9911796707
TMI Blog2009 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... oners in the company petitions are his nominees. Both the Petitioners have denied this allegation. There is nothing on record except bare statement made on behalf of the Appellant-company supporting such allegation. Therefore, by no stretch of imagination the Petitioners in company petitions can be said to be guilty of suppressing material fact. Appeal dismissed. - APPEAL NOS. 513 AND 514 OF 2007 IN COMPANY PETITION NOS. 726 OF 1998 AND 171 OF 2000 WITH NOTICE OF MOTION NOS. 3002 AND 3003 OF 2007 - - - Dated:- 12-3-2009 - D.K. DESHMUKH AND A.A. SAYED, JJ. S.H. Doctor and J.P. Sen for the Appellant. Dr. V.V. Tulzapurkar, B.K. Bali and Pramod Kumar for the Respondent. JUDGMENT D.K. Deshmukh, J. - By both these appeals the Appellant challenges common order passed by the learned Single Judge of this court dated 29-6-2007 in Company Petition No. 726 of 1998 and Company Petition No. 171 of 2000. Both these company petitions were filed by two different Petitioners seeking the same reliefs namely winding up of the Appellant-company. The grounds on which the order of winding up of the Appellant-company was sought was also the same, and therefore, in our opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellant-Company and the Company agreed to repay the same along with interest thereon at the rate of 18 per cent p.a. with quarterly rests. 5. The Appellant-Company thereafter, along with its forwarding letter dated 7-6-1994 sent to the petitioner-Kunal a cheque for an amount of Rs. 39,40,000 towards repayment of a part of the loan and another cheque for Rs. 9,31,707 towards the interest due up to 31-5-1994 at the rate of 18 per cent p.a. as agreed. 6. The Appellant-Company thereafter paid further amounts towards repayment of the loan by a cheque dated 8-7-1994 for Rs. 39,40,000, a cheque dated 4-8-1994 for Rs. 39,71,000 and a cheque dated 8-2-1995 for Rs. 20,00,000. The company also paid to the petitioner-Kunal interest due on the amount of the loan up to 31-12-1994. The appellant-company thereafter failed to pay the balance amount of the loan or the interest due thereon to the petitioner-Kunal. That from the certificate issued by the Company, it was evident that the Company paid Income-tax deducted from the interest accrued and payable to the petitioner-Kunal for the years ending on 31-3-1995 and 31-3-1996 although the amount of the said interest accrued had not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member and a shareholder of the Company the petitioner-Kunal was entitled to receive notices of the Annual General Meetings of the company as also the copies of the annual accounts of the company every year. The petitioner-Kunal had however, till date, not received any notice from the company about the Annual General Meeting, if any, held by it. The petitioner-Kunal was therefore, not aware of the present status or development of the said property purchased at Worli or any other activities, if any, carried on by the Appellant-Company. In the circumstances, the petitioner-Kunal had lost confidence in the present management of the company and was therefore, entitled to seek winding up of the company. The petitioner-Kunal averred that it was therefore, just and equitable to wind up the company in the interest of its creditors and shareholders. After filing of the petition and the service of the same upon the company, an affidavit-in-reply affirmed by the managing director of the Company Mr. Kanayo Khubchand Motwani duly affirmed on 18-12-1998 came to be filed in the petition. It was contended on behalf of the appellant-company that the petition filed by the petitioner-Kunal was mala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that after such issue their holding in the entire capital of Rs. 3,00,000 shall be in the ratio of 34:33:33 respectively. It was contended that paragraph-2 of the agreement provided that Shri Manohar T. Makhija shall be the Chairman, Shri K.K. Motwani shall be the Managing Director and Shri Ramesh T. Khanchandani shall be the Director of the Appellant-Company. In paragraph-4 it was provided that the parties to the said agreement shall contribute or arrange such loans and funds as may be required for the purpose of paying for the property, stamp duty and other expenses and development and construction cost. In paragraph-8 it was provided that for the purpose of development of the said property, all major decisions such as appointment of Architects and sales policy shall be taken unanimously. However, other decisions shall be taken by the Managing Director who shall be in-charge of the construction. In paragraph-9 it was provided that Shri K.K. Motwani and his nominees shall bring in loans and deposits of Rs. 6 crores and interest @ 18 per cent per annum will be paid by the Company thereon. That, Shri Manohar T. Makhija and his nominees shall bring in loans and deposits of Rs. 9 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposal of its complaint with the Finance Minister within next 3 to 4 months. It was contended that the Appellant-Company was legally obliged to refund in priority, the deposits of the prospective flat owners who have booked the flats in the proposed building to be constructed on the said plot of land at Worli, Mumbai. The petitioner-Kunal as a nominee of Shri Ramesh T. Khanchandani group was duty bound to repay to the Appellant-Company the amount paid to it in advance by way of interest against the final profits of the project to enable the Appellant-Company to return the deposits of the prospective flat owners. That the Directors reports from time-to-time had dwelt upon all the problems, obstacles, hurdles, hassles and issues encountered by the Appellant-Company and the petitioner-Kunal was well aware of the same. That the petitioner-Kunal as a nominee of Shri Ramesh T. Khanchandani was fully briefed about the day-to-day developments, matters and issues faced by the Company as the said Shri Ramesh T. Khanchandani was one of the directors of the Company and the Chairman Shri Manohar T. Makhija and Managing Director Shri K.K. Motwani were regularly in touch with him through fax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of interest against future profits and that these issues required thorough investigation. That therefore, the Court could not be required to investigate several complex facts and evidences in depth. That the amount received by the Company from the petitioner-Kunal and other participants were for the purpose of purchase and development of the said plot of land at Worli and the main asset of the Company was the said plot of land that was very much in existence. There were no business losses as such suffered by the Company and therefore, it was not possible to contend that the Company has lost its substratum. Therefore, there was no question of winding up the Company. It was averred that on receipt of notice from the petitioner s Advocate, reference was immediately made to Shri Sunil Mirpuri and Shri Sunil Mirpuri had assured that he would convince the petitioner-Kunal against filing any winding up petition because the management of the Company was strenuously working to save the financial interests of the Company as stated above. During this time the deponent had also to make trips to Delhi in connection with the follow up of the matter lying with the Finance Minister and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliberately suppressed any facts, papers or documents with a view to seeking a quick remedy in an inappropriate forum. It was denied that the forum was inappropriate and if at all there was anybody misleading the court, it was the Company which had put forward a completely false, dishonest, bogus and irrelevant case in order to dishonestly evade its liability and to confuse the Court. It was denied that the petitioner has entered into a business deal as one of the nominees of Shri Ramesh Khanchandani in pursuance of the agreement dated 28-3-1994 or otherwise. That neither the petitioner-Kunal nor the Company was a party to the said agreement dated 28-3-1994 and therefore, said agreement was irrelevant. It was contended that Kunal had lent money to the Company and had nothing to do with the business deal or any agreement entered into between Motwani, Makhija and Khanchandani. It was denied that the Company s relation with the petitioner-Kunal was not that of a borrower and lender. That the documents on record clearly proved beyond doubt that relationship of the Petitioner-Kunal and Company was that of a borrower and lender. It was contended that the agreement dated 28-3-1994 had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all upon the Company to produce all the relevant documents and records regarding the alleged sale. It was contended that the petitioner s claim was in respect of the repayment of the loan together with interest and was not in any manner whatsoever dependent upon or linked to the Company making a profit or repaying the depositors and lenders of other groups as also Mr. Ramesh Khanchandani. It was denied that the petitioner s claim was unjust, complex and triable in nature. It was contended that Kunal was not concerned with the alleged financial difficulties of the Company and that the facts indicated that the Company was unable to pay its debts and should be wound up. It was denied that the amount paid by the Kunal to the Company was agreed contribution simpliciter. The other contentions made on behalf of the Company were also denied and it was stated that the Company had no defences whatsoever. 10. The Company Petition No. 726 of 1998 was heard by the learned Single Judge of this Court for admission on 12-2-1999. The learned Single Judge passed a conditional order directing the Appellant-company to deposit an amount of Rs. 3,91,54,539 within eight weeks from the date of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in spite of repeated requests and demands and though promises were made, the Appellant-Company avoided, failed and neglected to repay the said outstanding amount nor did the Company paid interest at the aforesaid rate payable at the end of every year. That the Company had admitted, confirmed and acknowledged its liability to pay the said amount to the petitioner-Tarachand in its accounts and balance sheets published for the years up to 20-6-1998. The petitioner-Tarachand contended that he was one of the shareholders of the Company and as such he was entitled to receive notice of the annual general meetings as also copies of the annual accounts of the Company every year. He however, did not receive any such notice or a copy of annual accounts for the period from 1-4-1998. Therefore, he was not aware of the present financial position of the Appellant-Company save as what was stated earlier in the petition. That as recorded in the annual accounts and statements of liabilities for the period ended 31-3-1998, it was seen that the Company was heavily indebted to its creditors including unsecured creditors. That the company was not going to develop the said property and in the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Appellant-Company held on 24-1-1994 at which Mr. Shripal Dalal the partner of the Petitioner-Kunal was present. It was averred that it was agreed in the said meeting that the understanding reached between the parties would be reduced to writing and that the agreements in this behalf would be drawn up by the Advocate Mr. D.H. Harish. Accordingly, the agreements were drawn up by the said Advocate. It was also disclosed that a part of the contribution of Khanchandani group and Makhija group were refunded from out of the funds received from the prospective purchasers of the flats. It was also contended that after admission of Company Petition No. 726 of 1998, discussions were held between three groups to seek a way out of the impasse by selling or developing the plot of land at Worli which was the only substantial asset of the Appellant-Company. It was claimed that in or about November, 2004 the Petitioners in the Company petitions indicated that they had a proposal from a party for the purchase of the said plot of land. In this behalf, Mr. Dalal addressed a letter dated 23-11-2004 to Mr. Ramesh Khanchandani setting out the nature of the offer. It appears that an offer of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company is unable to pay its debts and (2) it is just and equitable to wind up the Appellant-company. 15. We propose to take up for consideration the contentions of the learned Counsel appearing for the Appellant that the learned Single Judge was not justified in ordering winding up of the Appellant-company on the ground that it is just and equitable to wind up the Appellant-company. The learned Counsel submitted that the learned Single Judge could not have consi-dered the material which has come on record because of the affidavits filed by both the parties, but should have restricted himself to the averments in the petitions and the material brought on record in support of those averments. The learned Counsel submitted that so far as the averments in the petitions are concerned, an order for winding up of the Appellant-company on the ground that it is just and equitable to wind up the Appellant company is impossible to be made. It was claimed that the Petitioners were the shareholders of the Appellant-company and they have not received notice of the annual general meeting of the company and they have also not received the annual accounts of the company every year and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt is considering a petition seeking an order for winding up of a company on just and equitable ground, the court cannot shut its eye to the material brought before it and exclude that material from consi-deration only because there are no averments in the petition in that regard. No doubt, while taking the material which has come on record into consideration the court will have to see that the company against whom the material is to be used is given an opportunity to submits its point of view in relation to that material. Insofar as the present petition is concerned, the material that has been placed on record and which is relevant for making an order for winding up of the company on just and equitable ground has come from the company itself. There is also no complaint that the company was not given an opportunity to submits its point of view in relation to the material. In our opinion, therefore, the learned Single Judge was perfectly justified in considering the entire material. It is the case of the Appellant-company itself that the company was incorporated in the year 1982, and its authorised share capital was only Rs. 3 lakhs. There is no material on record to show that bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the Appellant-company in Company Petition No. 171 of 2000 and has observed that in that affidavit a statement was made that five persons have advanced money for purchase of the flats. However, the balance sheet of the company shows that 10 persons had advanced amounts for purchase of flats. It is further to be seen here that the learned Single Judge has noted that in the balance sheet a sum of Rs. 6,35,30,972 was shown as advance towards allotment of the flat made by one Mr. Lal M. Daryanani. Mr. Motwani in the affidavit filed in this court admitted that out of the amount of Rs. 6,35,30,972 only a sum of Rs. 1,24,00,000 was the advance received towards allotment of flat. The balance amount of Rs. 5,11,30,972 was brought into the company as Motwani s contribution towards the project. Similarly, the amount of Rs. 1,24,00,000 was shown in the balance sheet as advance paid by Mr. K.K. Motwani towards the allotment of the flat. But it was stated on affidavit that it was actually Mr. K.K. Motwani s contribution towards the project under the agreement dated 28-3-1994. After having gone through the record carefully we find that the learned Single Judge was perfectly justified in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner-Kunal "on your loan amount up to 31-5-1994". It is also not explained as to why in the letter dated 27-3-1996 addressed by the Appellant-company to the Petitioner-Kunal it is stated : " Re : Payment of interest on your loan account with us . This is to inform you that a sum of Rs . 2,25,11,451 was outstanding in our books of account as a credit to your loan account with us as on 1-4-1995." In the same letter it is further stated "The net interest amount of Rs. 36,46,855 has been credited to your loan account and the outstanding loan amount as on 31-3-1996 stands at Rs. 2,61,58,306". The Appellant-company has also not explained as to why in its letter dated 27-3-1996 addressed to the Petitioner-Tarachand it states : " Re: Payment of interest on your loan account with us. This is to inform you that a sum of Rs. 3,47,83,435 was outstanding in our books of account as a credit to your loan account with us as on 1-4-1995." 19. What is further pertinent to be noted is that in the balance sheet of the year ending with 31-3-1997 the names of both the Petitioners are shown under the column "unsecured loans". The same is the position with the balance sheet ending with 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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