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TMI Blog2014 (2) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... e said company has been wound up. It has one shareholder and one director. The respondent company has two shareholders and two directors. They are husband and wife. The husband is the sole shareholder and director of the sister concern. Both the companies share a common website and are stated to be members of a group of companies. They have common offices. The website specifies that the sister concern of the respondent company is the representative of the group handling overseas business and is located in Hongkong and one of the world trading centre. The petitioner has contended that after the petitioner sued the respondent company in the Civil court it had modified its website. 4. The fact that the two companies are sister concerns is not disputed. The fact that the sister concern has been wound up under the order of the Hongkong High Court dated 22.10.2012 and a receiver has been appointed is also not disputed. 5. The liabilities of the sister concern of the respondent company under the charterparty are not met. Consequently the petitioner exercised lien over the cargo of said sister concern until its outstanding freight, demurrage and detention charges were paid, as per its ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy. Failing which party A and B to be mutually discuss about discharge and payment schedule. (emphasis supplied) 10. Clause 5 is to take effect upon the effective execution of clauses 1 and 2. Clauses 1 and 2 only show the confirmation of the liability of the respondent company and their agreement to make the payments to discharge those liabilities, hence upon the due execution of the confirmed liability by payments the reciprocal promise of the petitioner to discharge the cargo would commence. If the payment is not made as specified in clauses 1 and 2, the parties would have to discuss about the discharge as also about the payment schedule. The payment, either fully to the extent of the liability as stated in clauses 1 and 2 or as per schedule to be prepared by the parties is, therefore, unmistakable. It is rightly argued on behalf of the petitioner that if payment is made as confirmed and promised, the petitioner would discharge the cargo. If the payment is not made the petitioner would not discharge the cargo. Then the parties would discuss about how and when the petitioner would discharge the cargo and the respondent company would make payment as per the schedule discussed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be in the lumpsum by 30.7.2012 or in the instalments later. In a similar case of an individual guaranting payment by a company, he was held to be a surety under a contract of guarantee and was held continued to be liable to the Creditor even after the winding up order of the company. It was held that the guarantor is not discharged even by a scheme of composition as it is by operation of law. (See Punjab National Bank Ltd Vs. Bikram Cotton Mills Ltd., AIR1970 SC 1973) The confirmation of the admitted and expressly confirmed liability is in fact in the expression "payment schedule". This become clear upon reading clauses 1 and 2 along with clause 5 of the agreement. The absolute liability in clauses 1 and 2 is unmistakable. Only a leave is granted to the respondent company to make the payment because if the payment is not made, the Cargo would not be discharged and parties would meet and discuss when the cargo would be discharged and how and when the payment would be made. Reading the three clauses together cannot admit of any other construction of the three clauses specifically with regard to the admitted liability for payment. Further it has been specified in clause 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken into account. The petitioner appears to have taken the average figure within that range into account. The company court cannot concern itself with a liquidated amount due and payable. It has to only see whether Rs. 1,00,000/- (rupees one lakh only) would be due and payable or the respondent company has shown a bonafide defence for non-payment. 17. The statutory notice sets out the execution of two charterparties with the associate company of the respondent company. It also shows how it failed and neglected to make payment of the freight, demurrage and detention dues under the charterparties executed by it. It further shows that consequently the respondent company, in its capacity as a guarantor of its sister concern, confirmed that it would be paying the amount which otherwise its sister concern was liable to pay by 30.7.2012. The notice sets out the liability in clauses 1 and also clause 2 of the agreement dated 18.7.2012. It is further mentions about another agreement and the liability thereunder but with which this Court is not concerned. The notice thereafter sets out the insolvent status of the sister concern of the respondent company with which also this Court is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erve Bank of India (RBI) Exchange Control Department No. FEMA 8/2000-RB dated 3.5.2000 under the Foreign Exchange Management (Guarantees) Regulations, 2000 issued under Section 47 of the Foreign Exchange Management Act, 1999 (FEMA). Under the said notification a person or a company resident in India is prohibited from giving a guarantee in respect of any transaction or debt, obligation or liability owned by a foreigner without the special permission of the RBI. 21. The said defence would have to be considered for testing its bonafides. Indeed the petitioner, upon its obligation under the agreement, released a part of the cargo on the date of the agreement itself. The parties have no grievance about such release. The petitioner also released and discharged further cargo though the respondent failed to make any payments. This was because upon the winding up of the sister concern of the respondent company and the appointment of the receiver the petitioner's vessel was arrested by the third party. To release the vessel from arrest, the petitioner released the cargo of the third party. 22. It is wonderous how the respondent company can take exception to such act. The payment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount guaranteed and confirmed by it. That shows nothing other than a default on the part of the respondent company. Had the respondent company applied for the permission and was not granted the permission or refused the permission by the RBI, its contract of guarantee would have stood frustrated by the act of the RBI. The respondent cannot benefit from its own wrong. It is not possible to accept the contention of the respondent that it could never have performed the obligation under the agreement in view of prohibition under the notification, in the absence of making any application to the RBI because the petitioner acted under the agreement by releasing a part of the cargo upon the confirmation contained in the agreement itself. It is, therefore, rightly argued that the petitioner acted to its own detriment. After having a part of the cargo released upon the confirmation of the agreement dated 18.7.2012, it is not only an act lacking in bonafides but a dishonest act to claim that the respondent company neither applied for RBI permission nor made payment and was discharged from its liability from making payment altogether. The contention that the guarantee was not enforceable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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