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2017 (5) TMI 316 - BOMBAY HIGH COURT

2017 (5) TMI 316 - BOMBAY HIGH COURT - TMI - Winding up petition - Held that:- Indian Overseas Bank has already filed 52 original applications before Debt Recovery Tribunal, Bombay against the respondent for recovery of over ₹ 1123,19,62,542/-. This court also noticed that the account of the respondent has been declared as fraudulent by the secured creditors in the CDR meetings and all the lenders have already exited and have decided to file the recovery proceedings against the respondent. .....

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ary scheme and not binding on the unsecured creditors of the company. It is held that the provisions pertaining to winding up proceedings under the Companies Act are more particularly meant for protecting the interest of the unsecured creditors of the company who are most affected lot when a company becomes commercially insolvent. The secured creditors of the company can always pursue their claim by keeping themselves out of the winding up proceedings. By the said judgment this court admitted th .....

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ETITION NO. 496, 497, 498 OF 2014 ALONGWITH CIVIL APPLICATION (L) NO. 890 OF 2015, 886 OF 2015, 885 OF 2015 - Dated:- 5-5-2017 - R.D. DHANUKA, J. Mr. Sharan Jagtiani, a/w. Mr. Nirman Sharma, a/w. Ms. Pinky Patel, i/b. M/s. Desai & Diwanji for the Petitioner. Mr. Simil Purohit, a/w. Mr. Punit Damodar, Ms. Nikita Vardhan, i/b. Kanga & Co. for the Respondent. Ms. Ankita Singhania, a/w. Mr. Aamir Ali Shaikh, Mr. Punit Kachalia, i/b.I. V. Merchant & Co. for the Intervenor/Applicants in JU .....

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f all the three matters being identical were heard together for the purpose of considering admission of these petitions and are decided by a common order. 3. Some of the relevant facts for the purpose of deciding whether these petitions shall be admitted or not are as under :- 4. Insofar as Company Petition No.496 of 2014 is concerned, it is the case of the petitioner that the petitioner gave loan to the respondent on 19th March,2012 in the sum of ₹ 50,00,000/- by a cheque. The said amount .....

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er,2012 for ₹ 1,35,000/- towards interest component on the amount of ₹ 50,00,000/- to the petitioner. 5. On 4th April, 2013 the petitioner deposited the said postdated cheque with his bankers viz. Citi Bank and the said cheque was dishonoured with a remark 'Exceeds Arrangement'. The petitioner has already filed a separate criminal proceedings against the respondent and the same are pending. 6. The petitioner issued a notice through his advocates' letter dated 3rd October, .....

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o the said notice in the month of October 2013 (Ex.D to the petition) and vaguely denied the claims. It was conveyed to the petitioner that the respondent was facing a temporary liquidity crunch and was therefore unable to make certain repayment obligations towards its lenders. The company was most likely to overcome its present liquidity crunch and meet its payment obligations in the near future. The respondent informed that the respondent had approached the Corporate Debt Restructuring (CDR) C .....

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and were never meant for repayment of alleged loan. It was contended that the subject cheques were without any mandate as the drawer of the cheque had expired before presenting the cheques for payment in the bank. According to the petitioner in the Company Petition No.496 of 2014, the respondent is liable to pay a sum of ₹ 54,63,635/- with further interest thereon from 20th December,2013 at the rate of 18% per annum till payment. 9. Insofar as Company Petition No.497 of 2014 is concerned, .....

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far as Company Petition No.498 of 2014 is concerned, the petitioner had granted loan of ₹ 50,00,000/- to the respondent vide cheque dated 19th March,2012. The other facts in Company Petition No.498 of 2014 are identical to the facts of Company Petition No.496 of 2014. According to the petitioner, as on the date of filing of the petition, the respondent is liable to pay a sum of ₹ 54,63,635/- with further interest thereon at the rate of 18% per annum from the date of filing of the pet .....

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overy of sum of ₹ 68,37,96,666/-. It is submitted by the learned counsel for the petitioner that the defence raised by the respondent in the affidavit in reply to these company petitions were also raised in the reply to the Summons for Judgment before this court in the said summary suit filed by M/s.Ashok Commercial Enterprises & Anr. against the respondent herein. He submits that this court has rejected the plea raised by the respondent herein in the said order dated 24th February,201 .....

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he said issue in detail in the said judgment and after adverting to the judgments of this court in cases of (1) M/s. Rushabh Precision Bearings Ltd. vs. M/s.Marine Container Services (India) Pvt. Ltd., 1993(3) Bom.C.R.760, (2) Bharati Surendra Khandhar vs. Deepak M.Shah in Summons for Judgment No.727 of 1998 decided on 8th October, 2001, (3) Jatin Jashwantrai Bhagat vs. Dayaram Waghji Thakar in Summons for Judgment No.309 of 2006 decided on 4th October,2006, (4)Sha Damji Deraj vs. Megraj Bhikumc .....

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deration of the negotiable instrument, but would itself be recoverable even if the creditors were not to sue on the negotiable instrument. It is held that had the suit been a suit for recovery of a loan, the defences raised by the defendant under the provisions of Bombay Money Lenders Act, 1946 would have given rise to triable issues, but the suit was based on dishonoured cheques which were issued towards refund of the loan and were negotiable instruments issued in consideration of an antecedent .....

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inding up of the respondents. He submits that in any event, in these three cases also the petitioner has filed winding up proceedings based on the dishonoured cheques and thus the principles laid down by this court in the said judgment in case of M/s. Ashok Commercial Enterprises & Anr. (supra) would apply to the facts of this case. 15. Insofar as the plea of the respondent in the affidavit in reply that the cheques were issued and were handed over to the petitioner only as a collateral secu .....

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can only be termed as bogus. 16. Insofar as the defence raised by the respondent that since the signatory of the cheque had expired before presentation of the cheque by the petitioner and thus there was no valid presentation for payment is concerned, similar defence was also raised by the respondent in the said summary suit. This court considered the said defence in the said order dated 24th February,2014 and rejected the said defence on the ground that the signatory of the cheque was the manag .....

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passed by the Division Bench of this court on 20th November,2014 in Appeal (L) No.252 of 2014 arising out of the said order dated 24th February,2014 in Summons for Judgment No.21 of 2013 which was filed by the respondent herein. It is submitted by the learned counsel that the Division Bench of this court has rejected each and every submission made by the respondent herein and has dismissed the said appeal. It is submitted that the defence raised by the respondent in affidavit in reply to these p .....

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he petitioner also invited my attention to the order passed by this court in Company Petition No.136 of 2014 filed by M/s.Ashok Commercial Enterprises against the respondent herein. It is submitted by the learned counsel that this court has rejected various contentions raised by the respondent and has admitted the said Company Petition No.136 of 2014 against the respondent herein. 19. Insofar as the CDR proposal relied upon by the respondent is concerned, it is submitted by the learned counsel f .....

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and thus the petition itself is not maintainable. He also invited my attention to the affidavit of service filed by the petitioner on 22nd August,2014 and submits that event the said affidavit of service would clearly indicates that the papers and proceedings and the notice were not served at the registered office address of the respondent. 21. Insofar as plea under the provisions of Bombay Money Lenders Act, 1946 is concerned, Mr. Purohit, learned counsel appearing for the respondent placed re .....

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lf would not be maintainable. He also invited my attention to the averments made in paragraph (7) of the company petition and would submit that it is the case of the petitioner himself that he had agreed to give loan of ₹ 50 lacs to the respondent. He submits that the company petition is not filed based on the dishonoured cheque but has been based on the loan advanced to the respondent. 22. Learned counsel also invited my attention to the demand notice issued by the petitioner on 22nd Octo .....

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on would not be maintainable since the debt itself was not legally recoverable. He submits that the petitioner has not expressed anywhere in the company petition as to why the petitioner could not be considered as a money lender within the meaning of money lenders under the provisions of Bombay Money Lenders Act, 1946. He submits that the order passed by the S.C.Gupte, J. may be a good law but in the facts of that case. 23. Mr.Jagtiani, learned counsel for the petitioner in rejoinder invited my .....

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cember,2012 had acknowledged the said amount and had issued post-dated cheque towards the repayment of the said loan. It is submitted that the order passed by S.C. Gupte, J. on 24th February,2014 and the order passed by the Division Bench of this court in Appeal (L) No.252 of 2014 would squarely apply to the facts of this case. 24. Insofar as judgment of this court in case of M/s.Rushabh Precision Bearings Ltd. (supra) relied upon by the learned counsel for the respondent is concerned, Mr.Jagtia .....

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definition of money lending by virtue of section 2(g)(f). He submits that in this case also, it is not the case of the respondent that there were any continuity or repeated loan transactions between the petitioner and the respondent or that the petitioner was regularly carrying on business of money lending. He submits that in all three petitions, three separate individuals have granted loan to the respondent and thus in no circumstances, the provisions of Bombay Money Lenders Act could be attrac .....

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reply to the statutory notice dated 22nd October,2013 issued by the petitioner, the respondent never raised an issue about service of the statutory notice at the registered office address. The petitioner had issued two statutory notices one at the address G-11, Everest Building, 5th Floor, Tardeo, Mumbai - 400 034 and another at 601, Auto Commerce Centrekennedy Bridge, Nana Chowk, Grant Road, Mumbai - 400 036. The respondent had responded to the statutory notice issued by the petitioner on 3rd .....

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filed by REASONS AND CONCLUSIONS 27. Insofar as the issue raised by the respondent that the transaction between the petitioner and the respondent was a money lending transaction and would fall within the definition of loan under section 2(a) of the Bombay Money Lenders Act, 1946 and in view of the petitioner not holding the money lending licence, company petition itself is not maintainable being hit by section 10 of the Bombay Money Lenders Act, 1946 is concerned, this court in the order dated .....

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y Money Lenders Act, 1946 would have given rise to triable issue but the suit was based on the dishonoured cheque and thus those defences were untenable. 28. The Division Bench of this court in the appeal filed by the respondent herein has also dealt with this issue in detail. The Division Bench of this court held that as the advances were made by the plaintiff on the basis of the negotiable instrument as defined in the Negotiable Instrument Act, 1881, the loan did not fall within the purview of .....

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ven loan on 19th March,2012 by a cheque. There was no writing executed between the parties while the petitioner had given loan to the respondent. On 16th December,2012, the respondent acknowledged the receipt of the said loan only at the rate of 12% per annum and assured to make repayment of the loan and issued a cheque of ₹ 50 lacs dated 16th March,2013 towards repayment. The said cheque was admittedly dishonoured. 29. In my view, the issue raised by the respondent is thus no longer res i .....

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46 reads thus :- 10. (1) No court shall pass a decree in favour of a money-lender in any suit to which this Act applies [including such suit pending in the court before the commencement of the Bombay Money-lenders (Amendment) Act, 1975] unless the court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money-lender held a valid licence, and if the court is satisfied that the money-lender did not hold a valid licence, it shall dismiss the .....

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a moneylender." 31. A perusal of section 10 of the said Bombay Money Lenders Act, 1946 provides that if a money lender who has granted a loan or advance did not have money lending licence at the time when such loan or advance was granted and if the provisions of the said Bombay Money Lenders Act applies to those transaction, no court can pass such a decree in favour of the money lender. In my view the said provision will not be attracted to the winding up proceedings. The winding up procee .....

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ine. 32. Insofar as other pleas raised by the respondent in the affidavit in reply such as (i) the cheques were given as a collateral security for repayment of the loan, (ii) there was no valid presentment of the cheque in view of the signatory of the said cheque having expired before such presentment are concerned, similar pleas are already rejected by this court in the said order dated 24th February,2014 passed by the learned Single Judge and by the order dated 20th November,2014 passed by the .....

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espondent in the affidavit in reply. Be that as it may, the fact remains that the petitioner has issued two statutory notices, one at the registered office address of the respondent and one at the administrative office address of the respondent. The respondent has already responded to the one of such statutory notice. Even in the said reply, the respondent did not raise any such issue. It is not the case of the respondent that before filing the company petition, the respondent has notified any o .....

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cted several issues raised by the respondent. This court has also considered an admitted fact that the CDR scheme has already failed. The respondent had several opportunities for revival if any, in last three years but the respondent has failed to revive. This court has also held that the petitioner in that case being an unsecured creditor is not a party to the said joint lender forum and thus even if any decision is taken by Joint Lenders Forum at some stage in future, the said decision would n .....

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verseas Bank has already filed 52 original applications before Debt Recovery Tribunal, Bombay against the respondent for recovery of over ₹ 1123,19,62,542/-. This court also noticed that the account of the respondent has been declared as fraudulent by the secured creditors in the CDR meetings and all the lenders have already exited and have decided to file the recovery proceedings against the respondent. The respondent though had applied before BIFR for revival, could not succeed. This cou .....

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e unsecured creditors of the company. It is held that the provisions pertaining to winding up proceedings under the Companies Act are more particularly meant for protecting the interest of the unsecured creditors of the company who are most affected lot when a company becomes commercially insolvent. The secured creditors of the company can always pursue their claim by keeping themselves out of the winding up proceedings. By the said judgment this court admitted the said Company Petition No.136 o .....

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e to pay its debts. 38. I, therefore, pass the following order :- (a) Applicants in Company Application (L)No.890 of 2015, Company Application (L)No.886 of 2015 and Company Application (L)No.885 of 2015 are allowed to intervene in the Company Petition No.496 of 2014, Company Petition No.497 of 2014 and Company Petition No.498 of 2014 respectively. Company applications are disposed of in the aforesaid terms. (b) Company Petition No.496 of 2014, Company Petition No.497 of 2014 and Company Petition .....

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