TMI Blog2011 (3) TMI 1457X X X X Extracts X X X X X X X X Extracts X X X X ..... irm is entitled to ignore the principal debtor and seek payment from the surety and it is not open to the surety to ask the firm to first exhaust his remedy against the firm and then come to him. respondent owes a debt to the petitioner which it has defaulted in paying. Moreover, the defence set up by respondent is a moonshine and a sham. petitioner’s application allowed - COMPANY PETITION NO. 248 OF 2009 AND COMPANY APPLICATION NOS. 767 OF 2009 & 1889 OF 2010 - - - Dated:- 4-3-2011 - MANMOHAN, J. Vijay K. Singh for the Petitioner. Amit S. Chadha, Sandeep Khurana, Dinesh Rastogi for the Respondent. Ms. Manisha and Srinjoy Banerjee for the RBI. JUDGMENT 1. The present petition has been filed under section 433( e ) read with section 434 of the Companies Act, 1956 ( the Act ) for winding up of the respondent-company. 2. The relevant facts of the present case are that the petitioner is a company incorporated under the laws of Czech Republic. It owns 100 per cent equity shares in another Czech Republic company, namely, SP of W, a.s. 3. On 15-3-2007, petitioner-company executed a Stock Purchase and Sale Agreement ( Agreement ) with M/s. Newco Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the executive Mr. Ing. Miloslav Soldathereinafter the Seller that : 1.It has been acquainted with the obligation of the company NEWCO PRAGUE s.r.o. with registered office at Litynow-Janovg Pratelsyi 81, postal code: 435 42, Czech Republic, which ensues from the Stock Purchase and Sale Agreement concluded on 15-3-2007 between N S N Consultants s.r.o., as the Seller and NEWCO PRAGUE as the Purchaser under the terms of which NEWCO PRAGUE s.r.o. is obliged to pay the Seller a purchase price for the shares transferred of CZK 230,000,000 (to wit: two hundred and thirty million Czech crowns) by 30-4-2009 at the latest. 2.It hereby assumes the duty to pay the Seller specified above for the claim ensuring from the Stock Purchase and Sale Agreement of 15-3-2007 a maximum amount of CZK 230,000,000 (to wit: two hundred and thirty million Czech crowns) on the condition that the claim or part thereof specified hereinabove is not satisfied by the Purchaser within the deadline agreed on nor within a reasonable additional deadline specified in the written request sent by the Seller for payment of a particular instalment. 3.The Guarantor undertakes to satisfy the claim of the Sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laration. He also lays emphasis on the fact that the Guarantee Declaration did not bear stamp or seal of the respondent-company. He also points out that Mr. Ravi Chilikuri at the relevant time was neither a director nor a shareholder of respondent-company. 9. Mr. Amit S. Chadha also refers to the Board Resolution dated 2-3-2007 to show that respondent-company in a bid to maintain check and balance and to avoid misuse of power by any one person had delegated authority jointly to two persons. 10. In the alternative, Mr. Chadha submits that the aforesaid Guaranty Declaration is null and void as no mandatory permission has been obtained from the relevant statutory authorities either under Foreign Exchange Management Act, 1999 ( FEMA ) or Foreign Exchange Regulation Act, 1973 ( FERA ). 11. Mr. Chadha lastly submits that the winding up notice dated 1-5-2009 is premature inasmuch as the said notice has been issued on the same date petitioner has made a demand from the Purchaser and that too, when the Purchaser had time to make payment till 3-6-2009. Consequently, according to Mr. Chadha, the statutory notice under sections 433 and 434 of the Act could have been sent by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Guarantee. The Purchaser shall procure the irrevocable Corporate Guarantee issued by the company SRM Exploration Private Limited, headquartered at D-146, Saket, New Delhi-110 017, India in favour of the Seller for the aggregate amount of the Purchase Price, i.e., the amount of 230,000,000,-CZK (two hundred thirty million Czech Crowns) (hereinafter the "Corporate Guarantee"). The Corporate Guarantee in the wording as enclosed as Schedule 3 of this Agreement will be issued before the Signing date and handed over to the Seller against the hand-over of the Shares of the Company as described in section 3.4 of this Article. 3.2.2. Promissory Notes. The Purchaser shall issue the Promissory Notes in the amounts of the particular instalments of the purchase price in order to the Seller provided with aval of the company SRM Exploration Private Limited, headquartered at D-146, Saket, New Delhi-110 017, India. The Promissory Notes will be deposited by into the deed-box at Komereni banka a.s., subsidiary Benesov and handed over to the Seller according to the terms of the Escrow Agreement concluded between the contracting Parties and JUDr. Miloslav JINdrich, notary acting as a tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of instalments. The petitioner also reminded the respondent of its obligations under the Guaranty Declaration. 19. I also find that the petitioner through its lawyers also sent a letter dated 14-4-2009 demanding payment of unpaid instalment amounting to CZK 215,375,000. However, as the respondent did not make the payment in terms of the Guaranty Declaration, the petitioner, through its Advocates, issued a statutory winding up notice dated 1-5-2009 calling upon the respondent to make payment within three weeks. Consequently, neither the winding up notice nor the present petition is premature. 20. If the said Guaranty Declaration has been executed by the respondent in breach of any provisions of FEMA or FERA, the respondent can be prosecuted for the same. But, in my opinion, it cannot be said that the Guaranty is null and void or cannot be enforced on this ground. 21. I am further of the opinion that the Guaranty Declaration executed by the respondent is a contract enforceable under law. It is not the case of the respondent that the Guaranty Declaration is executed under coercion, undue influence, fraud and/or misrepresentation. The other defence that the board reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of admission. Regarding the second point, I have already pointed out that the petitioner has alleged that it has sent repeatedly notices of demand to the mills and the company and that this allegation remains uncontroverted. So far as the third point is concerned, it is well settled that mere forbearance on the part of the creditor to sue the principal debtor will not discharge the surety. In regard to this plea, Sri Bhatt referred to a term of the guarantee deed which is in the following terms : Any alteration of the terms of repayment or other consideration given by the beneficiaries to the company shall not be considered to act in any manner prejudicial to the right or interest of the guarantors and this guarantee shall have full force notwithstanding any such consideration or alteration of the terms aforesaid. 18. This clause is no doubt of limited scope but it covers the present argument that the liabilities of the surety is discharged because of the consideration given by the firm to the mills in the sense of the postponement of action by the firm against the mills. According to the petitioner, the financial position of the mills is none too good and it will be impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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