TMI Blog2013 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ch they are kept. He may also seek the assistance of a valuer to value the assets. He is permitted to take the assistance of the local police authorities, if required. Publication of the citation of the petition be effected in the Official Gazette, 'The Times of India' (English) and 'Jansatta' (Hindi), cost of publication shall be borne by IFL. The Directors of KIPL are directed to strictly comply with the requirements of Section 454 of the Companies Act, 1956 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 the order & also file affidavits in this Court, with advance copies to the OL, within four weeks thereafter setting out the details of all the assets, both movable and immovable of KIPL However, this order is kept in abeyance for eight weeks to enable KIPL to make payment of the sum as set out in the petition, failing which this order will be made operational and further steps will be taken by the OL in terms of this order. - CO.PET. 471 of 2011 - - - Dated:- 7-5-2013 - S. Muralidhar, J. For the Appellant : Ms. Anjali Sharma. For the Respondent : Aarohi Bhalla. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of debts dated 16th February 2010 issued by KIPL and counter-signed by KRIL. This was accepted by KRIL by a separate letter dated 17th February 2010 written to IFL. 4. In terms of factoring agreement, the 'Approved Debtor' was Koutons Retail India Ltd. ('KRIL') with a funds-in-use ('FIU') limit of Rs. 4,00,00,000. KIPL was described as 'Client'. IFL was described as 'Factor'. Under Clause 3 of the factoring agreement, the expression 'recourse' was defined as "The right of the Factor to require the Client to repurchase a notified receivable at a price equal to the amount remaining unpaid by the Debtor in respect thereof." Clause 9 of the factoring agreement spelt out warranties and undertakings by the 'Client', i.e. KIPL. Clause 11 dealt with 'recourse and set-off'. Clause 14 of the Schedule to the factoring agreement noted that recourse to the Client will be automatic on the expiry of thirty days from the due date of payment by the Debtor, or earlier, as advised by IFL for each debtor from time to time. Clause 19 of the Schedule specifies the documents which have to be furnished and these include "security cheques for facility amount along with stamped letter of undertaking." 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying all outstanding amounts to IFL. Reliance is placed on the letter of undertaking dated 17th February 2010 executed by KRIL in favour of IFL. Secondly, it is submitted that inasmuch as IFL has filed a separate winding up petition, being Co. Pet. No. 329 of 2011, against KRIL for non-realisation of debts, the present petition is not maintainable as "two companies cannot be wound up for non-payment of the same amount." Thirdly, it is contended that the cheques issued by KIPL, which were dishonoured, were issued by way of security and not by way of acknowledgment of liability. It is submitted that IFL has purchased the receivables for consideration from KIPL and, therefore, KRIL continues to be the principal debtor from which the amount needs to be recovered. It is submitted that KIPL had, while selling receivables to IFL paid discount charges at 13.5% p.a. along with 0.20% of the total invoices factored on the Approved Debtor and 0.75% of the prepayment limit. It is stated that if the commercial decision taken by IFL has gone wrong then the only party from whom the debts could be recovered was KRIL. 9. By an order dated 13th July 2012, this Court restrained KIPL, its directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for KIPL, Mr. Aarohi Bhalla, learned advocate submitted that IFL had instituted criminal complaints against KRIL for dishonour of cheques to the extent of Rs. 180 lacs, although the total outstanding amount was Rs. 517 lacs. Therefore, IFL ought to explain whether it had actually received the payment of Rs. 337 lacs, and if it had not, as to why it would not proceed against KRIL for recovering the said amount. He submitted that the inference was that IFL had received some amount from KRIL, which it was not willing to disclose. In the circumstances, there was no clarity regarding the amount claimed by IFL. Secondly, he submitted that there was no question of admission of liability by KIPL. The mere fact that certain letters were written by KIPL to IFL did not mean that they had admitted the entire liability. He pointed out that the factoring arrangement was not a bill discounting arrangement. It was KRIL which had defaulted in making the payment and not KIPL. He pointed out that KIPL had, on its own, paid IFL in excess of Rs. 1,50,40,065 and, therefore, it could not be said that KIPL was either unwilling or unable to make payment. He submitted that the winding up proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a substantial one and not a mere moonshine, then the winding up proceedings would not lie. The principles were reiterated in Vijay Industries v. NATL Technologies Ltd. [2009] 89 SCL 205 (SC). 17.1 In IBA Health (India) (P.) Ltd. case (supra) which has been relied upon by both the parties, the facts 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 acknowledgement 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 grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained. In that context, in para 33 of the judgment, it was observed as under: "33. .... A party to the dispute should not be allowed to use the threat of winding up petition as a means of enforcing the company to pay a bona fide disputed debt. A Company Court cannot be reduced as a debt collecting agency or as a means of bringing improper pressure on the company to pay a bona fide disputed debt. Of late, we have seen several instances where the jurisdiction of the Company Court is being abused by filing winding-up petitions to pressurise the companies to pay the debts which are substantially disputed and the courts are very casual in issuing notices and ordering publication in the newspapers which may attract adverse publicity. Remember, an action may lie in appropriate court in respect of the injury to reputation caused by maliciously and unreasonably commencing liquidation proceedings against a company and later dismissed when a proper defence is made out on substantial grounds. A creditor's winding-up petition implies insolvency and is likely to damage the company's creditworthiness or its financial standing with its creditors or customers an even among the public." 18. Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven in the letter dated 12th August 2011, a further undertaking was given by KIPL to IFL stating that "We undertake to make arrangements to pay you additional amount of Rs. 5,00,000 vide cheque No.057394 dated 12.08.2011 and Rs. 5,00,000 vide cheque no. 057395 dated 31.08.2011. Further, we will take care of our dues by November 2011 by selling the goods which we are going to release from the port. We understand your difficult situation, but kindly also bear in mind our position caused due to default of M/s. Koutons Retail who actually owes this amount." 20. After the above repeated assurances given by KIPL to IFL consistent with its obligations under the factoring agreement, it is futile for KIPL to contend either that there is no admitted liability of KIPL or deny its inability to make payment of the admitted liability. There is also no denial of the fact that the cheques issued by KIPL to IFL were on presentation dishonoured. That has resulted in IFL instituting proceedings against KIPL under the NI Act. This constitutes both an admission of liability by KIPL and its inability to make payment. On the facts of the present case, the decision in IBA Health (India) (P.) Ltd. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
