9911796707
TMI Blog2002 (10) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... e above said objects. The petitioners are SEBI-registered Cateogory-1 Merchant Bankers, who have adequate experience and expertise to advise parties on investments, takeovers, mergers, spin-offs and other related activities. When the respondent herein had the requirements of such advice, they had sought the petitioner's services in 1996, in the matter of evolving a restructuring proposal for the respondent company. The respondent and petitioner had entered into an agreement, vide their letters dated 11.10.96 and 25.3.97, in respect of the quantum of fees payable. This agreement also provided for an abortion fee, i.e., a fee payable upon the deal evolved by the petitioner not going through. The respondent engaged the petitioner's services for the sale of the respondent's controlling stake in Aruna Sugar Finance Ltd., the Sugar and Distillery Division of the respondent, and the Hotel Division of the respondent. In pursuance of the aforesaid mandate given by the respondent to the petitioner on 25.3.97, the petitioner evolved a restructuring proposal for the respondent. Presentations were prepared and made to be given to lending institutions, banks for the reschedulement an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.9.99, denying their liability altogether, notwithstanding the respondent's own letters dated 22.7.98 and 30.12.98. The respondent is admittedly liable to pay a sum of ₹ 30,00,000 towards the petitioner's professional charges. The respondent is unable to discharge its liabilities as and when they become due, and is liable to be wound up in accordance with the provisions of the Companies Act. 3. The respondent company filed a counter statement disputing various averments made by the petitioner. It is stated that though the petitioner had taken steps to bring the parties like Nagarjuna, their representations nor the presentation was effective to make them agree for purchase of the sugar and distillery divisions. The petitioner could not complete the assignment successfully within the expected time period. Because of the ineffectiveness of the petitioner, the respondent was constrained to appoint an alternative agency for sale of sugar and distillery divisions. The re-structuring programme submitted by the petitioner was so ineffective to persuade prospective buyers to buy the assets of the company at their real value. Buyers quoted very low consideration and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , their chances of success, and the merits of each option based on the strength/weakness of each division and the respective industry outlook. It is also the case of the petitioner that various representations and discussions were held with local and various investors. Legal advice on various issues relating to the restructuring the spin-off was obtained from legal practitioners. It is also the case of the petitioners that because of their efforts, there was a response from Nagarjuna Group for buying the respondent's sugar and distillery divisions, and negotiations were carried on by the petitioner with them in July and August, 1997. It is also the grievance of the petitioner that at the stage of completion, the respondent backed out of the negotiations without offering any reason therefore and that the entire deal arranged by them, between the respondent and Thiru Arooran Sugars Limited at one end, and Nagarjuna Group, at the other, fell through, for no fault of the petitioner. In this regard, learned counsel for the petitioner very much relied on a letter of the respondent dated 22.7.98 wherein the following passage was pressed into service: ...I confirm having received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory notice through their counsel on 17.8.99, calling upon them (respondent) to pay ₹ 30 lakhs, together with interest thereon at 20% per annum from 1.4.98 till the date of actual payment. For the said notice, the respondent company sent a reply through their counsel on 30.9.99. Only in this notice the respondent raised an objection that the petitioner did not complete the assignment which was given to them, to their satisfaction, within the stipulated time and at acceptable consideration. It is further stated that since the respondent has already paid a sum of ₹ 20.34 lakhs, no question of paying any further amount will arise as claimed. As rightly contended by the learned counsel for the petitioner, for the first time, that is in the reply notice dated 30.9.99, the respondent has raised the plea that the petitioner did not complete the assignment to their satisfaction. I have already referred to the letters dated 22.7.98 and 30.12.98 written by the Managing Director of the respondent, more particularly in the letter dated 30.12.98, the Managing Director has agreed to pay a sum of ₹ 17 lakhs in full quit of all claims. In the light of those letters and in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unable to pay its debt. 7. Mr. Srinath Sridevan, learned counsel for the petitioner, has very much relied on a decision of the Apex Court in M. Gordhandas and Company v. M.W. Industries. The following statements of law of -Their Lordships are relevant: (para 20 and 21) 20. Two rules are well settled. First if the debt is bona fide disputed and the defence is a substantial one, the Court will not wind up the company. The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable (See London and Paris Banking Corporation, (1874) 19 Eq.444. Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been done properly was not allowed. (See Re.Brighton Club and Norfolk Hotel Co. Ltd., (1865) 35 Beav. 204) 21. Where the debt is undisputed the Court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt (See Re. A Company 94 SJ 369). ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
