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TMI Blog2014 (6) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the respondent, the interest, if any, could only run from the 24.05.2012 i.e. the date of the order and not prior to the said date. In my view, this contention is wholly erroneous. The respondent had approached IDBI and had offered a sum of Rs.225 lacs as full and final settlement of its dues. This offer was considered by a Committee of IDBI in its meeting held on 21.03.2006 and the same was not accepted. Although, there was no binding agreement between the respondent and IDBI, the respondent had been contending that it was only liable to pay Rs.250 lacs as had been approved by the committee members. Thus, according to the respondent own showing, the respondent would be liable for interest on the said amount from 27.03.2006 i.e. the date of approval of the counter offer by the concerned committee of IDBI. The respondent cannot on one hand insist that it settle its dues on the terms as considered by IDBI on 21.03.2006/27.03.2006 and on the other hand plead that interest should run from 24.05.2012. Respondent could be called upon to pay a reasonable interest on the sum of Rs.250 lacs provided the petitioner was willing to accept the same as full and final settlement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent company, on account of financial facilities granted by Industrial Development Bank of India (hereinafter referred to as IDBI ) to the respondent company. The amount receivable by IDBI from the respondent company was assigned to Kotak Mahindra Bank Ltd. (KMBL) which in turn assigned the same to the petitioner herein. The petitioner company has also prayed that it is just and equitable to order winding up of the respondent company as the respondent company had failed to commence its business operation within a period of one year from the date of its incorporation. 2. Briefly stated, the relevant facts areas follows:- 2.1 IDBI and the respondent company entered into a Rupee Term Loan Agreement dated 07.10.1996. In terms of the said agreement IDBI sanctioned a loan for a sum of Rs.367 lakhs and in pursuance thereof, disbursed an amount of Rs.329 lakhs from time to time. Further, IDBI and the respondent company also entered into a Foreign Currency Loan Agreement dated 06.11.1996 whereby a foreign currency loan of DM 779105 equivalent to Rs.183 lakhs was sanctioned and a sum of DM 4,92,557 equivalent to Rs.124.81 lakhs was disbursed by IDBI. 2.2 The respondent compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the DRAT stayed the proceedings pending before the DRT. Aggrieved by the same, KMBL filed writ petition (W.P.(C) No.3535/2007) before this court and by an order dated 23.05.2007, the DRAT order was set aside and parties were directed to appear before the DRT, which was directed to examine afresh the defence of the respondent company. The respondent company had also filed a writ petition (W.P.(C) No.5258/2008) before this Court challenging the assignment of debt to KMBL, however, the same was withdrawn by the respondent company on 24.02.2009. 2.6 In the meantime, KMBL assigned the said debt in favor of the petitioner herein by an assignment deed dated 16.04.2008. The respondent company filed a writ petition (W.P.(C) No.6557/2008) before this court seeking an order restraining IDBI from assigning the debt to any third party and a direction to IDBI to accept the OTS. Further, the respondent company also sought quashing of the assignment of debt by IDBI to KMBL. The said writ petition was dismissed by this court by an order dated 02.02.2011. The said order dated 02.02.2011 was challenged by the respondent company before a Division Bench of this Court in a Letters Patent Appeal (LP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to its rights and contentions. 3. The learned counsel for the petitioner submitted that the petitioner, being an assignee of the debt by the KMBL, has stepped into the shoes of the assignor/KMBL and therefore, the debt is due and payable by the respondent company to the petitioner. It is submitted by the petitioner that the respondent company has failed and neglected to pay the amount due and admitted by the respondent in its balance sheets for the years 1998-99, 2001-02, 2002-03 and 2004-05 filed with the Registrar of Companies. It was further contended that in view of the failure of the respondent company to respond to the notice under section 434(1)(a) of the Act, it ought to be presumed that the respondent is unable to pay its debts. 4. The learned counsel for the petitioner has contended that the respondent company is also liable to be wound up as the company had failed to commence its business within one year from the date of its incorporation. It is submitted that the respondent company was incorporated with the objective of setting up of a 100% export oriented unit with an installed capacity of 1920 TPA for processing various spices. However, the respondent did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not made out by the petitioner in its pleadings and only a bare statement had been made that the respondent had not commenced business. He submitted that there was no reference to Section 433(c) in the pleadings. He also pointed out that the notice issued by this Court was confined to a claim of Rs.250 lacs and, therefore, the petition ought to be confined to Section 433(e) of the Act. He submitted that since the respondent had deposited the amount of Rs.250 lacs in Court, which was the debt as admittedly payable, the petition was liable to be dismissed. 9. I have heard the learned counsel for the parties. 10. The controversy to be addressed in the present case is whether the respondent company is liable to be wound up on account of its inability to pay its debts. It is also necessary to consider whether the petitioner has made out a case for winding up of the respondent company under Section 433(c) or Section 433(f) of the Act and whether, in the given facts, this court should exercise its discretion to wind up the company under those provisions. 11. At the outset, I must note that the notice of this petition was issued, on 24.05.2012, as the petitioner had confined its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent and it is only during the present proceedings that the respondent had indicated that it was willing to settle the disputes for a sum of Rs.250 lacs. In these circumstances, according to the respondent, the interest, if any, could only run from the 24.05.2012 i.e. the date of the order and not prior to the said date. In my view, this contention is wholly erroneous. The respondent had approached IDBI and had offered a sum of Rs.225 lacs as full and final settlement of its dues. This offer was considered by a Committee of IDBI in its meeting held on 21.03.2006 and the same was not accepted. The Committee decided that a counter offer of Rs.250 lacs should be made. The entire sum was to be discharged latest by 30.06.2006. According to the respondent, this counter offer was never communicated to the respondent. However, it was the case of the respondent in the writ petition (W.P.(C) 6557/2008) that the respondent was only liable to pay the amount, which IDBI had decided to accept and accordingly the respondent had prayed for an order directing IDBI to accept the OTS amounting as approved by IDBI on 27.03.2006. It is apparent from the facts that there was no concluded agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent to pay compound interest which is disputed by the respondent indicates its inability to pay its debts. It is well settled that the legal fiction of section 434(1)(a) would be applicable only in cases where a company accepts that a debt is due and payable. In the present circumstances where the debt claimed by the petitioner is being stoutly disputed, the omission to pay the same cannot lead to a conclusion that the respondent is unable to pay its debts and, resultantly, should be wound up. 15. The next question to be addressed is whether the respondent company is liable to be wound up under Section 433(c) or 433(f) of the Act. Although, the pleadings filed by the petitioner does mention that the respondent has not commenced its business, the focus of the petition is not that the respondent is liable to be wound up on account of noncommencement/ suspension of business. The petitioner had confined the petition only to a claim of debt, at the time of issuance of notice. This by itself would be reason enough for not permitting the petitioner to urge that the respondent has lost its substratum and should be wound up on account of its failure to commence business. Having stated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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