2015 (6) TMI 902 - HC - Companies Law

Application for winding up - Non refund of non interest Bearing Maintenance Security (IBMS) - Direction to deposit the entire amount as a pre-condition to deal with its movable and immovable assets in the ordinary course of business - Held that - On a consideration of the entirety of the matter as well as the documents filed by the parties which have been placed before us it was the responsibility of the appellant to place the amounts collected towards (IBMS) from the apartment owners in a separate account. Even before us the appellant does not dispute receipt of this amount from the apartment owners. A reading of the affidavit filed by the appellant would show that the entire amount collected towards IBMS has been utilised by it. The nature of the utilisation however is not disclosed. It is also not known whether the amount has been utilised for the purpose or in the manner required in the flat buyers agreement. The respondent has also absolutely refuted the liability of any dues at all. - Calling upon the appellant to secure the amount is clearly justified and cannot be assailed on any legally tenable grounds. However the appellant pleads financial difficulty in making a lump sum deposit. The amount can be secured by other conditions as well to mitigate this expressed difficulty.

Summary

Issues Involved:
Delay in filing appeal, Winding up petition under Companies Act, 1956, Maintenance and responsibilities in housing complex, Utilization of funds collected, Order to deposit amount as pre-condition, Financial difficulty in making lump sum deposit, Resolution through mediation.

Analysis:
1. Delay in filing appeal: The delay in filing the appeal was condoned after being heard, allowing the appeal to proceed.

2. Winding up petition under Companies Act, 1956: The respondent, an association of apartment owners, filed a petition seeking winding up of the appellant due to non-handover of funds collected towards Interest Bearing Maintenance Security (IBMS) as per flat buyer agreements. The appellant, a subsidiary of M/s Unitech Ltd., was responsible for construction in the housing complex.

3. Maintenance and responsibilities in housing complex: The appellant was alleged to have not handed over the collected IBMS funds to the association for maintenance, leading to the necessity of a winding up petition.

4. Utilization of funds collected: The appellant admitted receiving the IBMS funds but utilized them without maintaining a separate account, raising concerns about breach of trust and mismanagement.

5. Order to deposit amount as pre-condition: The learned Single Judge directed the appellant to deposit the entire IBMS amount with interest as a pre-condition to selling or alienating assets, which was challenged by the appellant citing financial difficulties.

6. Financial difficulty in making lump sum deposit: The appellant pleaded financial difficulty in making a lump sum deposit, leading to the court modifying the order by allowing installment payments and additional security to mitigate the financial burden.

7. Resolution through mediation: The parties were directed to explore an amicable resolution through mediation, emphasizing the importance of resolving the dispute outside of court proceedings.

This detailed analysis covers the various legal issues addressed in the judgment, highlighting the key aspects of the case and the court's decisions on each issue.