9911796707
TMI Blog2017 (6) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant years, the share capital of the respondent was increased in view of the allotment of 41300 equity shares to the petitioner and simultaneously the loan amount reflected in the balance sheet of the respondent taken from various parties was correspondingly reduced in view of the conversion of the loan amount of ₹ 4,13,00,000/- given by the petitioner. None of such balance-sheets of the respondent are disputed by the petitioner. A perusal of the record indicates that the relationship of the petitioner with the Pankaj Extrusion Ltd. which is denied initially has been accepted by the petitioner belatedly in the rejoinder. The case of the petitioner is totally inconsistent and contradictory. There are several disputed facts. Various triable issues are raised by the parties in this company petition and the affidavits. In my view, the defence raised by the respondent is bonafide and not moonshine and is supported by various documentary and circumstantial evidence. There is no merit in the submission of the learned counsel for the petitioner that the documents relied upon by the respondent which are alleged to have been filed by the Registrar of Companies are unilat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent lured for financial assistance on agreeing to pay interest on borrowed funds @18% p.a. The petitioner accordingly lent ₹ 300 lakh during the period between 25th March 2003 to 1st March 2004 to the respondent repayable with interest @ 18% p.a. According to the petitioner, the loan advanced with interest by the respondent came to the tune of ₹ 4,13,00,000/-. The petitioner has annexed a copy of the ledger account of the respondent-company for the financial years 200203 to 2004-05. It is the case of the petitioner that the respondent paid agreed rate of interest @ 18% p.a. in the financial years 2002-03 to 2004-05 and lastly till 31st March 2006. The respondent did not pay any interest since 31st March 2007. 3. It is the case of the petitioner that the petitioner had orally as well as in writing had requested the respondent to remit the principal amount and interest accrued thereon. The petitioner was shocked and surprised to receive a communication dated 30th September 2006 from the respondent which was alleged to have been received by the petitioner in the month of February 2008 alleging that the Board of Directors of the respondent company had approved in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent to pay a sum of ₹ 4,13,00,000/- along with interest @ 18% p.a. from 1st April 2006 till date. There was neither any response to the statutory notice nor any payment made by the respondent in response to the said notice. 8. Some time in the month of May 2009, the petitioner accordingly filed this petition inter alia praying for winding up of the respondent company on the ground that the respondent is unable to pay its debts and prayed for appointment of the official liquidator of the assets, effects and business affairs of the respondent with all necessary powers under the provisions of the Companies Act, 1956. 9. By an order dated 6th November 2009, this Court admitted this company petition. The respondent was absent when the matter was heard by this Court. The respondent has filed a detailed affidavit-in-reply and also filed an additional affidavit. The petitioner has filed rejoinder. The respondent has filed sur-rejoinder. 10. Mr.Bharucha, learned counsel appearing for the petitioner invited my attention to the annexures to the company petition including the ledger account of the respondent annexed to the company petition and would submit that the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been issued by the respondent in respect of 41300 equity shares in the name of the petitioner. He submits that the petitioner did not receive any such alleged share certificate in respect of 41300 equity shares alleged to have been allotted from the respondent to the petitioner at any point of time. He submits that the petitioner was not the shareholder of the respondent. The petitioner never exercised any rights of his shareholdings in the respondent company. The petitioner never received any notice of meeting or any other communication from the respondent as a shareholder of the respondent. 13. Learned counsel for the petitioner invited my attention to the Directors' Report dated 17th May 2007 annexed at Exhibit 'E' to the affidavit-in-reply along with financial documents and would submit that in the said report of the Chartered Accountants of the respondent and more particularly in paragraph 18 of the said report, it is clearly mentioned that the respondent had not made any preferential allotment of shares during the financial year ending on 31st March 2007 to any of the parties and companies covered in the register maintained under Section 301 of the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the alleged oral understanding between the petitioner and the respondent for conversion for loan of ₹ 4.13 crore into equity shares has not been proved by the respondent in any manner whatsoever. He submits that the defence of the respondent is not a bonafide defence but is sham and moonshine. 17. Learned counsel for the petitioner placed reliance on the judgment of the Calcutta High Court in the case of Pawan Kumar Agarwal and Ors. Vs. North Bengal Neuro Research Centre P. Ltd., reported in (2008) 143 Comp Cas 235 (Cal) and more particularly paragraphs 5 to 9 and 11 to 14 and would submit that the Calcutta High Court in the similar facts in hand rejected the similar defence raised by the respondent and has entertained the company petition for winding up of the respondent company filed by the petitioner therein. He submits that unauthenticated and unilateral document produced by the respondent cannot be relied upon by this Court in support of the allegation of the respondent that the loan amount of ₹ 4.13 crore was converted into equity shares. 18. Learned counsel for the petitioner placed reliance on the judgment of this court in case of J .K. Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent to the petitioner is concerned, it is alleged in paragraph 3(c) of the petition that the said letter was alleged to have been received by the petitioner in the month of February 2008. He submits that the petitioner did not produce any letter after 31st March, 2007 and before 5th March, 2008 from the petitioner to the respondent calling upon the respondent to pay interest w.e.f. 31st March, 2007. 21. It is submitted that by the said letter dated 30th September, 2006, the respondent had specifically informed the petitioner that as per their discussions, the board of directors of the respondent had approved in their board meeting dated 29th September, 2006 and alloted 41,300 equity shares of the respondent to the petitioner against the unsecured loan of ₹ 4,13,00,000/- to the respondent. The respondent informed the petitioner that the loan was converted into 41,300 equity shares. He submits that in the said letter dated 5th February, 2008, the petitioner did not refer to the letter dated 30th September, 2006 and did not deny the contents thereof but simpicitor demanded repayment of loan with interest. He submits that the said letter dated 30th September, 2006 was sent b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner in lieu of the outstanding loan amount of ₹ 4,13,00,000/-. 25. Learned senior counsel invited my attention to the courier receipt dated 16th October, 2006 annexed to the affidavit in reply and also to the fax activity report to demonstrate that the fax was sent by the respondent to the petitioner on 16th October, 2006 at 15.59 hours on fax no.23894207. He submits that the said fax number is mentioned on the said letter dated 30th September, 2006 which was sent by the respondent to the petitioner. It is submitted that it is clear that the said letter dated 30th September, 2006 was delivered to the petitioner by fax on 16th October,2006. He submits that the allegations made by the petitioner in paragraph 4(c) that the said letter dated 30th September, 2006 was received by the petitioner in the month of February 2008 is ex-facie false and misleading. He also invited my attention to the averments made by the respondent in the affidavit in reply and more particularly in paragraph 4A(d) stating that the respondent had vide its letter dated 30th September, 2006 had apprised the petitioner that the loan amount of ₹ 4,13,00,000/- granted by it had been converted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers. He submits that this averments made by the respondent is not disputed by the petitioner. 28. Learned senior counsel for the respondent also invited my attention to the fax dated 27th May 2010, 28th May 2010 and 29th May 2010 sent from the fax of Pankaj Extrusion Ltd. to the respondent thereby requiring various details of issued shares of 41,300 shares of the respondent and a copy of the share certificate etc. It is submitted that the said fax itself would indicate that the petitioner and the said Pankaj Extrusion Ltd. belongs to the same group of Shah family. 29. Learned senior counsel for the respondent invited my attention to the share certificate bearing no.68 issued by the respondent in favour of the petitioner bearing 41,300 shares and Distinctive Nos. 995651 to 1036950. He also placed reliance on the challan issued by the Ministry of Company Affairs dated 19th October,2006 showing the receipt of fee for Form 2 submitted by the respondent showing that on 30th September,2006, the petitioner was issued 41,300 equity shares of the respondent and also showing amount paid on application in the sum of ₹ 4,13,000/- at the rate of 10/- per share on application and &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned senior counsel for the respondent invited my attention to paragraph (7) of the affidavit in rejoinder affirmed on 14th December,2010 and filed on 1st March,2016 in reply to the further affidavit of the respondent dated 27th October, 2010. He submits that in paragraph (7) of the said rejoinder filed by the petitioner, the petitioner has admitted an averment made in paragraph (6) of the further affidavit dated 27th October 2010 referring to five fax messages from the petitioner dated 27th May 2010, 28th May 2010 and 29th May 2010 seeking further information and reminding the respondent to complete the sale formalities with respect to the 41,300 shares. In the said paragraph the petitioner though admitted that all such fax were sent however alleged that the same were sent after knowledge of illegal conversion of the loan to the equity share by the respondent. He submits that in the said paragraph, the petitioner has admitted that the petitioner had been calling upon the respondent to provide the details of issuance of 41,300 shares. He submits that the petitioner however falsely alleged that in all such fax sent on 27th May 2010, 28th May 2010 and 29th May 2010 were in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and more particularly when those five fax were sent from the number of Pankaj Extrusion Ltd. is ex-facie false and contrary to its own affidavit in reply dated 13th April, 2016 filed by the petitioner to the additional affidavit on behalf of the respondent. It is submitted by the learned senior counsel that the petitioner has not filed any returns with the Registrar of Companies for last eight years. In the income tax returns for the financial year 2006-07 and 2007-08, the alleged loan given by the petitioner to the respondent is not reflected by the petitioner. 37. In so far as submission of the learned counsel for the petitioner on the alleged non-compliance of section 81(1A) of the Companies Act, 1956 by the respondent is concerned, learned senior counsel invited my attention to paragraph (7) of the affidavit in rejoinder dated 1st March,2006 filed by the petitioner disputing the board resolution dated 29th September, 2006. He submits that the conversion of the loan into the equity share is disputed on the ground of higher premium of ₹ 990/- per share. He submits that no such ground alleging violation of section 81(1A) of the Companies Act, 1956 has been raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner on annexures to the Auditor's Report of the respondent for the year ended 31st March, 2007 and more particularly paragraph (18) thereof is concerned, it is submitted that in the said paragraph the auditor has observed that the respondent company has not made any preferential allotment of the shares. He submits that the said report does not indicate that no equity share/preference share were issued by the respondent in favour of the petitioner or any other party during the said period. He submits that all the notices were served upon the petitioner from time to time about various annual general meetings held by the respondent in which all the shareholders were invited. 41. Mr. Bharucha, learned counsel for the petitioner in rejoinder submits that the letter dated 30th September, 2006 from the respondent to the petitioner is back-dated letter. He submits that the averments made by the petitioner that the said letter was received in the month of June 2008 is an inadvertent error. He however fairly submits that the petitioner has nothing to show on record that the said letter dated 30th September, 2006 was received by the petitioner on a particular date as alleged in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent has not produced any proof to show that along with the envelop on page 161 of the affidavit showing the envelop of Pankaj Extrusion Ltd., letter dated 18th February, 2008 was alleged to have been sent by the petitioner to the respondent was delivered. 44. It is submitted by the learned counsel for the petitioner that in the income tax returns of the petitioner for the Assessment Year 200607 and in the balance-sheet as on 31st March,2016, the petitioner has reflected the loan amount of ₹ 4,13,00,000/- to the respondent. He submits that the petitioner has not added the interest payable by the respondent to the petitioner w.e.f. 1st April, 2007 in the books of account in view of the fact that the petitioner maintain the books of account on accrual basis and if the interest would have been reflected in the books of account of the petitioner, the petitioner would have become liable to pay income tax on the interest income on accrual basis. It is submitted that by those five fax annexed at Ex.G, the petitioner had not made any request for sale of shares in question but had asked for details of shares which the petitioner did not have. He submits that the fax number menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bar cannot be relied upon. He submits that the respondent has even otherwise failed to show that the petitioner was alloted 41,300 shares under the resolution produced before this court. 48. Mr.Dhond, learned senior counsel for the respondent invited my attention to the letter dated 16th October, 2006 addressed by the petitioner to the respondent on the letterhead of the petitioner which contains the said fax number i.e. 23894207 denied by the petitioner deliberately and contrary to the said fax number mentioned on the letterhead of the petitioner. He submits that it was for the recipient of the letter received from the respondent to show what documents were received by the recipient i.e. the petitioner from the respondent and from what fax number. It is submitted that the special resolution has to be passed before increasing the subscribed share capital. After such increase in the subscribed share capital, board can decide about the allotment of shares. He submits that there is no legal bar under section 81(1A) of the Companies Act, 1956. He submits that the allotment to the petitioner is not made in the Annual General Meeting. He submits that the board can pass a resolution fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said letter dated 5th February 2008 and the subsequent reminder letter dated 18th February 2008, the petitioner did not refer to the letter dated 30th September 2006 addressed by the respondent informing the petitioner of allotment of 41300 equity shares to the petitioner in lieu of the outstanding loan of ₹ 4,13,00,000/-. In support of the case of the respondent that the respondent had allotted 41300 equity shares by the respondent to the petitioner in lieu of outstanding loan amount of ₹ 4,13,00,000/-, the respondent placed reliance on the following documents/pleadings :- (i) The board resolution dated 29th September, 2006 allotting 41300 shares to the petitioner in lieu of the outstanding loan amount of ₹ 4,13,00,000/-; (ii) The legal notice dated 18th July, 2008 addressed by the petitioner through its advocates to the respondent alleging that the said letter dated 30th September, 2006 sent by the respondent to the petitioner was received by the petitioner in the month of June 2008; (iii) The courier receipt dated 16th October, 2006 and also the fax activity report to demonstrate that the said letter was sent by courier as well as by fax by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther affidavit dated 27th October, 2010 filed by the respondent referring to five fax messages from the petitioner dated 27 th May 2010, 28th May 2010 and 29th May 2010; (xi) The order passed by this Court in the Company Appeal No.59 of 2009 dated 7th July 2010 observing that there were four group of shareholders in Pankaj Extrusion Ltd. referred to as Mr.Babulal N. Shah, Mr.Harakchand N. Shah, Mr.Pravinchandra N. Shah, Mr.Sureshchandra N.Shah and Mr. Dineshchandra N. Shah groups; (xii) A copy of the resolution dated 1st April, 2008 passed by the board of directors of the petitioner resolving that Mr. Harakchand N. Shah, the director of the company was authorized to sell the shares held by the petitioner in the respondent and to sign the share transfer deed on behalf of the petitioner and to execute other requisite documents. It is the case of the respondent that the petitioner has falsely denied the contents of the resolution dated 1st April, 2008 and the signature thereon; (xiii) The letter dated 16th October, 2006 addressed by the petitioner to the respondent seeking loan confirmation letter from the respondent for the financial year 2005-06 which was sent by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced in view of the conversion of the loan amount of ₹ 4,13,00,000/- given by the petitioner. None of such balance-sheets of the respondent are disputed by the petitioner. 54. In so far as the submission of the learned counsel for the petitioner that the Board Resolution dated 1st April 2008 alleged to have been passed by the petitioner authorising Mr. Harakchand N. Shah to sell the shares held by the petitioner in the respondent company is not passed and is fabricated by the respondent is concerned, in my view, the reliance placed on the said resolution is in conformity with the other documents produced by the respondent for consideration of this Court showing the allotment of 41300 shares of the respondent to the petitioner in lieu of the outstanding loan of the petitioner in the books of accounts of the respondent in the sum of ₹ 4,13,00,000/-. In my view, the said resolution cannot be doubted also on the ground that the petitioner had sent five fax messages to the respondent inquiring about those shares including the sale in respect thereof. In my view, there is thus no substance in the submission of the learned counsel for the petitioner. 55. In so far as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, it was the case of the petitioner that the said letter was received by an ordinary post. Mr.Bharucha, learned counsel for the petitioner fairly stated that the petitioner is not in a position to produce any envelope containing such letter dated 30th September 2006 in support of the submission of the petitioner that the said letter was received in the month of February 2008 or June 2008 or was sent by ordinary post and not by fax. On the other hand, the respondent has produced the copy of the courier receipt showing the acknowledgment of the said letter by Pankaj Extrusion Ltd. The respondent has also produced the fax activity report to demonstrate that the fax was sent by the respondent to the petitioner on 16th October, 2006 at 15.59 hours on fax no.23894207. The said fax number was admittedly the fax number of Pankaj Extrusion Ltd., a group company of the petitioner. The petitioner itself had sent various letters from the same fax number to the respondent. The petitioner also admitted belatedly that at the relevant time, the said Pankaj Extrusion Ltd. was a group company of the petitioner. 58. I am thus inclined to accept the submission of the learned senior counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of the record indicates that the relationship of the petitioner with the Pankaj Extrusion Ltd. which is denied initially has been accepted by the petitioner belatedly in the rejoinder. The case of the petitioner is totally inconsistent and contradictory. There are several disputed facts. Various triable issues are raised by the parties in this company petition and the affidavits. In my view, the defence raised by the respondent is bonafide and not moonshine and is supported by various documentary and circumstantial evidence. 62. In so far as the submission of the learned counsel for the petitioner that the annexures to the auditor's report of the respondent for the year ended 31st March, 2007 and more particularly paragraph (18) would show that the respondent company has not made any preferential allotment of the shares and thus the contention of the respondent at the same time that the petitioner was allotted 41300 shares is false is concerned, a perusal of paragraph (18) of the said auditor's report indicates that the auditor has observed that the respondent company has not made any preferential allotment of the shares and has not observed that no equity shares/pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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