9911796707
TMI Blog1988 (9) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985. At the time of renewal, the petitioner Bank bad executed on 29th June, 1985, confirmation letter acknowledging and admitting the balance as on 29th June, 1985, for a sum of ₹ 9,07,843.18 in favour of the petitioner Bank. By this letter, the respondent Mills also admitted as having given by way of hypothecation securities in respect of the properties as mentioned in Schedule A, to the said letter. There was also a letter of hypothecation by which the non-petitioner Mills agreed to hypothecate the goods and the movable property mentioned in the Schedule for the purpose of securing payment of any outstanding that may remain due and payable by it in favour of the petitioner Bank in the cash credit account. It is further stated by the Bank that as per the account books a debit balance of ₹ 6,19,854.34 remained outstanding against the respondent Company as on 1st January, 1986. Apart from the cash credit account, which the non-petitioner Company opened at Bhilwara Branch, it also applied for establishing letters of credit account at Singapore with one M/s Ringler PTE Limited, Suit 15D, Stamford House; 39, Stamford Road, Singapore 0617, as beneficiaries for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company at Bombay Port of the imported material. The case of the petitioner Bank is that it became entitled to receive the payment on the expiry of 180 days of the bill of exchange It is contended by the petitioner in the petition that this amount has not been paid to it. and on calculation in the Indian currency, the amount payable to the Bank as on 8th October, 1985, came to ₹ 4,91,900/-, excluding interest The petitioner Bank has further contended that the non-petitioner Company further requested for opening another letter of credit account with Ringler PTE (for short Ringler) as beneficiary. Respondents Nos. 2 and 3, who are Managing Director and Director of the respondent Company, respectively renewed their personal guarantee on 29th June, 1985, whereby they agreed and undertook to save the Bank harmless and keep it indemnified from and against all claims, demands, damages, losses, etc. It is further pleaded by the petitioner Bank that the non-petitioner Company and its directors played serious fraud on the petitioner Bank by not intimating the Bank of non-receipt of the goods covered by the said letter of credit for which bill of exchange (Annx. 9) bill of lading (Annx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the surety bond the non-petitioner Company managed to get delivery orders from the Shipping Company without production of the documents relating to the goods covered by the second letter of credit. It is also pleaded by the petitioner Bank that there was complicity of the Shipping Company and the non-petitioner Co. as the Shipping Company did not take any steps for ensuring deliveries as the obvious intention appears to be to mislead and to cheat the petitioner Bank. It is, thus, submitted by the petitioner Bank that the petitioner Bank is entitled to recover from the non-petitioner Company a sum of ₹ 16,19,155/-along with other sums and interest etc. The petitioner Bank has also mentioned that the Shipping Company has filed a suit against the petitioner Bank on the basis of the guarantees given by the Bank for a sum of ₹ 14,27,152.55 The petitioner Bank has served notice on the non-petitioner Company on 3rd January, 1986, demanding the payment as mentioned above and summarised as follows: (1) In cash credit account ₹ 6,19,854.34/- (2) In First letter of Credit A/c ₹ 5,13,325.11/- (3) In 2nd Letter of Credit A/c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the L.C. No. 8/85. Despite this notice, dated 2nd August, 1985, which was received by the petitioner on 12th August, 1985, the payment was made even before the acceptance of bills, the due date of which was 14th September, 1985. It is also asserted by the petitioner Bank that the Branch of the UCO Bank at Singapore committed breach of the conditions of letter of credit and the petitioner is only trying to protect the wrong action of its branch at Singapore. It was, therefore, despite the injunction order of the High Court at Singapore, the UCO Bank at Jaipur made the payment to the UCO Bank Branch at Singapore. The non-petitioner Company had filed a regular suit before the High Court of Singapore. It was, therefore despite the injunction order of the High Court at Singapore, the UCO Bank at Jaipur made the payment to the UCO Bank Branch at Singapore. The non-petitioner Company had filed a regular suit before the High Court of Singapore. It is also contended that this material fact has been suppressed by the petitioner Bank in the winding up petition. Regarding second letter of credit pertaining to LC No. 44/85, ₹ 16,90,155.00, the non-petitioner has submitted that the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assistance to the non-petitioner Company and the dues against the non-petitioner No. 6 as on 1st April, 1986 was of ₹ 49,61,45/-. Non-petitioner No. 5 has also pointed out that as secured creditors with non-petitioner No. 5, they are entitled to realise their dues by selling the assets of the Company forming security of their loans independent of the winding up proceeding in terms of Section 529 of the Companies Act, 1956 7. On behalf of non-petitioner No. 4, Shri B. P. Agrawal appeared and on 29th August, 1988, he raised an objection that respondent No. 4 has wrongly been impleaded as a party to the petition. He has also filed a written reply in this regard, wherein he has prayed that the name of respondent No. 4 be struck out from the array of parties. An application for appointment of provisional liquidator was also filed by the petitioner Bank On this application, it was ordered that arguments will be heard at the time of hearing the petition. On 20th Feburary, 1987. Shri Gulab Chand Jagatia, Managing Director of the Mills was present in person and submitted that he has no objection if the bank guarantees which are with the petitioner he encashed by the petitioner Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial amount is outstanding against the non-petitioner Company which had failed to make payment inspite of statutory notice under Section 434 of the Companies Act, 1956 and, thus, the Company is commercially insolvent and is liable to be wound up. In order to support his contention, Shri Garg has placed reliance on Syndicate Bank v. Southern Oils and Extractors Ltd 1985, 57 Comp. Case 8; Paramount Enterprises v. In Re. (1985) 57 Comp Case 200; Universal Glass Ltd. v. Meerut Bottlers Pvt. Ltd (1985) 58 Comp Case 68. Anil Vasudev Salgaonkar v. Kermeen Foods P. Ltd. (1985) 58 Comp Case 156, Smt. Bhag Kaur and Ors. vs Roopnagar Credit and Investment P. Ltd., [(1984) 56 Comp Case 414], New Swadeshi Mills of Ahmedabad v. Dyechem Corporation (1986) 59 Comp Case 183, Premier Vegetable Products vs. United Asian Bank, [(1980) 50 Comp Case 680] and other cases. The sum and substance of his argument is that if a Company becomes commercially insolvent and there is on record a proof about the failure to make payment of debt, inspite of notice of demand, the Company should be wound up. Without referring to the cases individually, 1 may state that the cases referred to above are distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sold and the money realised may be adjusted against any liability outstanding against the Company. Thus, in respect of claim No. 1 i.e. cash credit account. I am of the view that the petitioner Bank is in a position to liquidate the debt which it claims against the non-petitioner Company and the defence, thus, raised in this regard cannot be said to be malafide. rather, I am of the opinion that the defence is bonafide and is of a substantial character. 10. As regards claim under two letters of credit, I am of the opinion that the defence raised by the non-petitioner Company is also bonafide and is a substantial one. It is not disputed between the parties, that a suit is pending in the Court at Singapore, which had been filed against Ringler and there is another suit which is pending before the Bombay High Court filed by the Shipping Company, respondent No 4 against the Bank. In both the suits, the questions raised are, as to whether the petitioner Bank acted against the terms of the letter of credit, or it is the respondent Company who has violated the terms of the agreement. Whatever may be the position, the suits between the parties are pending where in allegations have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
