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TMI Blog2006 (1) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... t and Co., Cotton Merchant and Commission Agent, 4481, Dau Bazar 2nd Floor, Cloth Market, Delhi. The goods were supplied from 1-1-1995 to 1-4-1995. The invoice numbers, quantity and price of bales are given in paragraph 5. These figured for a total amount of Rs. 72,11,934. The agreed mode of financial transaction was to raise a letter of credit in State Bank of India, Indore and allowed the petitioner to draw the bills under letter of credit and get the payment from the bank against hundi. It is alleged in paragraph 8 that part payment was made by the respondent-company. It paid Rs. 59,97,129 leaving an outstanding balance of Rs. 12,14,805. The respondent-company made unreasonably delay in making payment of the outstanding on which a regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd submissions made at the hearing by secured creditors, SIA along with CA and the company, the Bench noted that SIA had explained in its report that the company had not provided for doubtful debts, advances given in earlier years to Modi group companies declared sick and directed to be wound up, provisions for sales tax demand for 1991-92 and 1992-93, advances in the nature of loans not recoverable, arrears of PF/ESI not been deposited, demand for arrears of electricity raised and others. All these non-provisions had been pointed out by the auditors of the company. The SIA had also stated that the entries pertaining to sale of shares and tenancy rights were not in accordance with the Accounting Standards. SIA had specifically said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be sullied. Erosion of net worth is not the only criteria for claiming sickness. The conduct and actions of the management as well as faithful observance of Accounting Standards and policies are equally important. The company has singularly failed to come clear on these accounts. We accordingly dismiss the reference filed by the company as non-maintainable. 22. The Bench further directs that the balance SIA fee be borne by the secured creditors on pro rata basis." 5. The proceedings before the BIFR establish that the respondent-company has completely lost its substratum. Shri B.K. Deb, AGM, Punjab National Bank made submissions before the BIFR that the accounts of the company did not reflect true and fair picture of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returned with the endorsement that the company is closed. There is no averment in the counter affidavit or supplementary counter-affidavit that the respondent-company was receiving other letters or correspondence at the same address. 8. Shri N.K. Rajvanshi, learned counsel for the petitioner has rightly relied upon judgments in Raj Kumar Bros. v. Organic Chem Oils Ltd. [1998] 93 Comp. Cas. 386 (Punj. Har.); Siddhartha Apparels (P.) Ltd., In re [1986] 59 Comp. Cas. 435 (Cal.); G. Claridge Co. Ltd. v. Nav Bharat Investments Ltd. [1977] 47 Comp. Cas. 428 (Bom.); Simon-Carves India Ltd. v. Punjab Sulphur Products Ltd. [1987] 62 Comp. Cas. 214 (Punj. Har.) and Chhabra Steels Strips (P.) Ltd. v. Haspa Wheels (P.) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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