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TMI Blog2006 (7) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... both the respondents and one Jose Christovam Pinto, Proprietor of Pinto Real Estate had entered into an agreement dated 17-2-2000. In terms of the said agreement, the petitioner had advanced to M/s. Sahajanand a sum of Rs. 50,00,000 on terms and conditions stated therein. The said sum of Rs. 50,00,000 was advanced to the petitioner by way of cheque dated 17-2-2000, on the condition that respondent M/s. Sahajanand would repay the same to the petitioner on or before 17-2-2001, by demand draft with financing charges at the rate of 2 per cent per month. M/s. Sahajanand had also agreed to deposit 13 cheques drawn on Punjab National Bank towards interest due at the end of each month and it was further agreed that in case the said cheques were returned unpaid the entire amount of Rs. 50,00,000 along with financing charges due thereon and other costs would be due and payable immediately. It was also stipulated that in case there was failure on the part of M/s. Sahajanand to make the payment of the amount due to the petitioner under the agreement, M/s. Sahajanand were to pay compensation calculated at 4 per cent per month on the outstanding amount. Respondent-Pinto Trade Commerce and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions on account of bouncing of the said cheques and it is submitted by learned counsel Mr. Bodke on behalf of the respondent M/s. Sahajanand that during the trial of the said criminal cases filed by the petitioner for bouncing of the said cheques the said amount of Rs. 6,10,000 was paid. 5. The petitioner, therefore, sent a notice to M/s. Sahajanand being the principal borrower, to M/s. Pinto Trade Commerce being the first guarantor, as well as to Mr. Rui Pinto being the second guarantor calling upon the respondent-companies as well as Mr. Rui Pinto to pay the said sum of Rs. 50,00,000 along with financing charges at 2.2 per cent per month from 17-2-2000 to 16-2-2001, and further compensation at the rate of 4 per cent per month from 17-2-2001, till full and final payment of the outstanding amount was made within 15 days failing which proceedings would be taken including filing of a petition before this Court. The respondent M/s. Sahajanand replied to the notice dated 7-8-2001, while respondent M/s. Pinto Trade Commerce did not reply to the said notice. In the reply of M/s. Sahajanand the liability towards the petitioner was not specifically denied but what was stated was that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said interest would be paid along with each of the instalments. In case of default by the respondent M/s. Pinto Trade Commerce or Mr. Rui Pinto to pay the said amount and in case of dishonour of the cheque that may be issued by them for the payment of the said amount, respondent M/s. Sahajanand notwithstanding any remedial action initiated by the petitioner against respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto, should pay same to the extent of the unpaid amounts with 30 days notice by the petitioner. 8. There is no dispute between the parties that the earlier liabilities incurred by the respondents herein along with the said Mr. Rui Pinto were replaced under the award dated 3-12-2003, and were to be met as per the clauses of the said award, particularly clause 5 thereof, the substance of which has been reproduced hereinabove after the said award was filed before this Court on or about 5-1-2004. Since then, the parties have again been seeking time from time to time for settlement of their disputes under the said award. July 14, 2006 : 9. It has been submitted by learned counsel Mr. Shivan Dessai that in terms of clause 5 of the award the sum of Rs. 63,50,000, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under section 439(8) for the leave of the court for the admission of the petition and no advertisement of the petition shall be made unless the leave has been granted, or, where the leave has been granted subject to any conditions precedent to the admission of the petition, unless such conditions have been satisfied. Shri Dessai has submitted that the petitioner was a contingent creditor and liability of the respondent-company M/s. Pinto Trade Commerce, would arise only in the event, the principal borrower, i.e., M/s. Sahajanand had failed to pay the amount to the petitioner. In support of his submission, Shri Dessai has placed reliance on a Division Bench judgment of the Gujarat High Court in the case of Anil Vasudev Salgaonkar v. Kermeen Foods (P.) Ltd. [1985] 58 Comp. Cas. 156 . What is observed in this decision is as follows : "That the petitioner may ultimately become liable to answer the liabilities of the respondent-company is evident. In that event, the company will become a debtor to the petitioner and that is the reason why the petitioner claims to be a contingent creditor. The contingency is that of the principal debtor not discharging his obligations to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents and the said Mr. Rui Pinto, obviously because by then, respondent M/s. Sahajanand, being the principal borrower, had not paid the amount due to the petitioner as stipulated in the said agreement and, therefore, the petitioner was compelled to call upon the respondent M/s. Pinto Trade Commerce, being the first guarantor, to pay the amount due to the petitioner. It is nobody s case that the petitioner was paid anything at all until the filing of the petition, the amount due to the petitioner under the said agreement. It is, therefore, obvious that on the date the petition was filed, the petitioner was at liberty to proceed to recover the money due to the petitioner from the respondent M/s. Sahajanand, being the principal borrower as well as from the respondent M/s. Pinto Trade Commerce, being the first guarantor. In other words, the respondents in both the petitions at the time of filing of the petition, had a liability towards the petitioner in praesenti or in other words an existing obligation to pay the sum of money. In other words, the petitioner was entitled to claim its payment presently either from M/s. Sahajanand, being the principal borrower or the respondent M/s. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pointed out on behalf of the petitioner, the thrust of the defence of each of the respondents is that the petitioner should proceed against the other without a specific denial of their liability towards the petitioner. In any event, it must be stated that in terms of the said agreement dated 17-2-2000, the respondent M/s. Sahajanand had agreed to pay the amount received by him and so also the respondent M/s. Pinto Trade Commerce when called upon by the petitioner in case of default made by M/s. Sahajanand. If at all the parties went for further arbitration which culminated into an award dated 3-12-2003, it was due to the differences between the respondent inter se and the said Mr. Rui Pinto. The said award was made after the parties filed consent terms dated 14-11-2003. There was no dispute at all as regards the liability of the respondents towards the petitioner in terms of the first agreement dated 17-2-2000 and, therefore, the second contention of the learned advocate Shri Dessai, has got to be rejected. 15. The third objection which is taken in common on behalf of both the respondents is that the respondents were required to give fresh notice in terms of section 434 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bilities of the company. If the case under section 434(1)( a ) is not proved, he can prove his case under section 434(1)( c ) and only because the notice was not validly served, the applica-tion for winding up cannot be thrown out but the petitioner has proved the indebtedness of the company as also its failure/or negligence to pay the debt in question Ramdas and Co. v. Kitti Steels Ltd. [2001] 103 Comp. Cas. 199 (AP). For the purpose of relying upon the deemed inability of the company, the creditor had to strictly comply with the requirement of sending the notice of demand in terms of section 434(1)( a ) and if the said section is not been complied with, the rule of presumption of inability to pay the debts against the company, would not be invoked. At the same time, even without invoking the deemed inability of the company to pay its debts, a creditor can seek for winding up of the company under section 434(1)( a ) of the Act on the ground that the company is unable to pay its debts Rajearajeswari Packaging Products v. Dev Fasteners Ltd. [2002] 108 Comp. Cas. 715 1 (Mad.). Section 434 envisages that when a notice is served under that section in a manner described an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expected of the petitioner to have given a fresh notice, even if required to be given, after the award was filed. This would mean that the petitioners would have to withdraw the petitions, give a notice and then come back to the court with fresh petitions. In my view, the said award can be taken as a subsequent event taken place between the parties and these petitions now will have got to be decided on the basis of the indebtedness of the respondents, who are the petitioners, based on the said award. The courts can and in many cases, do take cognisance of event and development taken place subsequent to the institution of proceedings for making the right or remedy claimed by a party just and meaningful and so as to be legally and factually in accord with the current realities. Although the petitions were filed based on the agreement dated 17-2-2000, the said agreement has now given way to the award made by the consent of the parties and the indebtedness towards the petitioners by the respondents has now got to be considered in the light of the said award and that takes us to the last submission of Shri Bodke, learned counsel on behalf of the respondent M/s. Sahajanand. 18. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said award. Apart from the said two notices dated 29-12-2003, addressed to Mr. Rui Pinto, proprietor of M/s. Pinto Real Estate and to respondent M/s. Pinto Trade Commerce, calling upon them to pay the amount of Rs. 25,00,000 due on the cheque issued, the proceedings before this Court have been adjourned from time to time with a view to settle the matter between the parties. The award is dated 3-12-2003, and since then, the proceedings had been adjourned from time to time and it is difficult to believe that respondent M/s. Sahajanand, till date, does not know that respondent M/s. Pinto Trade Commerce or for that matter Mr. Rui Pinto have not complied with clause 5 of the award. The word "notice" cannot be defined correctly and fully and it means and includes information, intimation, knowledge, etc. In the course of settlement proceedings, the respondent M/s. Sahajanand must have certainly come to know that respondent M/s Pinto Trade Commerce or for that matter, Mr. Rui Pinto, had not paid the amount due by them in terms of clause 5 of the said award. After all, the amount of Rs. 85,000, was to be paid by respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto, on behalf of responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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