

1. Agreement Details:
The petitioner entered into an agreement with the respondent company for surrendering rights to purchase two flats in exchange for a payment of ?18 crores. The agreement specified payment through post-dated cheques and included an interest clause. The petitioner claims that the first two cheques were dishonored, leading to negotiations and assurances from the respondent regarding payment.

2. Correspondence and Statutory Notice:
Despite repeated reminders and a statutory notice, the respondent failed to respond or make the payment. The respondent sought time citing other legal proceedings, but later decided not to file a reply to the petition, arguing that the agreement lacked consideration and the existence of the sale agreement was disputed.

3. Legal Arguments:
The respondent's counsel contended that no consideration flowed from the petitioner and that the sale agreement was questionable due to ongoing litigation. However, the petitioner argued that the option under the agreement was exercised through correspondence demanding payment, which went unanswered by the respondent.

4. Court's Decision:
The court analyzed the agreement, correspondence, and arguments presented. It noted the issuance of cheques by the respondent, which implied consideration under the Negotiable Instruments Act. The court found discrepancies in cheque deposit timelines and dishonor reasons. As a result, the court ordered the respondent to deposit a specific amount within a set period. Failure to comply would lead to the petition being admitted for winding up, with provisional liquidation and publication requirements.

5. Order by the Court:
The court directed the respondent to deposit a specified amount within six weeks and appointed the Official Liquidator as the Provisional Liquidator of the respondent company. The petitioner was instructed to pay publication charges, and the Liquidator was tasked with taking charge of the company's assets immediately. The court's order was to be forwarded to the respondent's registered address promptly.

This detailed analysis of the judgment highlights the key legal aspects, arguments, and the court's decision regarding the petition seeking winding up of the respondent company.