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TMI Blog1996 (5) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order regarding advertisement be stayed and further the proceedings be also stayed and the respondent be allowed to file a reply and the reply filed along with the application may be ordered to be taken on record. However, no reply in terms of the prayer, as mentioned along with ( C.A No. 738 of 1995) was filed by the respondent for obvious reasons. From the tenor and contents of the said application, it must be observed that it was a clever device by the respondent to create an impression that there was a bona fide dispute between the parties as the petitioner was a secured creditor, on the ground that security in shares as well as collateral security for alleged intercorporate deposit was given in favour of the petitioner. The managing director of the respondent had also given a personal guarantee to secure the repayment of intercorporate deposit. Another ground was mentioned in the said application that the respondent-company was a going concern and, therefore, the order passed by this court regarding the citation and admission of the respondent-company be revoked. The main thrust of the application was that the petitioner was a secured creditor and, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes. In the meantime, another application, being C.A. No. 57 of 1996, was filed by the petitioner for amending the petition under Order 6, rule 17 read with section 151 of the Code of Civil Procedure and rule 9 of the Companies (Court) Rules. By this application, the applicant/petitioner wanted to incorporate the following amendments : "5. That the applicant/petitioner seeks to make the following amendments (1)That in para 1 of the petition, the address of the petitioner's advocate may be changed from 113-114, Indra Prakash Building, Barakhamba Road, New Delhi-110 001 to C-577, Defence Colony, New Delhi-110 024. (2)That paragraphs 11( iii ) to 11( v ) of the petition may be deleted and in their place the following paragraphs may be substituted : ( iii ) That on September 27, 1991, the board of directors of Indana Spices and Food Industries Ltd. (respondent No. 1 in the petition) resolved and authorised Shri H.S. Jalan and Shri K.C. Jain to avail of intercorporate deposits of Rs. 150 lakhs on such terms and conditions as they may deem fit. The board also authorised Shri H.S. Jalan and Shri K.C. Jain to execute papers and documents which may be necessary for availing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Food Industries Ltd. on January 17, 1992, vide manager's cheque No. 026807, issued by Citibank, N.A. (2) That in para 11( vi ) of the petition, in the list of documents, at Sl. No. 4, the figure 15,000 may be substituted by 50,000. (3) That after para 11( vii ) of the petition, the following paragraphs may be added : ( viia ) That Indana Spices and Food Industries Ltd. confirmed the receipt of deposit of Rs. 50 lakhs vide their letter dated January 11, 1992, the deposit of Rs. 100 lakhs, vide their letter dated January 11, 1992, and the deposit of Rs. 32 lakhs, vide their letter dated January 17, 1992. ( viib ) That Indana Spices and Food Industries Ltd. further confirmed the receipt of the deposit, vide letter dated March 25, 1992, and also confirmed that the same was renewed for a further period of one year and the same had become due and payable to the petitioner and the deposits of Rs. 50 lakhs and Rs. 100 lakhs had become due and payable on January 6, 1993 and January 9, 1993, respectively. ( viic ) That, vide letter dated April 3, 1992, Indana Spices and Food Industries Ltd. confirmed that a sum of Rs. 50 lakhs was due and payable to the petitioner on January 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received replies dated February 4, 1993, from Shri Subash C. Verma, Advocate, 72, Janpath, New Delhi. ( viij ) That the petitioner lodged the share certificates along with duly filled in share transfer form with the company, vide letter dated March 19, 1993, but the same has not been done by the company. ( viik ) That the documents to prove the above facts are already on record and be treated as part of this petition. However, the same are filed along with the amended petition. (5) That para 12 of the petition may be deleted and in its place the following paragraph may be substituted : 12. That the company has failed to pay the debt/dues of the petitioner. Hence, it is clear that the company is unable to pay its debt and is liable to be wound up on this ground." Reply was filed by the respondent to this application. I would like to observe here that the amendment, which was sought, was not necessary as all the aforesaid documents were filed by the petitioner along with the original petition on March 10, 1995, and it was so noted in the order sheet dated March 13, 1995, and it was only after these documents were taken into consideration, that the court issued show-cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies (Court) Rules. In support of his contentions, he has cited Modi Chand Wahi v. National Paints (Private) Ltd. [1986] 60 Comp. Cas. 402 (P H). Mr. Behl has also contended that if the amendment is allowed, it will relate back to the date of presentation of the petition and, therefore, the affidavit in support of this company petition is a substantive evidence and if the same is defective, that defect cannot be cured. In support of his contentions, he has cited Registrar of Companies v. New Suraj Financiers and Chit Fund Co. Pvt. Ltd. [1990] 69 Comp. Cas. 104 (P H). The other ground, which has been urged before me by learned counsel for the respondent, is that the respondent has given adequate security as shares numbering 2,00,000 were given to the petitioner having market value of Rs. 35 lakhs. In addition to that, collateral security for a building to be constructed on a plot of land in the shape of an agreement between Smt. Pushpa Lata Bansal and Wisdom Investments Limited wherein the said Wisdom Investments Limited have offered and agreed to undertake and carry out, develop and construct a commercial complex on the said plot of land bearing No. 76, situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjhunwalla, AIR 1976 SC 565 ; [1976] 46 Comp. Cas. 91 . Lastly, Mr. Behl has contended that no statutory notice, as contemplated under sections 433, 434 and 439 of the Companies Act, has been served on the respondent-company and in the absence of any notice and receipt thereof placed on record, the petition for winding up is not maintainable. In support of his contention, he has cited Kalra Iron Stores v. Faridabad Fabricators P. Ltd. (No. 2) [1992] 73 Comp. Cas. 337 (Delhi). Adverting to the arguments advanced by learned counsel for the respondent, Mr. Arun Bhardwaj, learned counsel appearing for the petitioner, has contended that what is postulated under rule 11, sub-rules 18, 21 and Form 3 of the Companies (Court) Rules has been fully complied with. He further contended that it is not necessary for the petitioner to aver in the affidavit that the company is unable to pay its debt if the same has been mentioned in the petition for winding up. He has argued that in para 3 of the supporting affidavit filed with the petition, it has been specifically averred that the contents of the petition be read in addition to this affidavit. In para 3 of the affidavit, it has also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not traceable with Wisdom Investment Limited. In such circumstances, the deponent cannot admit or deny as to whether there is a valid and binding security created by Wisdom Investments Limited in favour of the petitioner-company. The deponent has stated that the petitioners are the secured creditors on the basis of their averments and admissions made in the petition in para 11. It is reaffirmed that the deponent has stated that the petitioners are the secured creditors on the averments made by the petitioner in the petition. In such circumstances, the deponent is not in a position to confirm as to whether Wisdom Investment Limited has created a legal, valid and equitable charge on their property, as described in the photocopy of the alleged agreement filed by the petitioner." Mr. Bhardwaj has also contended that the petitioner has never evaluated the market value of these shares, numbering 2,00,000 at Rs. 35 lakhs. In the correspondence, the same has come on account of valuation fixed by the respondent-company but, as a matter of fact, the respondent was never interested either in transferring these shares in the name of the petitioner-company nor did the shares have any marke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er letter dated January 11, 1992, by the respondent-company, signed by Mr. K.C. Jain, inter alia , stating that the respondent-company confirms the intercorporate deposit of Rs. 50 lakhs received by them by way of renewal of deposit of Rs. 50 lakhs, which was initially provided to the respondent on October 8, 1991, by means of cheque No. 617507. A similar letter was also written on the same date, i.e. , January 11, 1992, by the respondent in relation to the intercorporate deposit of Rs. 100 lakhs. On January 17, 1992, a fresh intercorporate deposit of Rs. 32 lakhs was received by the respondent-company, vide cheque dated January 17, 1992, for a period of one year. An advance cheque No. 178624, drawn on Central Bank of India, was issued by the respondent in favour of the petitioner dated January 17, 1993, i.e. , date of maturity. The same was filed along with the original petition filed by the petitioner and the same is at page 44 of the paper book. Similarly, for repayment of Rs. 100 lakhs a cheque bearing No. 178605 dated January 17, 1993, drawn on Central Bank of India was issued by the respondent-company. At page 36 of the paper book, there is a letter from the respondent dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a dilatory tactic, devoid of any force. Dealing with the plea of the respondent regarding creation of collateral security, from the tenor, contents and documents placed on record by Wisdom Investments Limited, I have seen that this document, which creates collateral security in favour of the petitioner, is not even executed by Wisdom Investments Limited. In the absence of any document executed by Wisdom Investments Limited in favour of the petitioner, it cannot be said that there is any collateral security, which has been created in favour of the petitioner. Therefore, the arguments of counsel for the respondent are legally untenable and factually incorrect. Even otherwise in his affidavit, which I have referred to earlier, Shri H.S. Jalan has now taken the plea that as no charge was registered, the collateral security is not binding. That shows the mala fides of the respondent that on the one hand arguments have been advanced that on account of the collateral security the winding up petition is not maintainable and on the other hand an affidavit has been filed that no valid binding security exists in favour of the petitioner. In view of the correspondence on record and the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition and thereafter filing an application for modification/ vacation of the order passed by this court for citation and averring in that application that reply is being filed along with this application but not filing the reply on record, speaks volumes about the conduct of the respondent. The respondent was trying to play hide and seek before this court. Ultimately, it was on account of the specific direction passed by this court that the respondent filed an affidavit dated December 7, 1995, which I have referred to above, admitting the receipt of intercorporate deposit of Rs. 182 lakhs. In response to the directions of this court when another affidavit was filed by the respondent dated March 27, 1996, wherein it has tried to deny the giving of collateral security by way of collaboration agreement not binding and the respondent's stand with regard to the shares numbering 2,00,000 which, according to the respondent, were given to the petitioner as security, whose value cannot be given by the petitioner, speaks volumes of his conduct and intentions. In the aforesaid affidavit of Mr. Jalan, chairman and director of the respondent-company, it is admitted that the petitioner lodge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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