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TMI Blog2014 (4) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... olymers Pvt Ltd) is the same - Respondent's reply, dated 27th March 2001, shows only one address: 52, Mamta “A”, New Prabhadevi Road, Mumbai 400 025. This is the very address to which the statutory notice was sent. Whether transaction is hit by the Bombay Money-Lenders’ Act 1946 and the agreement is not a hire-purchase agreement but a loan, thus making the petition not maintainable - Held that:- Under the present hire-purchase agreement, Tata Motors is the owner of the Mercedes Benz. Sundeep Polymers is the hirer. On Sundeep Polymers paying all the agreed instalments to Tata Motors, it had the option of taking the car as its property. Till that time, the car remained the property of the Tata Motors. This is no moneylending transaction. It is an agreement of hire-purchase, a bailment of the car with a provision for sale added. Bar of limitation - Held that:- The hire-purchase agreement is dated 14th July 1998. The petition was filed on 20th June 2001. Even if the date of the agreement is reckoned as the starting point of limitation (which it cannot), the petition is in time. Sundeep Polymers was in default of payment of instalments between 14th August 2000 and 14th February 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Dileep Nevatia, a director of Sundeep Polymers, appears in person. He has, on behalf of the Sundeep Polymers, also filed Company Application No. 119 of 2014 for dismissal of the petition. He has raised four principal defences to the petition: (a) First, that Tata Motors advocates statutory notice was not sent to the registered office address of the company, Sundeep Polymers Pvt Ltd; (b) Second, that the transaction is hit by the Bombay Money-Lenders Act 1946 and the agreement is not a hire-purchase agreement but a loan, thus making the petition not maintainable; (c) Third, that Tata Motors claim is time-barred. (d) Fourth, that the petitioner has obtained an arbitral award and cannot, for that reason, maintain this petition. 4. The petition is brought under Section 433(e) and Section 434(1)(a) of the Companies Act, 1956. These require the service of a notice at the company s registered office address. Mr. Nevatia says that the registered office of Sundeep Polymers is not at 52, Mamta A , New Prabhadevi Road, Mumbai 400 025, but at Udyog Bhavan, 250-D, Worli, Mumbai 400 025. Exhibit B to Mr. Nevatia s affidavit in support of the Company Application is a prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent. 8. There is, therefore, no substance at all to the first defence. 9. The second ground is also soon despatched. Mr. Nevatia insists that Tata Motors is a money-lender within the meaning of the Bombay Money-Lenders Act, 1947. Therefore, this petition is not maintainable. Mr. Nevatia insists that at the time what Sundeep Polymers obtained from Tata Motors (then Tata Finance Ltd) was a loan within the meaning of the Bombay Money-Lenders Act. Tata Motors did not have a money-lending license under that Act. Therefore, it cannot recover the amount of the loan. He points to certain portions of Tata Motors affidavit where the word loan is used. 10. Mr. Nevatia relies on the decision of a learned single Judge of this Court in Rushabh Precision Bearings v Marine Container Services. [2001] 106 Comp Cas 108 (Bom), per Rebello, J., as he was then That decision held that, to maintain a petition under Section 434(1) (a), the debt claimed must be legally recoverable. If recovery is barred under Section 10 of the Bombay Money-Lenders Act, the petition would not be maintainable. 11. Section 2(9) of the Bombay Money-Lenders Act defines a loan. It contains several exclusions, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an end and the vehicle shall at the option of the hirer, become his absolute property; but until such payments are made, the vehicle shall remain the property of the owner. The hirer is also given the option of purchasing the vehicle at any time during the currency of the agreement by paying in one lump sum the balance of all the hire charges and all other sums under the said agreement. Under Clause 7 of the said agreement the hirer is at liberty to terminate the hiring at any time during the continuance of the said agreement by returning the vehicle to the owner at Bombay as set out in that clause. Under Clause 9, subclause (h), of the said agreement the hirer is required to declare to the Registering Authority that the vehicle is in his possession under this agreement and to have necessary endorsement to that effect made by the said authority. The agreement is clearly an agreement of hirepurchase. It is an agreement of bailment of the said vehicle with a provision for its sale to the petitioner as provided in the said agreement. It cannot be considered as an agreement of money lending covered by the Bombay Money Lenders Act, 1946. There is, therefore, no substance in the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 673 (Bom) Section 36 of the Arbitration Conciliation Act, 1996 makes it clear that an arbitral award can be enforced as a decree under the Code of Civil Procedure, 1908. 17. But Mr. Nevatia has a final string to his bow. The Mercedes Benz, he says, was defective. It lay in the garage and did not function as it ought. Therefore, in his submission, his company should not be asked to pay the hire-purchase instalments. It is hard to conceive of a more porous defence than this. It is entirely defeated by Clause 11 of Part I of the Hire-Purchase Agreement, one that is worth reproducing in its entirety: 11. The Hirer acknowledges and agrees with the Owners that: a) the vehicle is of the size design capacity and manufacture selected by the hirer; b) the Owners are not manufacturers or suppliers of the vehicle nor a dealer in such vehicle; the Hirer has inspected and selected the vehicle; the Hirer has signed this agreement relying entirely on the Hirer s own judgment and not on any statements made by the Owners or the agents or servants of the Owners; c) the vehicle is accepted by the Hirer in the condition it is (with all faults and defects, if any) and delivery shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding admission for an extraordinary period of some 13 years. How this has come to pass is unclear, but I can only attribute this to Mr. Nevatia s forensic skills. Unfortunately, considerable though they are, they cannot rescue a matter so utterly beyond redemption. It is only because Mr. Nevatia has assumed the burden of defending his company, and discharged that most creditably, arguing with commendable restraint and clarity, that I am inclined to give him and Sundeep Polymers a final opportunity to make payment. It is for this reason, too, that I decline to appoint a Provisional Liquidator, grant an injunction or award costs. 20. As a result: (a) The Company, Sundeep Polymers Private limited, shall pay to the petitioners, Tata Motors Ltd, the sum of Rs. 16,14,515/- on or before 16th June 2014. On that payment being made, this Company Petition shall stand disposed of with no order as to costs. (b) Should the Company default in making that payment, then (i) this petition shall stand admitted without further reference to the court, and shall be made returnable on 16th July 2014. (ii) Service of the petition on the company under Rule 28 of the Companies (Court) Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
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