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TMI Blog2014 (6) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... oner company has also prayed that it is just and equitable to order winding up of the respondent company as the respondent company had failed to commence its business operation within a period of one year from the date of its incorporation. 2. Briefly stated, the relevant facts areas follows:- 2.1 IDBI and the respondent company entered into a 'Rupee Term Loan Agreement' dated 07.10.1996. In terms of the said agreement IDBI sanctioned a loan for a sum of Rs.367 lakhs and in pursuance thereof, disbursed an amount of Rs.329 lakhs from time to time. Further, IDBI and the respondent company also entered into a 'Foreign Currency Loan Agreement' dated 06.11.1996 whereby a foreign currency loan of DM 779105 equivalent to Rs.183 lakhs was sanctioned and a sum of DM 4,92,557 equivalent to Rs.124.81 lakhs was disbursed by IDBI. 2.2 The respondent company defaulted in the repayment of the amount due under both the loan agreements and by a recall notice dated 10.06.1998, IDBI called upon the respondent company to pay the amounts due to it along with interest. By a notice dated 26.06.1998, IDBI invoked the guarantee clause and called upon the guarantors to liquidate the dues of the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent company had also filed a writ petition (W.P.(C) No.5258/2008) before this Court challenging the assignment of debt to KMBL, however, the same was withdrawn by the respondent company on 24.02.2009. 2.6 In the meantime, KMBL assigned the said debt in favor of the petitioner herein by an assignment deed dated 16.04.2008. The respondent company filed a writ petition (W.P.(C) No.6557/2008) before this court seeking an order restraining IDBI from assigning the debt to any third party and a direction to IDBI to accept the OTS. Further, the respondent company also sought quashing of the assignment of debt by IDBI to KMBL. The said writ petition was dismissed by this court by an order dated 02.02.2011. The said order dated 02.02.2011 was challenged by the respondent company before a Division Bench of this Court in a Letters Patent Appeal (LPA No.380/2011) which was also dismissed by the Division Bench by an order dated 19.12.2011. 2.7 The petitioner company filed an application before the DRT for substitution as a party in place of KMBL being an assignee of the debt. The said application was contested by the respondent inter alia on the ground that the petitioner was neither a bank no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and neglected to pay the amount due and admitted by the respondent in its balance sheets for the years 1998-99, 2001-02, 2002-03 and 2004-05 filed with the Registrar of Companies. It was further contended that in view of the failure of the respondent company to respond to the notice under section 434(1)(a) of the Act, it ought to be presumed that the respondent is unable to pay its debts. 4. The learned counsel for the petitioner has contended that the respondent company is also liable to be wound up as the company had failed to commence its business within one year from the date of its incorporation. It is submitted that the respondent company was incorporated with the objective of setting up of a 100% export oriented unit with an installed capacity of 1920 TPA for processing various spices. However, the respondent did not start its commercial production and has not been doing any business for the last about 19 years i.e. since its incorporation. It is submitted that the respondent company has admitted the loss of its substratum. The fact that the respondent company has been unable to commence its business since its incorporation, is also admitted. And, therefore, the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 433(e) of the Act. He submitted that since the respondent had deposited the amount of Rs.250 lacs in Court, which was the debt as admittedly payable, the petition was liable to be dismissed. 9. I have heard the learned counsel for the parties. 10. The controversy to be addressed in the present case is whether the respondent company is liable to be wound up on account of its inability to pay its debts. It is also necessary to consider whether the petitioner has made out a case for winding up of the respondent company under Section 433(c) or Section 433(f) of the Act and whether, in the given facts, this court should exercise its discretion to wind up the company under those provisions. 11. At the outset, I must note that the notice of this petition was issued, on 24.05.2012, as the petitioner had confined its claim, for the purposes of this petition, to the One Time Settlement offer relied upon by the respondent i.e. a sum of Rs.250 lacs. At the material time, the learned counsel for the petitioner had also submitted that the petitioner also claims interest on the OTS amount from the date of approval of the proposal, till the date of payment. The said order passed by this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. The respondent had approached IDBI and had offered a sum of Rs.225 lacs as full and final settlement of its dues. This offer was considered by a Committee of IDBI in its meeting held on 21.03.2006 and the same was not accepted. The Committee decided that a counter offer of Rs.250 lacs should be made. The entire sum was to be discharged latest by 30.06.2006. According to the respondent, this counter offer was never communicated to the respondent. However, it was the case of the respondent in the writ petition (W.P.(C) 6557/2008) that the respondent was only liable to pay the amount, which IDBI had decided to accept and accordingly the respondent had prayed for an order directing IDBI to accept the OTS amounting as approved by IDBI on 27.03.2006. It is apparent from the facts that there was no concluded agreement between IDBI and the respondent for the settlement of the dues payable by the respondent. The offer made by the respondent for Rs.225 lacs was rejected and, therefore, the same also did not fructify into a binding contract. Even as per the respondent, since the counter offer had never been communicated to the respondent, the question of its acceptance resulting in a bind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same cannot lead to a conclusion that the respondent is unable to pay its debts and, resultantly, should be wound up. 15. The next question to be addressed is whether the respondent company is liable to be wound up under Section 433(c) or 433(f) of the Act. Although, the pleadings filed by the petitioner does mention that the respondent has not commenced its business, the focus of the petition is not that the respondent is liable to be wound up on account of noncommencement/ suspension of business. The petitioner had confined the petition only to a claim of debt, at the time of issuance of notice. This by itself would be reason enough for not permitting the petitioner to urge that the respondent has lost its substratum and should be wound up on account of its failure to commence business. Having stated the above, I deem it appropriate to also consider the merits of the said contention. 16. In order to consider whether a company should be wound up under Section 433(c) on account of non-commencement of public suspension of business, it would be necessary to investigate whether there is a good reason for the same and whether there is reasonable chance for the company to be revived. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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