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2023 (9) TMI 528 - HC - Companies LawPetition for winding up of company - umbrella guarantee - Recovery against the Guarantor of the loan for default in payment by the company - whether the defence raised by the Respondent in the Company Petition was genuine and whether there was a serious dispute about the debt? - HELD THAT - In the case of NEELKANTH DEVANSH DEVELOPERS PRIVATE LIMITED VERSUS URBAN INFRASTRUCTURE VENTURE CAPITAL LIMITED 2016 (5) TMI 884 - BOMBAY HIGH COURT , a Division Bench of this Court while dealing with Company Appeal wherein the order of learned Single Judge in Company petitions was challenged and it was held that This Court therefore while exercising its appellate jurisdiction under Clause 15 of the Letters Patent Act is not expected to interfere with the order passed by the learned Single Judge, unless it comes to the conclusion that the finding is perverse or is based on material which is not part of the record. Future some relevant dates are material for the purpose of considering the dispute raised before this Court. The Respondent Company was incorporated under the Companies Act, 1956 somewhere in January 1998. There was some joint venture agreement executed between the Directors of the Respondent with that of the Appellant. The memorandum refers to a meeting dated 19.12.1997 concerning joint venture agreement. It thus shows that the Respondent Company was in existence prior to the joint venture agreement between its Directors and the Appellant somewhere in December, 1997 - It is a matter of record that the Appellant initially refused to produce the annexures on the precise ground that such enclosure is a confidential document and that same is not required for the purpose of deciding the petition. The question remains as to how in the enclosure to the bank guarantee dated 20.12.2004 reference to advance/loan of ₹6 crores of the Respondent by the branch of the same bank at Mumbai appears. Admittedly, on 20.12.2004, there was no sanction letter issued by the Mumbai branch of the said bank offering loan of ₹6 crores to the Respondent. Thus, the annexure wherein reference to the Respondent appears as on 20.12.2004 and in connection with loan of ₹6 crores appears to be seriously doubtful. The same aspect has been considered by the learned Single Judge in the impugned judgment. We do not consider that such observations of the learned Single Judge are in any way arbitrary or perverse. So-called admissions on the part of Respondent regarding the bank guarantee - HELD THAT - Upon considering such documents as referred by Mr Rao containing admissions on the part of Respondent, it is also found that though there is some reference to the guarantee issued by the Appellant for the said loan, it does not specifically refer to the guarantee dated 20.12.2004. The Appellant approached the Court with a specific case that the loan issued in favour of Respondent was secured by a bank guarantee dated 20.12.2004 and therefore, it was incumbent upon them to satisfy this Court that such bank guarantee in fact refers to the loan issued in favour of Respondent on 10.01.2005. Thus, the defence raised by the Respondent cannot be considered as moonshine defence and there appears to be substantial defence raised with regard to claim of the Appellant for recovery of the amount of more than ₹2 crores which the Mumbai branch allegedly recovered from the Appellant on the basis of bank guarantee dated 20.12.2004 - Though Respondent raised other aspects with regard to malicious attempt on the part of Appellant, collusion between the Appellant and the bank, such aspects were not raised before the learned Single Judge and further, such aspects were not considered and decided in the impugned order - such aspects raised on behalf of Respondent in this appeal cannot be considered. The Appeal stands rejected.
Issues Involved:
1. Validity of the Bank Guarantee 2. Admission of Liability by the Respondent 3. Bona Fide Dispute and Defence 4. Malicious Prosecution and Collusion Summary: 1. Validity of the Bank Guarantee: The appellant challenged the judgment of the learned Single Judge rejecting the Company Petition for winding up the respondent company. The appellant argued that they provided a bank guarantee for the respondent's loan, which was later invoked by the bank due to the respondent's default. The appellant claimed entitlement to recover the amount from the respondent. The respondent, however, contended that the bank guarantee was not valid for the loan in question and raised suspicion about the annexures provided by the appellant. The court observed that the bank guarantee dated 20.12.2004 did not specifically refer to the loan sanctioned on 10.01.2005, making the annexures highly suspicious. 2. Admission of Liability by the Respondent: The appellant argued that the respondent admitted the liability in their balance sheets and other documents. The learned Single Judge, however, found that the so-called admissions did not specifically relate to the bank guarantee dated 20.12.2004. The court agreed with this observation, noting that the admissions referred to some guarantee but not the specific one in question. 3. Bona Fide Dispute and Defence: The respondent raised a substantial defence, arguing that the bank guarantee was not relevant to the loan sanctioned in 2005. The court emphasized that if the debt is bona fide disputed and the defence is substantial, the company should not be wound up. The court found the respondent's defence to be bona fide and substantial, not a mere moonshine defence, and thus upheld the learned Single Judge's decision. 4. Malicious Prosecution and Collusion: The respondent alleged malicious prosecution and collusion between the appellant and the bank. However, these issues were not raised before the learned Single Judge and were not considered in the impugned order. The court noted the timing of the loan recall close to the cancellation of the joint venture but did not deliberate further on this aspect. Conclusion: The appeal was rejected, and the court upheld the learned Single Judge's decision, finding no arbitrary, capricious, or perverse findings in the impugned order. The parties were directed to bear their own costs.
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