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TMI Blog2015 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... herein is as to whether the defense raised by the respondent to the effect that the corporate guarantee claimed not being genuine is substantial which would require adjudication in an appropriate proceedings. To consider this aspect, the reference in that regard is made to the material relied on in the lead case as the consideration is similar in the other cases. In the instant case, in any event the parties are already before the appropriate forum raising the same issues and the adjudication therein will settle these issues, which if held against the respondent company and at that stage if it is shown that they are unable to repay their debts, certainly the petition can be entertained at that stage, but as of now, the substantial issues raised will weigh in favour of the respondent to secure adjudication of the same in the forum where it is pending and that aspect cannot be decided at this stage based on the averments made in the petition and the objection statement. - Petition disposed of. - CO. PETITION NOS. 159, 211 & 212 OF 2009 - - - Dated:- 1-9-2014 - A.S. BOPANNA, J. For The Appellant : Uday Holla, Sr. Counsel and C.K. Nandakumar For The Respondent : G. Kris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de. The details of the cheques issued by the Borrower company and the same being dishonored for want of funds is stated in the petition. The petitioner therefore addressed a letter through their Advocate dated 26.02.2009 to the Borrower company, Sri. Balakrishna Rao and the respondents herein who are stated to be the corporate guarantors to pay the outstanding amount of ₹ 5,59,17,189/- which was due as on that day with interest at 12.5% p.a. The petitioner in order to protect its other right also filed Arbitration Petition (L) No.310/2009 in the High Court of Mumbai under Sec.9 of the Arbitration and Conciliation Act for appointment of Court Receiver. The Borrower company thereafter sought to have requested for rescheduling the repayment by its letter dated 31.03.2009. Thereafter the minutes of understanding is stated to have been drawn and was filed in the proceedings wherein it was agreed by the Borrower company, Sri. Rao and the respondents not to create charge. It was also agreed that the value of the property after sale is to be deposited with the petitioner to be kept in the escrow account. In the said process a sum of ₹ 34,35,234/- was recovered. Further the pled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the respondents herein is the contention. The entire case of the respondents is that the assurance if any given by the said Sri. Ramachandra Rao, the same is without authority and would not bind the respondents. It is contended that on these aspects it is already being contended before the High Court of Mumbai and in arbitration proceedings. With regard to the sale of shares and appropriation of the amount to the account of the borrower is also contended to be illegal. Since there is dispute with regard to the validity of the documents relied upon, this Court cannot consider the same in a company petition as the arbitration proceedings are pending in that regard. The alleged debt is not ascertained debt and the necessary parties are also not impleaded and as such the petition is not maintainable. It is stated that the notice was received on 12.11.2009, by which time the instant petition was already filed and also the stand of the respondents was already disclosed in the Arbitration case and as such non issue of reply to the notice is not material. The further case of the respondents is that they are profit making companies and Sri. Ramachandra Rao who was the CEO had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O.S.No.2963/2011 said to have been filed by the respondent for declaration and injunction. 9. In the light of the rival pleadings I have heard Sri. Udaya Holla, learned Senior Counsel on behalf of Sri. C.K. Nandakumar learned Counsel for petitioner and Sri. G. Krishnamurthy, learned Senior Counsel on behalf of Sri.Purushotham, learned Counsel for the respondents at the stage of admission and perused the petition papers. 10. At the outset, it would be appropriate to notice the decisions relied upon by the learned Senior Counsel for the parties. On behalf of the petitioner, the following decisions are relied: (i) The case of L T Finance Ltd. v. International Hometex Ltd. 2010 (1) BomCR 196 wherein it is held that a statutory fiction is created when a notice under Sec. 434 of Companies Act and the company fails to pay the amount. Hence even if a arbitration proceeding has been initiated for recovery of the amount, the same will not foreclose institution of winding up petition. On facts therein it was noticed that apart from there being no reply to the statutory notice, the respondent company therein, in their reply statement in the proceeding under Sec.9 of Arbitration Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystems (P.) Ltd. v. Proxima Medical System G.M.B.H (AIR 2005 SC 4175) is relied to the extent wherein it is held that the debt under Sec. 433 of the Companies Act must be a determined or a definite sum of money payable immediately or at a future date. (v) The case of SICAL-CWT Distriparks Ltd. v. Besser Concrete Systems Ltd. (2003 Comp. Cases Vol.113 383- Mad.) wherein it is held that since the respondent company was questioning the agreement and its genuineness and raised bonafide grounds leading to suspicious circumstance surrounding the execution of the agreement, it was not open to the petitioner to claim on the basis of the authority of the company. The question whether the agreement was valid or not would depend upon facts. If the respondent was the guarantor, on the failure of the principal debtor to repay, the guarantor would be liable to repay, but when the very existence of the guarantee agreement was disputed, the petitioner should establish the agreement in question in a civil Court as a genuine one. If the substantial defense is established, the fact that it was raised for the first time in the preliminary counter affidavit will not make any difference. The winding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Borrower company has not disputed the liability. Be that as it may, the legal position that the creditor can choose to proceed against the guarantor on establishing the debt cannot be in doubt. Therefore, the question herein is as to whether the defense raised by the respondent to the effect that the corporate guarantee claimed not being genuine is substantial which would require adjudication in an appropriate proceedings. To consider this aspect, the reference in that regard is made to the material relied on in the lead case as the consideration is similar in the other cases. 14. To the extent of the transaction of the Borrower the document dated 03.11.2008 (Annexure-B) is relied. To contend that the respondent companies have offered themselves as the guarantors, the guarantee agreement dated 20.10.2008 and the memorandum for mortgage by deposit of title deeds dated 04.11.2008 (Annexure-C) are relied. The said documents relied on by the petitioner indicates that on behalf of the respondents it is shown to be executed by their authorized signatory Sri. Ramachandra Rao. Apart from contending with regard to the contents of the dates and the stamp paper having been purchased a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the contention presently urged in the objection statement herein is only a belated moonshine defense so as to brush the same aside or as to whether it is substantial, requiring consideration in any other proceeding? 16. In order to arrive at an appropriate conclusion, what is also to be kept in perspective is that undisputedly the parties are already before the learned Arbitrator in respect of the very same transaction. The legal position, no doubt is clear that if adequate material is available on record to indicate that the respondent company is unable to pay its debts, the winding petition will not be barred merely because of the pendency of any other proceeding. In the instant case, firstly it is a winding up petition filed against the guarantor company and not against the borrower company. Even though, in law the creditor would have the option of proceeding against the guarantor, the question raised herein is as to the very validity of the guarantee said to have been executed. In fact, that is also an issue raised in the Arbitration proceedings between the same parties, to which the borrower company is also a party. 17. The claim petition filed before Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this Court while acting as the Company Court is not expected to hold a full trial of the matter. 19. In the instant case, in any event the parties are already before the appropriate forum raising the same issues and the adjudication therein will settle these issues, which if held against the respondent company and at that stage if it is shown that they are unable to repay their debts, certainly the petition can be entertained at that stage, but as of now, the substantial issues raised will weigh in favour of the respondent to secure adjudication of the same in the forum where it is pending and that aspect cannot be decided at this stage based on the averments made in the petition and the objection statement. In that view, the decision relied on by the learned senior counsel for the petitioner in the case of Freeman Lockyer (A Firm) v. Buckhurst Park Properties (Mangal) Ltd. 1964 (2) W.L.R. 618 will not be of assistance herein. 20. Hence, at this stage, I see no reason to admit these petitions. The parties would have the liberty of having the dispute relating to the validity of the execution of the guarantee, adjudicated in the pending Arbitration. Observation herein, if a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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