TMI Blog2013 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Publication of the citation of the petition be effected in the Official Gazette, ‘The Times of India’ (English) and ‘Jansatta’ (Hindi). The cost of publication shall be borne by IFL. The Directors of KRIL are directed to strictly comply with the requirements of Section 454 and Rule 130 and furnish to the OL a statement of affairs in the prescribed form verified by an affidavit within a period of 21 days from the date of order. However, this order is kept in abeyance for eight weeks to enable KRIL to make payment to IFL of the sum of Rs. 1,80,21,139 together with up-to date interest, failing which this order will be made operational and further steps will be taken by the OL in terms of this order. The right of IFL to seek other available remedies to recover the balance sum owed to it by KRIL is reserved. - CO. PETITION NO. 329 OF 2011 - - - Dated:- 13-5-2013 - S. Muralidhar, J. For the Appellant : Ms. Anjali Sharma. For the Respondent : Ms. Maneesha Dhir, Ms.Priyanka, Karan Khanna and Ms. Asmita Kumar. ORDER:- IFCI Factors Ltd. ( IFL ) has filed this petition under Section 439 read with Sections 433(e) of the Companies Act, 1956 ( Act ) seeking the winding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IL also issued PDCs in its favour. Three of the PDCs dated 14th, 15th and 17th May 2010 for Rs. 41,60,023, Rs. 41,51,316 and Rs. 47,09,800 respectively, when presented by IFL for payment, were dishonoured with the remarks insufficient funds . It is stated that cheques to the extent of Rs. 1.80 crores issued by KRIL in favour of IFL were upon presentation dishonoured for the same reason. Copies of the dishonoured cheques and the advice from the bank regarding the dishonoured cheques have been enclosed with the petition. 5. The case of IFL is that both the Approved Debtor, KRIL, as well as KIPL committed defaults. It is stated that as on the date of the petition, KRIL owed IFL a sum of Rs. 3,33,18,783.88. It is stated that despite notice dated 30th November 2010 issued by registered post to KRIL there has been no response from KRIL. Accordingly, the present petition was filed on 3 rd August 2011. 6. Pursuant to the notice issued in the petition on 4th August 2011, KRIL entered an appearance on 24th November 2011 and was asked to file a reply within a period of six weeks. However, despite several opportunities no reply was filed. Company Application No. 2014 of 2012 was thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd by any contract between IFL and KIPL much less by the conditionalities in the Schedule II to the said agreement. In any event these were triable issues which ought not to be decided in a winding up petition. Thirdly, it is submitted that notice dated 30th November 2010 issued by learned counsel for IFL to KRIL was a notice under Section 138 of the Negotiable Instruments Act, 1881 ( NI Act ) and not a notice seeking winding up under Sections 433 (3) and 434 of the Act. In the absence of any such legal notice no winding up proceeding can be entertained. Fourthly, it is contended that even the said notice was not sent to the KRIL at its registered office and this is another ground on which the petition should be dismissed. Fifthly, it is submitted that the complaint under Section 138 NI Act filed by IFL was only to the extent of cheques for Rs. 1.80 crores being dishonoured. On the other hand the legal notice demanded payment of over Rs. 3.33 crores. It is submitted that there is neither any admission of liability by KRIL. It is submitted that there cannot be winding up of two companies for the same amount. Reliance is placed on the decisions in State Black Sea Shipping Company M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the said decision the Court noted its earlier decision in Kalra Iron Stores v. Faridabad Fabricators (P) Ltd. (1992) 1 Comp. L.J. 310 which drew a distinction between a petition under Sections 433 (e) read with Section 434 (1) (a) and one under Section 433 (e) read with Section 434 (1) (c) of the Act. It was observed that there cannot be a dispute with regard to the proposition that without even serving a notice as required under Section 434 (1) (a) a creditor can seek for winding up of a company under Section 433 (e) read with Section 434 (1) (c) of the Act on the ground that the company is unable to pay its debts. It was further explained as under: In order to bring a case within the ambit of Section 434 (1) (c) of the Act, the creditor has to prove to the satisfaction of the court that the company is unable to pay its debts, and in determining whether a company is unable to pay its debts the court should take into account the contingent and prospective liability of the company. The purpose of Section 434 (1) (c) read with Section 434 (e) is to determine the basic question of commercial solvency of the company and in determining the aforesaid question the court has to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts were that a settlement was entered into between the creditor and the company in certain proceedings before the City Civil Court in Bengaluru. Thereafter, upon the company defaulting in making payment in terms of the settlement, winding up proceedings were initiated. Relying on certain clauses of the settlement deed, the Company Court admitted the petition. In appeal the company contended that it had paid the creditor a certain sum in terms of the deed of settlement, but that was not by way of an acknowledgment of liability. The Supreme Court summarised the principles as under: 23. The principles laid down in the abovementioned cases indicate that if the debt is bona fide disputed, there cannot be neglect to pay within the meaning of Section 433(1)(a) of the Companies Act, 1956. If there is no neglect, the deeming provision does not come into play and the winding up on the ground that the company is unable to pay its debts is not substantiated and non-payment of the amount of such a bona fide disputed debt cannot be termed as neglect to pay so as to incur the liability under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956. 16.2 Responding to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the power attorney executed in favour of the deponent of the affidavit authorizes him to sign and execute on behalf of IFL all legal documents, instruments, guarantees and agreements which are required to be executed for and on behalf of IFL in connection with the current and authorized business of IFL and also sign and verify on behalf of IFCI Factors Ltd. plaints, application, petitions, written statements, affidavits, vakalatnamas and all other documents connected with the legal proceedings that are required to be signed and verified on behalf of IFCI Factors Ltd. The above POA is widely worded and would include an authorization for filing a winding up petition. The decision of the Bombay High Court in Shantilal Khusaldas and Bros. Pvt. Ltd. is distinguishable on facts. 20. In the circumstances, this Court is satisfied that in the present case there is an admission of liability by KRIL in the sum of Rs. 1,80,21,139 together with interest and that KRIL is unable to pay the said sum to IFL. The defence of KRIL for not paying IFL the admitted liability is not bona fide. 21. The petition is accordingly admitted and the OL attached to this Court is appointed as a PL of KR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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