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TMI Blog2014 (2) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... and the various affidavits filed. Having carefully considered the material and the rival arguments, I am not persuaded that this is a fit case for admission of this winding up petition against the Company. In my view the Company has a substantial and bona fide defence, not one that can be said to be illusory and spurious. Indeed, it is the petition itself that I find to be lacking in bona fides. 3. Mr. Khata's submission is simplicity itself. In August 2008, the Company wanted to purchase gold jewellery from the petitioner. As the volumes being considered were large, the petitioner asked for an advance. The respondent agreed. It made advance payments of Rs.11.5 Crores on different dates. Following this, the petitioner supplied gold jewellery of the value of Rs.48,48,33,643/- to the Company. It raised three invoices dated 5th November 2008, 6th November 2008 and 11th November 2008. The petitioner claims that the Company accepted the deliveries of gold jewellery. There was no dispute about the quality, quantity, weight, rate or demurrage of these jewellery supplies. The invoices required the Company to make payment to the petitioner within 120 days from the date of delivery. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese goods was the responsibility of the Company. As a result, the Company paid all shipping expenses, including insurance. All shipping documents stood in the name of the Company "on account of MSTC". However, export invoices and bills of exchange were in MSTC's name. MSTC directly negotiated these documents with the foreign buyers' banks. MSTC did business in a similar manner with other entities as well, six in all. All these entities were described as "associates" of MSTC. Two of these entities were owned or controlled by Jayesh Desai, the petitioner's director. One of them is the petitioner itself. Another is named Bond Gems Private Limited. There are today arbitration pending between MSTC and these associates. 7. A very curious circumstance stated by the Company in paragraph 10 of its affidavit in reply and explicitly accepted by Jayesh Desai in the affidavit in rejoinder is that Jayesh Desai was shown as the consignee of all the material exported from India by MSTC to UAE and Kuwait. This was done through the name of one RKM General Trading FZE. This is an entity also controlled by Jayesh Desai. Goods worth about Rs.500 Crores were routed in this manner by MSTC through RKM G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the petitioner from the Company's Cosmos Bank account to the Company's account with the Pen Bank. The Company claims that it was asked by the petitioners not to actually transfer the amount to the Company's own account (with the Pen Bank), but to leave it with the Pen Bank; i.e., presumably in a suspense account. The reason the Company was asked to do this, it claims, was to assist one Shishir Dharkar and the Pen Bank to tide over some temporary monetary difficulties. Believing that it was in no way prejudiced by this, the Company did not officially ask the Pen Bank to transfer this amount to the Company's own Bank account. In the meantime, investigations by the CBI showed that there was collusion between Jayesh Desai, Shishir Dharkar, one Prem Kumar Sharma of Pen Bank and some officials of MSTC. The amount of Rs.29.87 Crores was thus moved from the Company's Cosmos Bank and was utilised by the Pen Bank. CBI enquiries showed also that the petitioner had substantially recovered the sale proceeds of the jewellery exported by MSTC as Jayesh Desai was the consignee of those exports. 12. There are as many as five separate proceedings between some or all of the various entities inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of another company he controlled, RKM General Trading FZE. In other words, the goods sold by the petitioner - of which Jayesh Desai is a director - ultimately found themselves in the hands of RKM General Trading, an entity that is also, on his own admission, controlled by Jayesh Desai. In other cases, the petitioner itself, and its sister concern, Bond Gems Pvt. Ltd., were directly involved in the routing of gold jewellery through MSTC to Jayesh Desai at RKM General Trading. The total value of the petitioners' invoices is about Rs.48 crores. Of this, part payment has been made of Rs.17.70 crores. The remaining amount, or a substantial part of it, Rs.29.87 crores was diverted to the Pen Bank, and here again there is the involvement of Jayesh Desai, officers of MSTC and of the Pen Bank. The transfer of Rs.29.87 crores was made on 6th December 2008 at the instance of the petitioner. The petitioner is credited with the payment of this amount in the Company's books. On these facts, it is impossible to hold that the Company is indebted to the petitioner in an undisputed amount, or that it has withheld payment without just or sufficient cause. The Company's defence is not illusory. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiries and investigations being carried out in parallel elsewhere. The fact that a summary enquiry does not permit a microscopic scrutiny does not mean that it requires no scrutiny at all. It requires an overall assessment of all factors. It cannot be in the kind of blinkered, isolated fashion that Mr. Khata seems to suggest. At its simplest, Mr. Sethna's case is this: the jewellery his clients bought from the petitioner seems to have been diverted. It - or, at any rate, its value - seems to have found its way by means circuitous, clandestine and suspicious, though not known with certainty, into the hands of the petitioners' director, Jayesh Desai, and possibly the petitioner itself. A very substantial amount of the Company's funds seem also to have been diverted, and again at the instance of the petitioner, to another entity (the Pen Bank), with which the petitioner/Jayesh Desai had dealings. The amount so diverted corresponds too exactly with the petitioners' present claim to be mere coincidence or sheer happenstance. Criminal investigations have been launched. Viewed from any perspective, it is not, I think, possible to consign this formulation of the defence to oblivion as Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Anr., Company Petition No.322 of 2012 (Delhi High Court), decided on 13th September 2013, MANU/DE/3182/2013; Reliance Infocomm Ltd & Anr. v Sheetal Refineries P. Ltd., [2008] 142 Com Cas (AP) 20. I do not believe that the petitioner can be said to have established the Company's liability to it in the amount claimed. The suppressions in the petition are many, and they are critical. It is only in the rejoinder that some sort of an explanation is offered. To my mind, there are two determinative factors. The first is the petitioner's acceptance of the Company's averment that Jayesh Desai or an entity he substantially controls was MSTC's consignee and that this resulted in a circular routing of money and goods. The second aspect is the Company's case regarding the transmission of funds to the Pen Bank. In the further affidavit dated 29th July 2013, the Company has set in copious details how these transactions were effected. Again, there is no cogent answer from the petitioner. Then there is a matter of the petitioner's extraordinary delay in making its claim, despite its contention that its invoices were payable no later than within 120 days. Finally, there is a matter of the enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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