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2013 (10) TMI 452 - BOMBAY HIGH COURTWinding up petition - recovery of debt - it was contended that respondent failed to Create a mortgage of the residential flat by deposit of title deeds - Convert the bonds into equity shares despite the exercise of option by the Appellant. Consequently, in terms of the letter of restructuring, more particularly Clause 11, the entire debt due under the facility became payable and was recalled by the Appellant. - Single Judge bench rejected winding up application - Held that:- once the Respondent committed a default in complying with the terms and conditions of the letter of sanction, the Appellant was justified in recalling the amount due under the facility. The amount became due and payable on default. There is clearly a debt due and payable which fulfils the mandatory institution of a proceeding for winding up. An effort was made to mislead the Company Judge by filing before the learned Single Judge in Annexure 6, a typed statement that would seem to suggest that collateral security to secure the amount of Rs.3.50 crores was created in respect of three residential properties. As a matter of fact, it is not disputed at the hearing that the title deeds were not deposited with the Appellant. An equitable mortgage cannot be created without the deposit of title deeds and merely on a typed statement. The petition for winding up shall stand admitted and there shall be consequential orders in usual terms for the issuance of an advertisement and publication.
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