TMI Blog2009 (9) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Kant, J.,- This petition under sections 433( e ), ( f ), 434 and 439 of the Companies Act, 1956, filed by the ICICI Bank Ltd., seeks winding up of the respondent-company-M/s. Saurav Chemicals Ltd. 2. While the petitioner is a public financial institution, the respondent-company was incorporated on 20-12-1993, under the provisions of the Companies Act, 1956 ( the Act ) with its registered office within the territorial jurisdiction of this Court. The authorised equity share capital of the respondent-company is Rs. 2 lakhs divided into 20,000 equity shares of Rs. 10 each. The company has been incorporated to carry on the business as distributor/retailer/exporter and importer of all kinds of industrial organic as well as inorganic-chemicals, other consumable chemicals as well as the manufacture of industrial chemicals like detergent powders, cleaning powder, acid slurry, liquid soap, and allied industrial chemicals. 3. The petitioner-bank has averred that it executed an International Swaps and Derivatives Association ( ISDA ) master agreement along with Schedule thereto with the respondent-company on 17-7-2005, for the purpose of transacting in forward contracts and other d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outstanding payment to the petitioner-bank. A notice for winding up was served vide registered letter dated 7-10-2006, but the respondent-company vide its reply dated 4-11-2006, has denied its liability allegedly on wholly flimsy and untenable grounds. According to the petitioner-bank, the respondent-company is liable to pay its lawful debts amounting to Rs. 34,24,437 as on 7-8-2006, along with interest at the floating rate/ICICI Bank Benchmark advance rate plus 8 per cent till the date of payment and its non-failure amounts to its inability to pay the lawful debts warranting action of the winding up. 5. The respondent-company has filed its written statement, inter alia, raising preliminary objections that ( i ) the ISDA agreement was void ab initio ; ( ii ) the issues raised in this petition are disputed questions of fact for which a winding up petition is not maintainable; ( iii ) the ISDA agreement contemplates certain obligations and duties of the petitioner-bank including specified information to be given to the customers and in the event of any misrepresentation or non-supply of the specified information, the parties had a right to terminate the contract but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the creditor of the company is returned unsatisfied or if the Court is satisfied that the company is unable to pay its debts. It may be seen that where the company makes a default in payment of the due amount to the creditor despite notice served through a registered post, an order of winding up can be passed irrespective of the fact whether the company is in a position to pay or not. Similarly, such an order can also be passed when the company does not have sufficient means to discharge its debt liability or a Court decree passed against it remains unexecutable. In other words, the acknowledgement of debt and inability to pay the debts by the company are sine qua non for the court to invoke the winding up jurisdiction under section 433( e ) and ( f ), read with section 434, of the Act. It is equally well-settled that where there is a bona fide dispute over liability between the claimant/creditors and the company which involves serious contest on questions of facts, the winding up petition cannot be entertained as a tool of arm twisting, especially when the financial condition of the company sought to be wound up does not warrant such a punitive action in public interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of section 4( b ) for such party which will be the affected party) : (1)to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such transaction or to comply with any other material provision of this agreement relating to such transaction ; or (2)to perform or for any credit support provider of such party to perform, any contingent or other obligation which the party (or such credit support provider) has under any credit support document relating to such transaction ; ( ii ) Credit event upon merger. If credit event upon merger is specified in the Schedule as applying to the party, such party ("X"), any credit support provider of X or any applicable specified entity of X consolidates or amalgamates with, or merges with or into, or transfer all or substantially all its assets to, another entity and such action does not constitute an event described in section 5( a )( viii ) but the credit-worthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such credit sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing effect : "This is in reference to the subject mentioned above regarding the agreement of swap deal between USD/CHF. We had done swap deal for USD 43.5350 and CHF 1.2735 for principal amount of Rs. 6.40 crores. For the last three months we are following your representative of this region for getting the status of this deal. Every time an assurance is given that they are sending by mail or faxing it but till date we have not received even a single confirmation from your side. It is highly disappointing factor that we are not getting the data after assurances given by Mr. Harpreet Gilliani, Regional Head. As you know that it is projected that rupee and CHF will depreciate in the coming months. We request you to please cancel our deal and the company is not responsible for any financial loss to ICICI Bank . Please treat this letter on a priority basis and if any information or document is required by you we will be pleased to provide you the same." [Emphasis supplied] 12. The company had, thus, accused the petitioner-bank of not performing its part of the contractual obligation and self-responsible for suffering the financial loss, if any. The letter demanded cancellatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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