9911796707
TMI Blog2014 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... r to allow its FDRs as collateral security and it was said Mr. Khurana who had on his own and without sanction/approval of respondent company / its Board of Directors entered into and executed said transaction by taking disadvantage of the position that he alongwith others (most of them were associate of petitioner / Mr. Khurana) was promoter of said MSK Projects (India) Ltd., i.e. the respondent and was also one of the Directors in the petitioner company. Held that:- In light of the said two letters dated 25.2.2011 and 9.3.2011 by the petitioner company and the respondent company respectively (and from other material / documents which are placed on record by the contesting parties), relevant fact which emerges is that when the petitioner company directly approached / communicated with the respondent company vide its said letter dated 25.2.2011, the respondent company forwarded its reply to the petitioner vide its letter dated 9.3.2011 (wherein the respondent company raised the issue about sanction in respect of the term loan by the company / its Board of Directors). controversy between the parties involve factual disputes, i.e. disputed facts and the said disputed facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2 crores 54 lakhs. The details of said three fixed deposits is as follows:- 6.1 The Petitioner had placed the following Fixed Deposit Receipts (FDRs) with the Corporation Bank (for short the Bank ), Alkapuri Branch, Vadodara. Sr.no. FDR No. Amount Rs. 1. KCC/01/100872 1,02,51,337/- 2. KCC/01/100873 50,07,778/- 3. KCC/01/100871 1,02,27,202/- According to the petitioner's claim, the said fixed deposits were to mature on 16.2.2011. The petitioner has alleged that around that time, the respondent company was in need of funds and had, therefore, approached the Corporation Bank (the Bank where the petitioner had placed the aforesaid two fixed deposits) for Term loan. The Bank required that the respondent company should tender security for the Term loan and therefore, the respondent company requested the petitioner, vide its letter dated 3.8.2010, to give security on its behalf and also requested that the fixed deposits which the petitioner had place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto) informed the Company that it was enjoying CCSDL Limit against the third party deposits and the same has to be released by them. The Company vide its letter dated 3/11/2010 (Copy at Annexure C hereto) informed the Bank not to release the securities unless and until they receive any communication from the Company. The Bank wrote a letter dated 4/11/2010 (Copy at Annexure D hereto) to the Company stating that the Company has informed the Bank that the personal guarantee and collateral security offered by the Company should not be released until it received further communication from the Company. Mr. Ashok Khurana, on behalf of the Petitioner and other associated Company, wrote a letter dated 30/11/2010 (Copy at Annexure E hereto) informing the Bank to release the collateral securities and personal guarantee within 7 days from the date of receipt of the said letter. The said letter was followed by another letter dated 10/12/2010 (Copy at Annexure F hereto) to the Bank requesting to release the excess FDRs and wrote letters dated 20/12/2010 and 02/2/2011 (Copy at Annexure G and H respectively) requesting the Bank to release the collateral securities and personal guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDRs appropriated by the Bank against the Company's loan along with 340% interest. The said amount appropriated by the Bank comes to Rs.2,11,81,113.24. The Petitioner has rightly debited the said amount in the Company's account in the books of the Petitioner. The copy of the statement of account of the Company in the books of the Petitioner is annexed hereto as Annexure O .' 3. The petition is opposed by the respondent company, who has filed affidavit dated 8.8.2012 disputing and denying the allegations by the petitioner. The respondent has claimed and asserted in the said affidavit that the petitioner's claim arise out of Share Purchase Agreement dated 18.3.2010 entered into between Mr. Ashok Khurana and other members of the Khurana family on the one hand and Welspun Infratech Limited on the other hand. The respondent has also claimed that there is no debt as contemplated under the Act which the respondent company is obliged to discharge so far as the petitioner is concerned. The respondent company has also claimed that there are several disputed questions involved in present case which give rise to factual disputes and that therefore, remedy of petition under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to return the said amount of about Rs.2.54 crores with interest at the rate of 30% p.a., however, the respondent company has taken dishonest stand and refused to return the said amount. So as to support his submission that the respondent company had made the above mentioned request to the petitioner with clear intention of not making payment to the bank, learned Senior Counsel for the petitioner relied on the document/letter dated 3.11.2010 [Page-12 of the petition]. 4.2 Mr. Soparkar, learned senior counsel for the petitioner submitted that despite repeated requests, the amounts due and payable from the respondent are not paid and in view of the fact that neither payment is made nor reply is given in response to the statutory notice, it is clear from the facts of the case that the respondent is unable to pay and discharge its dues and therefore, the petitioner is entitled for order of admission of petition. 5. Per contra, Mr. Bhatt, learned senior counsel for the respondent company submitted that the entire claim made by the petitioner is completely unjustified and baseless and the respondent company is not under any obligation to pay any amount to the petitioner and there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly entered into the Promoter SPA dated March 18, 2010 by way of which the Promoters sold their entire shareholding in the Company to Welspun Infratech. (Annexure B1 hereto) Welspun Infratech also entered into the Sellers' SPA dated March 18, 2010 (Annexure B2 hereto) with Ashok Khurana's affiliate companies, including the Petitioner abovenamed by way of which Ashok Khurana's affiliate/group companies, including the Petitioner, sold their entire shareholding in the Company to Welspun Infratech. The entire transaction comprising the sale of shares and transfer of Management and control was completed on or about August 16, 2010 viz. the Share Sale Closing Date. The same has been admitted by the Petitioner's representative Mr. Ashok Khurana in his letter dated February 2, 2011 addressed to Corporation Bank on behalf of his affiliates/associated, including the Petitioner (Annexure H to the captioned Petition). 11.2 However, prior to the completion and closing of the transaction and in prima facie breach of the Promoter SPA and Sellers' SPA, on August 3, 2010 the said Mr. Ashok Khurana appears to have entered into certain transactions with Corporation Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation Bank were unauthorized and unapproved by the Board of the Company and had been entered into by the Petitioner in collusion with its promoter Mr. Ashok Khurana. The Company categorically denied all liability towards the Petitioner in connection with the said FDRs. 11.5 Moreover, the Company, through its advocates' letter dated December 1, 2011 has also responded to the Petitioner's notice of October 24, 2011 and has once again denied the Petitioner's claim (Annexure R to the captioned Petition). In the said letter, the Company has reiterated its stand that the said OD referred to in the captioned notice was an unauthorised facility obtained surreptitiously and fraudulently by the said Mr. Khurana, in collusion with the Petitioner and without the due authority or knowledge of the Board of Directors of the Company. 11.6 In addition to executing the above fradulent and collusive transactions with Corporation Bank in breach of the Promoter SPA and Sellers' SPA, the Petitioner's representative/ promoter Mr. Ashok Khurana has also breached / defaulted in performing his various obligations under the SPA. In order to resolve the disputes arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Welspun Projects Limited (hereinafter referred to as the Company ) was originally incorporated in the month of December 1994 (as MSK Projects (India) Limited) under the Companies Act, 1956 as a Private Company limited by shares. It is now known as Welspun Projects Limited. Therefore, actually the petitioner's claim is against MSK Projects (India) Limited and consequently, against Welspun Projects Limited. According to the petitioning creditor, the respondent company owes certain amounts, as specified in the petition to the petitioner company and the said outstanding dues have not been paid by the respondent company to the petitioner despite repeated requests and demands and even after due and proper service of statutory notice under Sections 433 and 434 of the Act. It is also pertinent to note that the said statutory notice dated 24.10.2011 was also served to the said respondent company, i.e. Welspun Projects Limited. It is alleged and claimed by the petitioner that despite and even after service of the said statutory notice, the respondent company failed and neglected to pay the outstanding dues. 7.1 The request said to have been made to the petitioner compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner to make its FDs available for term loan facility is addressed by the respondent (i.e. MSK Projects (India) Ltd.) and it reads thus: August 3, 2010. To, The Director, M/s. D.A. Finvest Private Limited 1 Vikram Society Gotri Road, Vadodara. Sub: Request for Your fixed deposits to mark lien to avail loan from Corporation Bank. Dear Sir, We request you to offer your deposits about Rs.2.50 Cr to keep as securities to avail CCSDL from Corporation bank, Alkapuri, Vadodara Branch as our Company require urgent working capital funds. The said deposit receipts will be returned to you on or before the due dates of the deposits. In case of any delay or default we agree to pay the entire amount with interest @ 30% from the date of default till we make good of the amount to you. Since we need the Temporary Overdraft urgently we request to hand over the original deposit receipts duly discharged along with your Board resolution. Thanking you, Yours faithfully, For MSK PROJECTS (INDIA) LTD. 8.1 The relevant part of the communication dated 3.8.2010 on which learned Senior Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -390 007 Kind Attn: Shri Manjunath Dear Sir, Re: Request for various concessions. We thank you very much for considering our various requests against working capital facilities. You have also agreed to waive Collateral Security given by Director of MSK Projects (India) Ltd. We further like to inform you that Personal Guarantee and Collateral Security offered by Director of MSK Projects (India) Ltd is not to be released till you receive communication from us. Thereafter, on the next day, i.e. 4.11.2010, the said bank addressed a letter to the Director of said M/s. MSK Projects (India) Ltd., i.e. to the Director of the respondent company. The said letter dated 4.11.2010 reads thus: Mr. Ashok Khurana, Director, MSK Projects (India) Limited, Vadodara. Sir, Subject: Various Deposits in the name of Group Companies held as lien to CCSDL of MSK Projects (India) Limited and Release of Collateral Securities and Personal Guarantee. With reference to the above, we wish to inform you that the Company has informed that personal Guarantee and Collateral Securities offered by you, should not be released until we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects Limited (Formerly known as MSK Projects (India) Limited) We are in receipt of your two letters dated 20.12.2010 submitted by you, for self and on behalf of your associates. In this regard, we would like to inform you that we have already taken up the issues with the captioned Company for early resolution. It is pertinent that in the said letter also, the bank has made reference of two letters, both dated 20.12.2010 written by said Mr. Khurana on his behalf and on behalf of associates which include the respondent company. Another letter which also, in light of above-mentioned facts, appear to be relevant is the letter dated 12.2.2011 (Annexure-G, page 30) which is addressed by the said bank to said Mr. Khurana. In the said letter, Mr. Khurana is described/addressed as authorized person on behalf of the above-mentioned different companies which are said to be associate companies of the petitioner. The said letter dated 12.2.2011 reads thus: Mr. Ashok Khurana, D A Finvest Private Limited, Aaheli Construction Private Limited, Classic Inns Private Limited, WAA Solar Private Limited Vadodara. Dear Sir, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, the said transaction was unauthorised. In light of such allegations, the said facts gain relevance and importance. Another important aspect which emerges in light of the reply by the respondent company is the fact that the entire transaction (which, according to the petitioner company, started in pursuance of letter dated 3.8.2010 by the respondent company) was initiated after the share purchase agreement (between the said third company viz. Welspun Infratech Ltd.) dated 18.3.2010 was executed. It is pertinent that said Mr. Khurana and other associates are party to the said share purchase agreement dated 18.3.2010 as promoters of M/s. MSK Projects (India) Ltd., i.e. the respondent and after having executed the said agreement dated 18.3.2010, the transaction of availing the disputed term loan against collateral security of fixed deposit extended by the petitioner company, was executed. One of the questions which, therefore, arises is that after execution of said share purchase agreement dated 18.3.2010 why would said M/s. MSK Projects (India) Ltd. - wherein said Mr. Khurana is one of the promoters approach the petitioner company - wherein also said Mr. Khurana is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed fit and proper: (a) Civil proceedings for recovery of the amount along with interest @ 30% p.a. (b) Winding-up proceedings as against you. (c) Criminal proceedings as against you. (d) Attachment proceedings for attachment of your movable and immovable properties. We hope you will repay us immediately but earlier than 15 days as requested above. 8.5 In reply to the said letter dated 25.2.2011, the respondent company addressed a letter dated 9.3.2011 [Page- 39 of the petition] stating, inter alia, that: It seems that you have acted on instruction on Mr. Ashok Khurana, then Chairman of the Company. Please note that Mr. Ashok Khurana, was never authorized by the Board of Director (the Board) of the Company to act in this regard. Further you were never requested by the Board of the Company to provide security in favour of the Bank, in connection with the loan availed by the Company. You as a prudent person while extending security in favour of the Bank, should have confirmed whether Mr. Khurana, then Chairman of the Company has obtained necessary approval of the Board of the Company for availing loan from the Bank. Mr. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee as well as CCSDL) belonging to me, my family members, relatives and associates given by me were to be forthwith released. A binding contract being arrived at your bank was bound to release all the Personal Guarantees and Collateral Securities. You bank confirmed to us that it would be releasing all the personal Guarantees, Collateral Securities and Deposits vide its letter dated 03/11/2010. If the Company gives instructions to the contrary and/or causes delay in completing the pending formalities, we are not concerned with it; and our interests should not be prejudicially affected thereby. Further, as per clause 7.9 of the Share Purchase Agreement (True copy of the clause enclosed) entered between Promoters and Welspun Infratech Ltd. The purchaser i.e. Welspun Infratech ltd. has agreed to release the personal guarantees issued by the Promoters within 3 (three) months of the Share Sale Closing Date i.e. 16/08/2010. Hence, the purchaser has to release all the guarantees, securities given by the Promoters before 15/11/2010. Hence, under this clause also we are entitled for getting our securities back. In addition to above clause, there is a clause in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that: 11.3 The collusive and fraudulent nature of the transaction is further apparent from the fact that all of the events i.e. obtaining of the OD from Corporation Bank (Annexed hereto and marked as Annexure D is a copy of the On Demand Promissory Note issued to Corporation Bank), making of the request by the Company to the Petitioner for keeping the Petitioner's FDRs as security for the said OD (Annexure A to the captioned Petition) and the Petitioner's response purporting to offer to the Company the FDRs as security for the said OD (Annexure AA to the captioned Petition), were all issued on the same day, i.e. August 3, 2010, even though Petitioner and the Company are situated in different cities. This discrepancy in dates clearly indicates that the transaction involving the Petitioner's FDRs was an afterthought and had been executed by Mr. Ashok Khurana and the Petitioner in collusion with each other. Moreover, it is submitted that these transactions were never approved by the Board of Directors of the Company and therefore cannot and do not bind the Company in any manner. 8.8 The aspects which are mentioned and discussed hereinabove, particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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