2017 (9) TMI 1940 - HC - Companies Law

Winding up of the respondent company - inability to pay its debts as and when they arise - due towards repayment of credit facilities due towards repayment of credit facilities - HELD THAT - The Company is clearly bound and liable to pay amount guaranteed under the Corporate Guarantee. They have failed and neglected to pay their debts thus inviting the deeming provisions of the act of commercial insolvency. Learned Counsel for the respondent submitted that apart from the defences raised in affidavit in reply dated 30th January 2017 there are no other defences that the company can press. The affidavit in rejoinder reiterates the claim and denies contentions in the reply. The petition is also advertised as directed in the order of 19th October 2015. Learned Counsel for the petitioner submitted that the affidavits of service are already on record and find that they are already filed as of 13th April 2017. Affidavit of publication in two local newspapers and a further affidavit of publication in Maharashtra Government Gazette on 13th April 2017 is also seen to have been filed in this Court on 25th April 2017. The respondent Company M/s. Classic Diamond (India) Limited shall be wound up by and under the supervision direction and order of this Court in accordance with the provisions of the Companies Act 1956 - Petition is allowed.

Summary

Issues:
Petition seeking winding up of respondent company for failure to pay debts; Invocation of Corporate Guarantee; Defenses raised by respondent; Finality of previous orders; Appointment of Liquidator.

Analysis:
The petitioner filed a petition seeking the winding up of the respondent company due to its inability to pay debts as they arise, with a claimed amount of USD 5,215,281.86 owed under a Corporate Guarantee provided by the respondent for a credit facility enjoyed by another company. The guarantee was invoked when the borrower defaulted, and despite statutory notices and court proceedings, the respondent failed to pay the outstanding amount. The respondent raised defenses related to the jurisdiction of the petitioner's branch, stamping of the guarantee, and lack of certification of the claim, but these defenses were deemed insufficient by the court. The order for winding up was challenged in appeal, but the appeal court upheld the decision, leading to the finality of the order. The respondent company was found liable to pay the guaranteed amount, leading to the court ordering the winding up of the company and appointing the Official Liquidator to take charge of the assets and properties of the respondent company without delay. The respondent company waived service of the petition, and the petitioner was directed to forward a copy of the order to the company's registered address for compliance.