9911796707
TMI Blog2004 (8) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, 7 lakh shares of Rs. 10 each of DCM Daewoo Motors Ltd. under share certificate No. 124708 to 124710 with distinctive number of shares as 20020231-20720230 as security towards the aforesaid two deposits. The said ICDs were for a period of 120 days and the respondent-company was to repay the same together with interest at the rate of 25.5 per cent per annum and in case of default, the rate of interest was to be enhanced by additional 11 per cent per annum. Certain cheques were issued which were dishonoured. Thereafter, only a sum of Rs. 5 lakhs was paid to the petitioner on 1st August, 1998. The petitioner made demand for the balance amount together with interest, thus demanding a total sum of Rs. 3,15,02,226 as on 10th August, 1998. Even statutory notice was issued. Since no amount was paid, the petition for winding up has been filed. 3. The respondent-company appeared after service of notice and filed the reply. However, during arguments, the aforesaid loan transaction was not disputed and what was stated that the company had run into financial difficulties and, therefore, not in a position to pay the contractual rate of interest. Order dated 5th October, 1999, reflective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the Joint Registrar attached to this Court to be associated with the sale of shares. The Joint Registrar was asked to convert the larger denomination shares into small denomination in consultation with the petitioner and the respondent. The order sheet of the case reveals that the matter was listed before the Joint Registrar thereafter from time-to-time and this exercise of converting the share scrips into smaller denomination was carried out. This exercise took considerable time and the progress was noted by the Joint Registrar on various dates in his orders. On 23rd May, 2000, the Company Secretary of Daewoo Motors appeared before the Joint Registrar and handed over 12,000 share certificates in the lot of 50 shares each ( i.e., 6 lakh shares) to the Advocate for the petitioner-company. Counsel for the respondent sought time to explore the possibility of getting best price of the shares and the matter was adjourned for this purpose. On 12th July, 2000, counsel for the petitioner was directed by the Joint Registrar to contact counsel for the respondent to find out if he has got any offer for the shares. 6. Order sheet, therefore, is silent on this aspect as in the meantime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motors India Ltd. The grievance made in the application was that even when the amount had already been paid, winding up petition was not withdrawn and the petitioner had not released the said 7 lakh shares. It was also stated that value of these shares was dwindling and there was an apprehension that if the shares are not disposed of immediately, value of the same would become negligible in near future. A prayer was made to get the shares dematerialised, if not already done and appoint an officer of the Court to dispose of these shares and collect the proceeds and keep the said proceeds in the Court. 9. On this application, order dated 16th December, 2002, was passed by this Court directing the Joint Registrar, who was appointed pursuant to the orders dated 3rd November, 1999, to take necessary steps for sale of the said shares in association with the petitioner. The order was passed after taking note of the statement of the petitioner to the effect that it had no objection to the sale of the said shares. The Court also directed that the proceeds of the sale be deposited with the Registrar of this Court. On 20th December, 2002, the Court further directed that the said sale shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 Thus, according to the respondent-company, the petitioner is guilty of repeated violations of various orders and has acted in contumacious disregard of these orders. Apart from prayer for initiating contempt action, direction is also sought against the petitioner-company to forthwith deposit the proceeds of sale of the shares in this Court. 11. Notice in this application was issued on 25th March, 2003. Reply to this application was filed by the petitioner on 24th September, 2003. Within one month thereafter, i.e., on 29th October, 2003, the petitioner moved CA No. 1206/2003 seeking recall of orders dated 16th December and 20th December, 2002. l2. The case of the petitioner in reply to CA No. 346/2003 and in CA No. 1206/2003 is that the Joint Registrar was appointed primarily for the purpose of conversion of the shares in small denomination and the petitioner always understood that the shares were to be sold by the petitioner itself after the necessary exercise of converting the shares into small denomination was carried out. It is also stated that even when order dated 5th October, 1999, was passed whereby the respondent-company agreed to pay Rs. 1.25 crores by 3rd No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve. I am of the view that the factors and circumstances which go against the petitioner are the following : ( i )Order dated 3rd November, 1999, was passed, which is already reproduced above, as per which the Joint Registrar was appointed who was to be associated with sale of shares. He was directed to convert large denomination into small denomination shares. I may reproduce the relevant portion of the directions once again "On the request of the parties, I appoint the Joint Registrar attached to the Company Court, shall be associated with the sale of the shares. It is stated that larger denomination shares will have to be converted into small denomination and that exercise shall be conducted by the Joint Registrar in consultation with the petitioner and the respondent." It is the contention of learned counsel for the petitioner that the appointment of Joint Registrar was for the purpose of conversion only. The portion of the order reproduced above may not indicate so. Order can be read to mean that the Joint Registrar was assigned both the functions of getting the shares converted into smaller denomination and also to be associated with the sale of shares. ( ii )Even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conversion of the shares in small denomination from Daewoo Motors India Ltd., these share scrips were transferred in the name of the petitioner. Thus, the petitioner was made owner of these shares and, therefore, nurturing this impression that the shares were to be sold by the petitioner now could be the bona fide impression though, as stated above, it would have been proper to seek clarification. ( iv )Then there are certain orders on record which may give an impression that the petitioner was allowed to sell these shares. The conduct of the petitioner, therefore, in selling these shares cannot be said to be contumacious or wilful disobedience of the orders dated 3rd November, 1999, of the Court. ( v )Most significant factor, which would govern the course of action to be adopted is the better price realised by the petitioner. From the sale of these shares, which was conducted in June 2000 the petitioner could muster a sum of Rs. 34,50,903.43 for 7 lakh shares. On this reckoning, average sale price comes to little more than Rs. 5 per share. Interestingly, when the respondent filed CA No. 1312/2002 in December 2002, ignorant of this sale, the averment made in the application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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