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TMI Blog2014 (6) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent : B.C. Thiruvengadam. ORDER:- The petitioner is said to be a global bank-registered under the Companies Ordinance of the Hongkong Special Administrative Region. It is said to be functioning in India as a banking company, as defined under the Banking Regulation Act, 1949 (Hereinafter referred to as the 'BR Act', for brevity), having their principal place of business at Mumbai. 2. The respondent is a company registered under the Companies Act, 1956 (Hereinafter referred to as the Act , for brevity) having its registered office at Bangalore. The respondent is said to be engaged in the manufacture of garments. It is said that several reputed companies in India and abroad, are said to be availing the manufacturing facility of the respondent. It is stated that the petitioner, apart from providing banking services, also renders Factoring Services - namely, an internationally accepted financing solution that allows a client to convert its accounts receivables - to cash, thereby enabling the client to raise instant cash against its invoices. It is said that the provision of factoring services is enabled by the Central government and the Master Guidelines is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent - company, at 85% of the invoice value for an aggregate sum of Rs.5 crore. The factoring charges, termed as interest, at the rate of 11% was to be set off against the 15% margin of the invoice value. In addition to it, the entire invoice value would be covered by insurance, for which the respondent was to pay the petitioner 0.14% of the gross invoice value. It is claimed that the respondent was led to believe that in the event of any of the customers whose invoice, had been bought by the petitioner, failed or delayed in making payment, the petitioner could recover the invoice value from the insurer, in this regard the petitioner had collected a premium under the heading Service -Charges . It is contended that the factoring facility was not a loan, but a transaction of assignment of debt, which the petitioner had purchased. And that there was a credit cover in the event of a default by the debtor, namely the insurance cover for which premium had been collected by the petitioner at the rate of 0.14%. It is asserted that in terms of clause 9 of the Factoring Agreement, the petitioner had a right to recourse in respect of any unappropriated debt following non-payment of its de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multaneously from its customers, which was fraudulent. It is stated that the petitioner, who had made a demand for payment of a sum of Rs.8,02,08,272/-, a sum of Rs.3.06 Crore is said to have been paid out of sheer desperation and buckling to the extra legal methods adopted by the petitioner, of which Rs.1.55 Crore is said to have been paid by Arvind Brands, Rs.37 lakh by Hasbro and the further amount of Rs 1.14 Crore by the respondent which it was not legally obligated to pay, according to the respondent. It is thus claimed that it was in the above background that the respondent had filed the aforesaid civil suit negating the above transaction. That had ultimately resulted in the apex court disposing of the Special leave Petitions - challenging the judgments passed in appeals by this court, against the injunctory orders issued against the petitioner, with an observation that the pending suit be decided on merits. However, it is pointed out that the apex court had appreciated the fact that the transaction in question was with respect to purchase and repurchase of debts in the following terms : ORDER Mr. Sundaram, learned senior counsel appearing on behalf of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question pursuant to Condition 4. The amount payable by the client to the bank in accordance with Condition 9.01(d) shall be the purchase price of the debt in question. The client shall pay all such amounts on receipt of demand for payment from the bank. 9.03 All debt and associated rights the subject of Recourse shall remain vested in the bank until the repurchase price of all such debts has been paid; any amount received by the bank in relation to a debt after payment of such repurchase price shall be paid to the Client. It is hence contended that the petitioner was primarily obligated to recover the money from the customers of the respondent - company, without seeking any instructions on the manner in which it should be recovered and allocated from the respondent - company. Moreover, the petitioner had a right to seek recourse from the respondent - company on fulfilling three conditions. (a) That the amount factored would have to exceed the sanctioned limit of Rs.100 million and that after the customers of the respondent - company becoming insolvent and unable to pay the amount to the petitioner, and (b) The amount to be claimed from the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking by them before this court not to precipitate the matter. It is further contended that without even issuing the required notice under Section 138 of the Negotiable Instruments Act, 1881, the petitioner filed a complaint under section 138 of the Negotiable Instruments Act, 1881 before the Magistrate, which came to be dismissed by order dated 23.6.2012. 4. In the above facts and circumstances, it is evident that the respondent has seriously disputed its liability, only with reference to any undertaking to pay a certain amount of money, in the face of other attendant circumstances and the negation of the very basis for any such liability in the first instance being in the nature of a debt. It is well settled that a creditor may seek the assistance of the company court under dection 433 of the Act, to compel payment of monies due to him. But, where a debt is bona fide disputed and where the claim appears to the court as not just, it is open to the court to refuse the request for a winding up order and to leave the parties to their remedies, to have their claims adjudicated before the appropriate forum. It is not for the court hearing a petition for winding up und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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