9911796707
TMI Blog2004 (10) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed as 675.000 T.P.A. Plant with 60 M.W. Power Plant. The appellant company had accepted the offer of the respondent and had issued a Letter of Intent dated 17-6-1997, in favour of the present respondent in the following terms:- "We are pleased to issue a letter of intent for executing the pile foundations as per your offer dated 13-3-1997, for the 675.000 TPA Coke Plant with 60 MW Power Plant for Rs. 9.75 crores. The detailed L.O.I. Indicating the BOQ and terms and conditions will be sent to you after finalization of design and drawings with M/s. Raytheon Engineers and Constructions and after Government approvals. You are requested to remit Earnest Money Deposit amounting to 1 per cent of the contract value by Demand Draft. This amount will be refunded back in the event of the non-execution of the Project." 3. Thus the value of the work was fixed for Rs. 9.75 crores and the respondent was required to remit Earnest Money Deposit (hereinafter referred to as EMD for brevity) amounting to 1 per cent of the contract value by demand draft. Consequently, the respondent had furnished the EMD for the sum of Rs. 9,75,000 on 24th June, 1997 by demand draft. 4. The appellant company, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are determinedly following through on the project. There has been some delays by about an year due reasons beyond our control. I am pleased to inform you that the entire debt funding for the project has been agreed to. The primary lenders to the project are IFC, Washington who were willing to take up 20 per cent stake in the project cost. We are responsibly confident that due diligence by the lenders to the project will start by the end of the year 2002. Meanwhile, we are trying to sell about 60 acres of land which is surplus to our requirement. We wish to return the EMD from the proceeds of the land sale. We put up on record our great appreciation for your patience and support in helping us putting this exciting project together." 9. Matters, however, do not appear to have ended here and the appellant miserably failed to address the issue of return of the EMD despite its admissions and commitment. Consequently, the respondent was constrained to get issued a legal notice dated 4th March, 2003 calling upon the respondent to pay the notice demand which included the EMD as well as interest. 10. In its reply on 17th March, 2003, however, after a lapse of almost six years from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sman' (English) 'Jan Satta' (Hindi) as well as Delhi Gazette, returnable on 16th November, 2004. The question of propriety of appointment of the Provisional Liquidator was also postponed upon occurrence of the aforestated eventuality. 15. This judgment has been impugned before us principally on the contention that the matter related to examination of the terms of the contract and there was no debt which remained unpaid, which would have entitled invocation of the powers of the Company Court under section 433 on the grounds of applicability of section 433(e) of the Companies Act, 1956. It has been vehemently contended that the learned Company Judge has fallen into error inasmuch as according to the appellant the 'zero date', as agreed to and understood by the parties, was yet to arrive and as such there was no occasion for the appellant company to be owing any amount to the respondent. It has been contended that for this reason, it was not possible to hold that in the instant case the appellant company was unable to pay its debt. 16. We have heard learned counsel appearing for the appellant who has submitted that all records necessary for adjudication of the matters in issue, are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t:- "We are trying to sell about 60 acres of land which is surplus to our requirement. We wish to return the EMD from the proceeds of the land sold." 19. Therefore, the stand taken in the reply to the notice and in the present appeal is dishonest at the face of it. 20. There is no bona fide dispute in the defence urged on behalf of the appellant and there is no reasonable excuse for not paying the damage and acknowledged debt to the respondent. As the demand was duly made and has not been met by the appellant, no other conclusion can be arrived at other than that the appellant is unable to pay its debt within the meaning of section 433(e) of the Companies Act, 1956. 21. In these circumstances, we are unable to agree with the appellant that the respondent was resiling any contractual commitment. 22. The appellant company would want us to ignore its admissions about its inability to discharge its obligation. The appellant company has duly admitted its liability in the communications dated 20-8-1988, 25-10-1998,1st August, 2001 especially and also its promise in its letter dated 28th September, 2002 to return the EMD payable to the respondent from the proceeds of the land as well ..... X X X X Extracts X X X X X X X X Extracts X X X X
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