TMI Blog2013 (4) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.10 lakhs per month for one year commencing from April 10, 2013 and thereafter on the 10th day of the succeeding month. For the next financial year Maheshwari would pay Rs.12.5 lakhs per month on the date fixed as above. In the third financial year Maheshwari would pay Rs.15 lakhs per month until the entire dues are cleared off but if, any dues are still outstanding, that would be paid in four equal monthly installments payable on the date fixed as above. The payment of interest at the contractual rate would be at the yearly rest and be paid on the reducing claim. Frozen amount as on the date of the foregoing order would be taken as a principal sum and would be cleared off first and the subsequent interest component would be paid thereafter. So long the installments are paid off the winding up petition would remain permanently stayed. In default of payment of anyone installment this order would stand recalled and the parties would be at liberty to proceed before the learned company Judge. - A.P.O. No. 457 of 2012,C. P. No. 560 of 2011 - - - Dated:- 13-3-2013 - Ashim Kumar Banerjee And Dr. Mrinal Kanti Chaudhuri,JJ. For the Appellant : Mr. Abhrajit Mitra, Advocate,Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim secured through the Bombay proceeding. They were pursuing their remedy in arbitration. Hence, this winding up petition should not be allowed and the company Court should not exercise discretion in favour of Tata admitting the winding up petition. A group of winding up petitions came up for hearing before the learned Company Judge. The group had a common issue as to whether the secured creditors could file the petition for winding up and if so, what would be the role of the company Court in the matter of admission of the winding up proceeding? The learned Single Judge heard the learned Counsel for the parties in those proceeding. We were also told, subsequently most of the petitions were withdrawn and/or not pressed barring two or three. Two judgements were delivered on the same day being October 12, 2012, one being the decision in the present case and the other in the matter of Kotak Mahindra Bank Limited and Eastern Spining Mills Industries Limited (CP No. 493 of 2011). In the case of Kotak Mahindra, the learned Judge dismissed the winding up petition whereas in case of Maheshwari His Lordship admitted the same. In both cases, the aggrieved parties approached us in app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of the winding up proceeding. ii) The petitioner Tata Capital already pursued their remedy before the arbitration Court at Bombay. They obtained appropriate protection from the Bombay High Court. The appellant accepted such position hence, subsequent proceeding on the self-same issue was nothing but an abuse of process. To support his contention Mr. Chowdhury relied on four decisions: i) Manipal Finance Corporation Ltd. Vs. CRC Carrier Ltd. reported in 107 Company Cases page-288. ii) Pradeshiya Industrial Investment Corporation of U.P Vs. North India Petrochemical Ltd. and Anr. reported in 79 Company Cases page-835. iii) State Trading Corporation of India Ltd. Vs. Punjab Tanneries Ltd. reported in 66 Company Cases page- 634. iv) Raman Tech. and Process Engg. Company and Anr. Vs. Solanki Traders reported in 2008 volume- II Supreme Court Cases page-302 Mr. Tilak Bose learned Senior Counsel appearing for Tata focused on the confirmation of the accounts appearing at pages 109-111 of the paper book. Mr. Bose also referred to the statutory notice of demand that was not replied to. Hence, the presumption of inability to pay, was established. He referred to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, it was not clear whether the decision was rendered before or after the admission of the winding up proceeding. In the case of Pradeshiya Industrial Investment Corporation of U.P (supra), the Apex Court considered the precedents on the issue and relied upon the age old decision in the case of Madhusudan Gordhandas Co. Vs. Madhu Woollen Industries (P) Ltd. reported in 1971 Volume-III Supreme Court Cases page-632 as also the decision in the case of Amalgamated Commercial Private Limited reported in 35 Company Cases page456 and observed, the machinery for winding up should not be allowed to utilize merely as a means for realizing its debts due from a company. This decision was subsequently considered in the case of Manipal Finance Corporation Ltd (supra). The learned Judge held, the pressure tactics adopted by the petitioning creditor was nothing but a sheer abuse of process of law. However, in the said case the learned Judge also expressed doubt about the payability of the claim. In the case of Ravi Cement Product Ltd. Vs. Kankani Construction Pvt. Ltd. reported in 2013 volume- I Calcutta High Court Notes page-278 the Division Bench, in which one of us (Ashim Kumar Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding up petition. ii) A secured creditor is also creditor to maintain winding up petition. iii) A creditor should have the claim for Rs.500 and above. iv) He would serve the notice of demand, that demand, if unattended and /or unsatisfied, would permit the creditor to claim deemed insolvency v) The creditor would maintain the winding up petition on the ground of inability to pay. vi) He would have to prove, it is otherwise just and equitable that the company should be wound up. ..A creditor who has unpaid dues could only be reasonably satisfied if company has means to pay. When the creditor serves the notice upon the company asking them to pay off the dues the company has option either to pay off or dispute the same. Even if the company has means to pay and does not pay without any reasonable cause it would be liable to be wound up. However, this question may not be relevant here as the record shows, the company was in involved circumstances due to its precarious financial condition. In our view, His Lordship should have admitted the winding up petition and directed advertisement of notice making the said proceeding a representative action. .If we go by His ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He would not like to be content with the affidavit of Mundras as submitted before the Bombay High Court. He would want Maheshwari to sign post dated cheques to be countersigned by the bankers assuring payment on the dates mentioned therein. In short, he would require a complete assurance for repayment so as to say, he wanted to be a secured creditor being adequately protected. Winding up is a discretionary remedy. The Court has a wide discretion. Even if a claim is an admitted one, the order of admission is not a matter of course. Court would still retain its discretion under Section 443 of the said Act of 1956 that would empower the Court to pass appropriate order that would be just in the facts and circumstances of the case. Coming back to the present scenario, we do not find any dispute to the ascertained/ claim of the creditor. The company also could not make any positive effort on that score. However, the Court should use its discretion judiciously. Order of winding up is virtually a death nail on the coffin of the company who was otherwise in precarious condition. Before sending it to liquidation, the Court would still try to find out the scope of revival, if any. After the ..... 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