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TMI Blog2014 (1) TMI 1955X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to any further time to pay its admitted dues before the petition is admitted. The respondent owes more than Rs. 15 crores to the petitioner and initial payment of Rs. 1 crore was in the given facts most reasonable. However the respondent has even failed to pay the initial amount of Rs. 1 crore for almost a year despite undertaking to do so on more than one occasion. The record of this case bears out that the respondent has been granted several opportunities to arrive at an amicable settlement to pay its dues to the petitioner bank. However, despite the opportunities granted, the respondent has failed to arrive at an amicable settlement. On 25.10.2012, the respondent had once again undertaken to pay a sum of Rs. 27 lacs in three installments. Admittedly, the respondent has failed to make even this payment to the petitioner. Given the fact that the respondent has not placed any concrete scheme for repayment of dues by the respondent to its creditors, the respondent is not entitled to any further extension of time and there is no reason to defer the admission of the present petition. The present petition is admitted. X X X X Extracts X X X X X X X X Extracts X X X X ..... aring by this Court on 10.02.2012 and the Court while issuing notice, restrained the respondent company from selling, transferring or in any manner alienating its fixed assets till further orders. It is relevant to note that at that stage the petitioner had also filed an application being CA No.283/2012 for appointment of the Official Liquidator as the Provisional Liquidator. However, the said application was not pressed at that stage and was, accordingly, disposed of on 10.02.2012. On the next date of hearing i.e. 13.04.2012, the learned counsel for the respondent sought time to file its reply affidavit and was granted eight weeks time to do so. However, the respondent chose not to file any reply to contest the petition and on the next date of hearing, which was held on 05.09.2012, it was submitted that the respondent company was in the process of restructuring its affairs and the dues of the petitioner as well as other creditors would be considered and worked out by amicable settlements between the respondent company and its creditors. On the basis of the statement made on behalf of the respondent, the petition was re-notified on 17.12.2012 and it was further directed that a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not object to the automatic appointment of the provisional liquidator. Compliance be effected by way of an affidavit of the managing director of the respondent which shall be filed within three weeks from today with advance copy to the petitioner which shall detail the further manner and mode of the balance payment. Reply also be filed in three weeks with advance copy to the petitioner who may file rejoinder before next date. Renotify for 21.3.2013. C.A. No.2468/2012 in CO.PET. 36/2012 & C.A. No.2469/2012 in CO.PET. 66/2012 In view of the aforenoted undertaking these applications have become infructuous. They are disposed of accordingly." 7. It is apparent from the above that as far as the merits of the petition is concerned, this Court had recorded that on merits the amount claimed by the petitioner was not disputed and in view of the failure of the respondent company to discharge the same, a winding up order was called for. However, an order admitting the winding up petition was not passed so as to grant further time to the respondent company to tide over its difficulties and arrive at an amicable settlement for discharge of its liabilities. This Court, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he will convey the decision of the Petitioner in that regard on the next date. 3. List on 1st March 2013." 9. Thereafter, it appears that certain settlement talks as to the manner of repaying the balance amount due to the petitioner took place between the respondent company and the petitioner. It is to be noted that although, on 19.02.2013, the respondent had undertaken that a sum of Rs. 1 crore would be paid on or before 31.05.2013, this undertaking was also not complied with and, thereafter, the matter was listed for hearing and was subsequently re- notified on three occasions. On 24.07.2013, the learned counsel for the parties had submitted that there had been some headway in the talks for settlement and it was agreed that Mr Sanjiv Narula, the Managing Director of the respondent would assign two policies with the current value of Rs. 66 lacs and Rs. 18 lacs approximately in favour of the petitioner bank to enable the bank to encash the same and realize Rs. 70 lacs out of the initial payment of Rs. 1 crore as agreed to be paid earlier. An undertaking to the above effect was recorded and accepted by this Court. The proposal made by the respondent for clearing the balance dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s correct in his submission that no further arguments are necessary in view of the statement made by the learned counsel for the respondent on 17.12.2012 that he would not object to the automatic appointment of the Provisional Liquidator in the event the undertaking and commitments given by the respondent were not honoured, and, there is no dispute that the respondent had failed to honour its commitment made on several occasions as indicated above, nonetheless, in the interest of justice, I considered it appropriate to hear the learned counsel for the respondent and have heard him at length. 13. Mr Tanmaya Mehta, learned counsel for the respondent fairly pointed out, at the outset, that the debts claimed by the petitioner were admitted and there was no dispute that the amount as claimed was due and payable by the respondent to the petitioner bank. He, however, focused his submissions on the aspect that even in cases where debts were admitted, a winding up order need not be passed. He submitted that the respondent company provided substantial employment and also had contributed to the revenue of the country by paying substantial taxes in the past several years. He further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which are going through financial crisis by providing reasonable time to enable them to pay their dues. However, a creditor of a company is ex debito justitiae entitled to maintain a petition for winding up of the company, if such company is unable to pay its debts and the discretion vested with the court is to be exercised judicially. In the facts of the present case, the issue to be addressed is whether the respondent is entitled to any further time to pay its admitted dues before the petition is admitted. 16. At the outset, the learned counsel for the respondent was asked whether the respondent was willing to pay the outstanding two installments which were payable on 10.11.2012 and 12.12.2012, within a short period. However, he stated that the respondent would require further three months time to pay this amount The respondent owes more than Rs. 15 crores to the petitioner and initial payment of Rs. 1 crore was in the given facts most reasonable. However the respondent has even failed to pay the initial amount of Rs. 1 crore for almost a year despite undertaking to do so on more than one occasion. The record of this case bears out that the respondent has been granted several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the Official Liquidator be appointed as a Provisional Liquidator to take charge of the assets of the company. Although, no formal application for appointment of the Provisional Liquidator is pending, nonetheless, it is apparent that the respondent company has been making payments to creditors on a selective basis as it has been submitted by the learned counsel for the respondent that the respondent company is functional and has been effecting payments to certain unsecured creditors for the purpose of its business. In my view, a company which is prima facie liable to be wound up cannot be permitted to pick and choose the creditors whose dues they wish to discharge. The assets of the company are liable to be distributed equitably in the manner as set out in the Companies Act. The respondent company was also aware that in the event the sum of Rs. 1 crore was not paid in terms of the undertaking as recorded in the order dated 17.12.2012, the Official Liquidator would be appointed as the Provisional Liquidator. Thus, there is also no reason to delay the appointment of a provisional liquidator. 22. In view of the foregoing, the present petition is admitted. 23. The petitioner sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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