TMI Blog2013 (8) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 454 of the Act and Rule 130 of the Rules and furnish to the OL a statement of affairs in the prescribed form verified by an affidavit within a period of 21 days from when the order becomes operational - They will also file affidavits in the Court, with advance copies to the OL, within four weeks setting out the details of all the assets, both movable and immovable and enclose therewith the balance sheets, profit and loss accounts and copies of the statements of all the bank accounts for the last three years. - CO.PET. No. 395 of 2012 & CO. APPL Nos. 454&455 of 2013 - - - Dated:- 25-4-2013 - S. Muralidhar, J. For the Appellant : Neeraj Kishan Kaul, Rajendra Barot and Gaurav Kothari. For the Respondent : G.L. Rawal, Kuljeet Rawal, Himanshu Singh and H.S. Bedi. Co. Pet. No. 395 of 2012 was filed by the Petitioner, Australia and New Zealand Banking Group Ltd. ('ANZ'), under Section 433(e) and (f)read with Sections 434 and 439 of the Companies Act, 1956 ('Act') seeking the winding up of Tulip Telecom Ltd. ('TTL'), on the ground that TTL was unable to pay its debts. 2. Pursuant to a facility agreement dated 3rd August 2011, ANZ sanctioned TTL a working capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he accepts notice. Complete set of paper book has been furnished. Learned counsel for the respondent under instructions from his client states that a sum of Rs. 8 crores would be paid within two weeks from today and another sum of Rs.2 crores will positively be paid within 10 days thereafter. The proposal for paying the balance amount in a time bound frame shall be placed before the Court on the next date. In case the undertaking so given before this Court is not honoured, learned counsel for the petitioner states that he would press for orders on his application for interim relief. Counsel for the petitioner further points out that the respondent has committed default qua other creditors also and he wishes to bring this fact on record; additional affidavit is permitted to be filed by the petitioner within a period of one week from today. Renotify on 18.09.2012." 5. On 18th September 2012, the following order was passed: "Learned counsel for the petitioner points out that the undertaking given by the respondent in terms of the last order has not been complied as the cheque issued by the respondent stood dishonoured. Learned counsel for the respondent undertaking on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avy and he is not agreeable to this proposal and the respondent himself in the month of August had issued post dated cheques up to 07.11.2012 for complete payment and he cannot now wriggle out of this proposal. He is asking for enlargement of time which is not acceptable to the petitioner. This Court has put a proposal to the respondent which is to the effect that the entire payment be paid by the respondent to the petitioner within an outer limit of 10 months from the next date of hearing with interest at the agreed rate on the reducing balance. Learned counsel for the petitioner will also take instruction on this proposal which has been put to the respondent by the Court. Learned counsel for the respondent also seeks time to take instruction in this regard. In case this proposal does not to fructify arguments will be heard on merits. Reply if any be filed within 10 days with advance copy. List for direction on 21.11.2012." 8. Subsequent to the above hearing, when the case was listed on 21st November 2012, the Court was informed that the parties had arrived at a settlement and that the Respondent was willing to pay the balance sum along with interest at the agreed rate on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instalment. Learned counsel for the respondent states that the order was ambiguous. This is now clarified. It is made clear that the interest on the reduced balance at the agreed rate on each instalment shall be paid along with the instalment. Learned counsel for the respondent points out that the instalment of November, 2012 has since been paid; admittedly interest on the said instalment has not been paid; learned counsel for the respondent states that this interest shall be paid positively on or before 31.12.2012 and the interest falling due on the instalment of December, 2012 shall be cumulatively paid along with interest due for January, 2013 instalment. Application disposed of in the above terms. Order dasti." 10. It appears that against the order dated 21st November 2012, TTL filed an appeal, being Co. Appeal No. 5 of 2013, which was disposed of by the Division Bench ('DB') on 28th January 2013 by the following order: "Co.App. 5/2013 CM No. 1361/2013 (Stay) The impugned order dated 21.11.2012 refers to and incorporates the settlement arrived at between the parties. The appellant herein has agreed to pay a sum of Rs. 45.50 crores along with interest at the agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against TTL in which notice was directed to issue by the Court on 22nd March 2013. At that hearing, Mr. Sheetesh Khanna, Advocate accepted notice on behalf of TTL. The Court directed replies to be filed both to CA Nos. 454 and 455 of 2013 as well as CCP (Co.) No. 3 of 2013 by 10th April 2013 and rejoinder to be filed before the next date. When the matter was listed on 18th April 2013, the Court noted that no reply had been filed by TTL, and passed the following order: "1. The Court finds that despite opportunity granted on 22nd March 2013 to the Respondent in this contempt petition to file a reply on or before 10th April 2013 no reply has been filed by the Respondent till date. 2. Mr. G.L. Rawal, learned Senior counsel appearing for the Respondent prays for some more time to file a reply. 3. The Court had enquired of Mr. Rawal whether the Respondent would be willing to, as a condition for being granted more time to file a reply, and considering that this is a contempt petition arising out of the earlier orders passed by the Court on 21st November 2012, offer security in the form of unencumbered fixed assets of the Respondent for the outstanding amount of over Rs. 32 crores ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 21st November 2012 regarding appointment of the OL. Inter alia, it was stated that TTL had already made a total payment to ANZ of Rs. 20,01,68,000 and that this showed that TTL had "all bonafide to pay the amount to the petitioner." It was pointed out in para 6 of the affidavit that TTL is in the field of providing internet and data service; it is servicing to more than 5,000 customers across 200 cities on wireless and across 300 cities through 16,000 km fibre network; it has a market capitalization of over Rs. 30 billion; it has an investment of Rs. 32.8 billion partly funded and partly through operational cash flows; that 4000 families are surviving by direct employment provided by TTL while more than 6-7000 people are earning their livelihood besides providing business to TTL suppliers of raw material and services; that TTL is contributing a huge amount of direct and indirect revenue by way of taxes running into thousands of crores of rupees and that the present turnover of TTL is Rs. 2,000 crores. It was pleaded that due to severe economic crisis worldwide and adverse situation in the market, TTL took a temporary blow to its working and its market capitalization fell fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en accepted by all the major banks who have lent it Rs. 2,300 crores. It is stated that "it is advisable" that ANZ should become a "secured lender" at par with other secured lenders. In paras 20 and 21, Lt. Col. Bedi states that he was responsible for computerization of the Army Headquarters at Delhi for about three years during his service in the Army and that he was awarded the Vishisht Seva Medal for that work. He stated in para 21 that he is a law abiding citizen and respects the orders of the Court and "have taken all my best and bonafide efforts to comply with the orders, however, for the reason as above said further amounts could not be paid as CDR prohibits, respondent from making any preferential payments and now CDR is requirement for the survival of the respondent company." In the above circumstances, in para 22 of the affidavit, it was prayed that "the order dated 21.11.2012" may be modified/varied "to the extent of directions" having been issued for the appointment of the OL and further that the Court should withdraw the notice of contempt. 16. Enclosed with the affidavit is a letter dated 12th April 2013 written by Mr. Prakash Joshi, Dy. General Manager of CDR Cell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by ANZ when it was asked to participate in the CDR, but it failed to do so. The above submission was denied, on instructions, by Mr. Neeraj Kishan Kaul, learned Senior counsel for ANZ. He submitted that in any event, irrespective of whether ANZ was informed by TTL, which it was not, TTL ought to have accepted the order dated 21st November 2012, which recorded TTL's undertaking to make payment in terms of the settlement recorded in that order. 21. By way of an application dated 22nd April 2013, supported by an affidavit dated 23rd April 2013 of Lt. Col. Bedi (tendered in the Court by Mr. Rawal at the time of mentioning on 23rd April 2013) two documents were sought to be placed on record. The first is a letter dated 2ndJanuary 2013 addressed by ICICI Bank to the lenders of TTL, including ANZ, inviting them to a meeting on the CDR Scheme on 8th January 2013 at New Delhi. The second is a letter dated 10th January 2013 addressed by ICICI Bank to the lenders of TTL, including ANZ, enclosing the minutes of the meeting held on 8th January 2013. It is stated in the application that despite the said notice ANZ did not attend the meeting of the lenders. It is further stated that "as per un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded in the order dated 21st November 2012, it ought to have informed the Court, making a full disclosure of the application made by it for the CDR Scheme and sought modification in terms of the leave granted by the DB. It is not even clear whether the DB was made aware of the CDR mechanism when the appeal was heard by it. 25. An officer of TTL dealing with finance was present in the Court. He explained that the current bank balance of TTL is only Rs. 10 lakhs and that the daily income to the tune of around Rs. 60 lakhs is being utilised to pay statutory and other dues. It is plain that given the fund position, TTL would be in no position to repay its debt owing to ANZ. 26. Even according to CDR, TTL is expected to restructure the debt owing to ANZ. Till date, TTL has not even proposed any such restructuring. Mr. Rawal states that some time may be given for that purpose. He has also tendered a synopsis of submissions in which reliance is placed on the decisions in Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125 (SC), New Swadeshi Mills of Ahmedabad Ltd. v. Dye-Chem Corpn. [1986] 59 Comp. Cas. 183 (Guj), Rishi Enterprises , In re [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the parties and was in the nature of an undertaking to stand by the agreement. The consequence of the failure to do so was spelt out in the order dated 21st November 2012 itself. One was the appointment of a PL and the other the initiation of contempt proceedings against TTL. 30. The fact that there has been disobedience by TTL of the above order is plain. The conduct of TTL in not making any move to have the order varied, despite the order of the DB, despite TTL applying for the CDR Scheme and despite TTL knowing that it was going to be unable to adhere to the payment schedules stated in the affidavit dated 5th December 2012, leads the Court to conclude that the disobedience of the order dated 21st November 2012 by TTL is wilful and not bonafide. The background to the passing of the order dated 21st November 2012 has also to be kept in view. The apology now offered by Lt. Col. Bedi is unconvincing and cannot be accepted. TTL does appear to have taken it for granted that the CDR Scheme somehow absolved TTL of the responsibility of having to honour its commitments to the Court. The binding nature and the solemnity of the undertaking given by parties to the Court has to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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