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TMI Blog2014 (4) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is duly authorised by the Board and, therefore, he would come within the definition of officer within the meaning of Rule 21. There are no reason to accept the respondent s plea that Manager, as defined in sub-section 24 of Section 2, would exclude Manager (Law). Therefore, this plea is also rejected. The plea of the learned counsel for the respondent is that the case of the petitioner involves interpretation of the NAAC and, therefore, there is a clear case of dispute. The interpretation as urged by the learned counsel for the respondent is as to whether the liability would stand as against VLMS or the respondent. Here is a clear case of goods sold and delivered and debt acknowledged prior to 15.3.13 by the respondent. The question is whether the respondent herein, viz., ETA, or the transferee VLMS is liable - there are no justification to non-suit the petitioner on the ground that they have filed a petition before the High Court of Karnataka as against VLMS. All the plea taken by the respondents appears to be a mirage. In view of the clear admission of liability by acknowledgement of debts on various dates as stated above and the NAAC dated 15.3.13, the non-response to the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first one is a Recission Agreement dated 15.3.13 (Page - 347 of the typed set), whereby the agreement dated 16.5.12 was rescinded. On the same day, a fresh Novation Agreement for Assumed Contracts (for short 'NAAC' - page - 351 of the typed set) was signed, in and by which the three parties to the contract, viz., the petitioner, who was termed as the 'Service Provider', the respondent, who was termed as 'ETA' and Vikram Logistics & Maritime Services Pvt. Ltd., who was termed as 'VLMS' as successor and assigns. The terms of the NACC are set out for better clarity :- "1. NOVATION 1.1 The parties hereto agree that from the close of business hours of the closing date, the contract stands novated to VLMS and VLMS is entitled to all the rights, interests and benefits of ETA, and is responsible to perform and duly discharge all the obligations and liabilities of ETA arising under or pursuant to the contract. From and after the close of business hours of the closing date, any and all references to ETA in the contract shall be read as if they were references to VLMS. Except as provided in this agreement, the contract shall continue to be in force and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, liabilities, demands, suits, actions, causes of actions, losses, costs, damages, liabilities and expenses including reasonable attorneys' fees, directly or indirectly incurred, paid or accrued in connection with or resulting from or arising out of any breach of any covenants or representations made in this agreement or the contract." One Karunakaran Sathianathan signed as CEO for ETA Engineering, the respondent herein as well as the Managing Director of VLMS and Mr.A.K.Vijay, Sr. Vice President- Commercial signed for the petitioner. 3. In and by the above agreement, the entire business and liabilities of the respondent ETA stood transferred as 'Slump Sale' to VLMS. In this agreement, the liability of ETA stood transferred to VLMS, however, with assurance and indemnifying clause as stated above. In view of the continuing default, statutory notice was issued by the petitioner on 20.11.13 to ETA (page-366 of the typed set). There was no response to the same. However, there is an e-mail admission by the respondent on 2.12.13 (page - 385 of the typed set). The statutory notice under Section 433(e) of the Companies Act dated 20.11.13 issued to the respondent has also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have reserved their right to proceed against both ETA as well as VLMS and there is no clause in the agreement excluding ETA from the purview of legal action in a case of acknowledged debt. 6. Heard Mr. Arvind P. Datar, learned senior counsel appearing for the petitioner and Mr. Jose John, learned counsel appearing for the respondent. 7. Prima facie, from the admission of debt prior to the agreement dated 15.3.13 and going through the terms of the NAAC dated 15.3.13, coupled with the statutory notice dated 20.11.13, which has not been denied by the respondent, it is clear that the respondent is a beneficiary of goods sold and delivered for value and debt, which is acknowledged and the liability having been accepted, despite the agreement dated 15.3.13 to pay the debt, a clear case of inability to pay has been established by the petitioner. 8. The contention raised by the learned counsel for the respondent that the company is in a sound financial position and, therefore, it should not be wound up, cannot be countenanced in view of the decision of the Hon'ble Supreme Court in IBA Health (I) (P) Ltd. - Vs - Info-Drive Systems SDN. BHD (2010 (10) SCC 553), wherein the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be in Form No.3. Form No. 3 is reproduced hereunder: Form No.3 (See rule 21) (Heading as in Form No.1) Company Petition No................. of 19 ............... I, A.B., son of ............................................. aged ............. residing at......................................................................................... do solemnly affirm and say as follows: 1. I am a director/secretary/ ........... of ........... Ltd., the petitioner in the above matter (and am duly authorised by the said petitioner to make this affidavit on its behalf. (Note- This paragraph is to be included in cases where the petitioner is the company.) 2. The statements made in paragraphs .... ... of the petition herein now shown to me and marked with the letter `A are true to my knowledge, and the statements made in paragraphs....... are based on information, and I believe them to be true. Solemnly affirmed etc. *Note - To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of he company." 10. A careful reading of Rule 21 clearly shows that the plea advanced by the learned counsel for the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors, has the management of the whole, or substantially the whole, of the affairs of a company and includes a director or any other person occupying the position of a manger, by whatever name called, and whether under a contract of service or not. (30) "Officer" includes any director, managing agent, secretaries and treasurers, manager or secretary; where the managing agent or the secretaries and treasurers are a firm, also includes any partner in the firm; and where the managing agent or the secretaries and treasurers are a body corporate, also includes any director, managing agent, secretaries and treasurers or manager of the body corporate; but, save in sections 477, 478, 539, 543, 545, 621, 625 and 633 does not include an auditor." 13. From a plain reading of Sub-section (24) of Section 2 of the Companies Act, 1956, it is clear that the said term is an inclusive definition and, therefore, Manager (Law) of the petitioner company, who has signed the petition is duly authorised by the Board and, therefore, he would come within the definition of 'officer' within the meaning of Rule 21. I find no reason to accept the respondent's plea that Manager, as def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the reasons as stated above, all the plea taken by the respondents appears to be a mirage. In view of the clear admission of liability by acknowledgement of debts on various dates as stated above and the NAAC dated 15.3.13, the non-response to the statutory notice, goes to show that the petitioner has made out a prima facie case for admission. 18. Accordingly, this Court, for the aforesaid reasons, is satisfied that a prima facie case has been made out for proceeding against the respondent under Section 433(e) of the Companies Act. Hence, ADMIT. (i) Notice on the Court Notice Board. (ii) Notice to the Registrar of Companies, Madras. (iii) Affixture of notice at the premises of the Registered Office of the respondent company. (iv) The petitioner is directed to publish the company petition in one issue of Tamil Daily "Malai Murasu" and in one issue of English Daily "New Indian Express" and in the Tamil Nadu Government Gazette fixing the date of hearing on 16.6.2014. (v) The petitioner is directed to publish the company petition giving at least fourteen days clear advance notice. (vi) The Official Liquidator, High Court, Madras, is appointed as Provisional Liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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