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2017 (2) TMI 519 - DELHI HIGH COURT

2017 (2) TMI 519 - DELHI HIGH COURT - TMI - Winding up petition - Held that:- The record of the instant appeal would show, and we highlight that it is the case of the appellant itself, that it had entered into settlement agreement with 14 other petitioners who had filed company petitions seeking winding up of the appellant. It is the case of the appellant that it is actively negotiating to settle the disputes with 8 other petitioners who have likewise filed the company petitions. We find that th .....

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ppellant urge that merely because the appellant is in debt would be no ground to wind up the appellant if it otherwise is a viable company. We have serious doubts on that. From the statement of affairs filed, the manner of giving the information is primafacie suggestive of diversion of funds. - Petition under Section 9 of the Arbitration and Conciliation Act, 1996 - Held that:- Surprisingly, in the appeal, the appellant itself has pleaded that the learned Company Judge had directed the appel .....

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The appellant is free to do so before the learned Single Judge. - The facts which we have noted, which emanate from the statement of affairs filed by the directors of the appellant do not warrant any of the impugned order to be set aside in appeal. The debts owned by the appellant are much. The rosy picture painted in the balance sheet, is not so rosy. The situs of the assets of the appellant is not known. The persons who have to pay money to the appellant are unknown as of today. The perso .....

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a preferential payment to an unsecured creditor. We dismiss the appeal and CM for the reason compromise orders obtained by the applicants would be in the nature of a decree and the applicants are free to file applications before the learned Company Judge seeking permission to institute execution proceedings. - The appellant which is under provisional liquidation cannot be now represented by any of its ex-Directors and no settlement or undertaking by any ex-Director would bind the appellant .....

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Dher, Advocate for applicant Mr. Rajiv Bahl, Advocate for Official Liquidator PRADEEP NANDRAJOG, J. CM No.35077/2016 Allowed subject to just exceptions. CM No.4338-39/2017 Allowed subject to just exceptions. Co.A.17/2016 & CM No.4929/2017 & 4931/2017 1. Orders dated February 08, 2016, February 26, 2016, March 23, 2016, April 21, 2016, May 05, 2016 and August 08, 2016 passed by the learned Company Judge are impugned in the instant appeal. 2. Taking cognizance of five company petitions see .....

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. The Directors of the company were directed to file the statement of affairs within 21 days. 3. CA No.748/2016 was filed by the appellant in which prayer made was to keep in abeyance the order dated February 08, 2016 with further prayer that the Official Liquidator be directed to de-seal the office premises of the appellant. It was pleaded in the application that the appellant had finalized a deal for sale of one its immovable property to generate funds to meet immediate requirements of the cre .....

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ant company. The learned Company Judge noted that there were a large number of creditors of the appellant and thus a piecemeal approach qua a few creditors would not be the appropriate course of action to be permitted by the Court to be adopted by the appellant. The learned Company Judge recorded in the order : Having regard to the above, it is quite clear that the applicant/respondent may have to formulate a scheme of compromise/arrangement with the creditors, which will not only involve the cl .....

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include filing of an application for compromise/arrangement with the creditors, and an application, whereby, notice could be issued to the concerned secured creditors qua the immovable properties (including the aforementioned property), which the respondent/applicant seeks permission to sell in order to pay off the creditors . The matter was re-notified for April 21, 2016. The order dated April 21, 2016 simply re-notified the proceedings to July 20, 2016. It appears certain applications seeking .....

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appellant company were vested in the Official Liquidator. The learned Company Judge recorded that the Official Liquidator would ensure that all property of the company are taken possession of. Concerning the settlement in terms whereof CP No.357/2015 was desired to be disposed of by the petitioner thereof and the appellant company the learned Judge declined to accept the request. 4. A perusal of the prolix appeal spanning 41 pages, would evince that challenge to the order dated February 08, 201 .....

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ners of the five company petitions which were listed before the learned Company Judge when CP No.357/2015 was admitted. Appellant pleads that once it had settled the dispute with the petitioners of the five company petitions, and all of them had agreed for the company petitions to be disposed of in terms of the settlement, the learned Company Judge ought not to have adjourned the matter, calling upon the Official Liquidator to proceed ahead to take charge of the properties of the company. It is .....

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appellant itself : "there are thousands of flats nearing construction" would mean that the appellant company has to satisfy its commitments to a large number of investors and the number is in thousands. 7. The directors of the appellant company had filed a statement of affairs before the Provisional Liquidator on May 23, 2016. As per the said statement of affairs, the appellant has cash in hand in sum of ₹ 38,62,836/-. This money has not been deposited with the Official Liquidato .....

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nt and machinery has been shown as ₹ 4,66,44,407/- without indicating the details or the location thereof. Fixtures and furniture have been valued at ₹ 42,23,185/- without indicating where they are lying. Investments and marketable securities estimated to be realized have been quantified at ₹ 84,18,16,575/- without providing the address of the party with whom the investments have been made and from whom the securities are recoverable. Value of the vehicles statedly owned by the .....

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ling the instant appeal much beyond limitation without seeking delay to be condoned in challenging the said order. That apart, the further orders passed in the company petition and the Company Applications filed by the appellant before the learned Company Judge show that the appellant did not dispute the debt due to the five company petitioners, evidenced by the fact that the appellant proceeded to negotiate and enter into settlement with the five company petitioners. Similarly the appellant sta .....

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he company petitions. We find that the appellant filed an affidavit on July 19, 2016 bringing to the notice of the learned Company Judge the endeavours made to settle the claims of the creditors. 10. The conduct of the appellant before the learned Company Judge is clearly indicative of the appellant acquiescing in the order admitting the winding up petition and proceeding to settle the disputes with a number of creditors. This itself establishes that the appellant company is heavily in debt. 11. .....

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d to sell a flat at its group housing project called Celest Towers to the applicant for which the appellant took ₹ 1 crore. The appellant had agreed to re-purchase the flat by paying to the applicant ₹ 1,23,88,972/- and for which had issued post-dated cheques. Appellant failed to give possession of the flat. Disputes arose. The applicant filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 in which a settlement was arrived at requiring the appellant to pay t .....

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here was another person who had likewise approached a learned Single Judge of this Court on the Original Side under the Arbitration and Conciliation Act, 1996, in which proceedings the appellant paid ₹ 65,88,986/-. 14. We note aforesaid facts to bring home the point that a scramble appears to have commenced by the persons who had paid money to the appellant and booked flats. 15. Reports filed by the learned Official Liquidator before the learned Company Judge would evince that the learned .....

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Company Judge we do not intend to return any determinative finding but suffice to state that from the aforesaid facts noted it appears those who were in charge of the affairs of the appellant have much to explain. There are traces of the funds being siphoned off. 17. That apart, the appellant cannot be permitted to satisfy the claims of a few creditors on preferential basis, for if the assets fall short it would mean a large number of unsecured creditors being left high and dry. 18. Surprisingl .....

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g of the appeal to enable appellant to file a scheme of compromise/arrangement with the other creditors. The appellant is free to do so before the learned Single Judge. 19. The facts which we have noted, which emanate from the statement of affairs filed by the directors of the appellant do not warrant any of the impugned order to be set aside in appeal. The debts owned by the appellant are much. The rosy picture painted in the balance sheet, is not so rosy. The situs of the assets of the appella .....

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