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TMI Blog2008 (9) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... e association master agreement dated October 18, 2007, together with its schedule collectively referred to as "ISDA Agreement". Apparently, the company entered into the aforesaid agreement with the petitioner with a view to protect itself from the losses arising out of adverse fluctuations in the rate of exchange in import export transactions. Broadly, the salient features of the two agreements are as follows : The company would enter into derivative transactions. If as a result it makes any gains, the petitioner-bank would credit the amount to their account. If there are losses, the petitioner would debit their account. The derivative limits were to be Rs. 15.2 million. The agreements would cover both forward and options contract. The com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of Rs. 46,00,000 to the petitioner. 4. Apparently, on November 23, 2007, the petitioner credited the company's account with an amount of Rs. 14,18,760. On December 12, 2007, the cheque issued by the company for Rs. 1.52 crores was dishonoured. The bank terminated the contract by letter dated December 27, 2007. On December 18, 2007, the petitioner issued the statutory notice which was replied to on December 31, 2007, inter alia, contending that the transactions referred to in the statutory notice are already the subject-matter of High Court Suit No. 3398 of 2007 filed on December 10, 2007 and claiming that the company was fully capable of honouring the cheque, but the amount has been withheld because the petitioner deposited the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is itself without any authority and cannot bind the company. 6. On a consideration of the entire matter, it appears that the defence of the company is not bona fide. There is no dispute that the resolution to enter into these derivative transactions and execute agreements with the petitioner-bank was passed by the company. The agreements are signed by the authorised officer of the company, i.e., Mr. Jasmin Mehta. The company paid Rs. 46,00,000 to the petitioner on account of differential margin money demanded by the petitioner. They also issued a cheque for Rs. 1.52 crores towards CAL which was dishonored on their instructions. Prima facie, therefore, the defence that the agreements in question are void and the two transactions under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up vide Viral Filaments Ltd. v. Indusind Bank Ltd. [2001] 4 Comp. LJ 44 ; [2003] 113 Comp Cas 85 (Bom), paragraphs 6 and 7. 9. Mr. Hakani relied on several decisions of various High Courts, including this court, in support of his contention that the company petition ought not to be entertained because there is a bona fide dispute. All those decisions have not been dealt with here since there is no dispute about the proposition that where the debt is bona fide disputed, the court will not entertain a petition for winding up. It is equally well-settled that whether the dispute is bona fide or not would have to be decided on the facts of each case by the court. 10. In this view of the matter, the respondent-company is directed to deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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