TMI Blog2017 (6) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner. Mr. Sameer Jain a/w Mr. Kantilal Kanojia a/w Mr. Angad Sandhu i/by Mr. P.N. Patwardhan for the respondent. Judgment :- 1. By these two petitions filed under Sections 433 and 434 of the Companies Act, 1956, the petitioner seeks winding up of the respondent company on the ground that the respondent is unable to pay its debts. 2. By consent of the parties, both the petitions were heard together for the purpose of deciding whether these petitions shall be admitted or not and are being considered by a common order. Some of the relevant facts in Company Petition No.277 of 2011 are as under :- 3. The petitioner is one of the agencies nominated by the Government of India for import and export of gold and other precious metals under the Foreign Trade Policy. The respondent expressed its desire to associate with the petitioner for selling or exporting gold and diamonds to the prospective overseas buyers. The petitioner agreed to provide its co-operation to the respondent in order to promote the export of gold jewellery. The parties accordingly entered into an agreement dated 15th December 2006 for export of gold jewellery by the respondent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the purchase price, in the event of failure of the foreign buyers not paying to the petitioner the purchase price payable by it for the purchases of gold jewellery. 6. It was agreed that any demand made on the guarantor by the beneficiary shall be final, binding and conclusive evidence and that the respondent would be liable under the said guarantee as if it were the sole principal debtor and not merely a security. The managing director and one of the directors of the respondent had also submitted their personal guarantees dated 7th January 2010 in favour of the petitioner making themselves personally liable to pay the purchase price of the exported gold jewellery in the event of failure on the part of the respondent to pay the said amount to the petitioner. It is the case of the petitioner that the petitioner from time to time reminded the respondent to pay to the petitioner various amounts payable under the said post shipment finance facility availed of by the respondent but the respondent did not pay any amount. 7. The petitioner vide its letters dated 7th May 2010 and 18th May 2010 called upon the respondent to pay US$ 7759680 which was equivalent to Indian ₹ 41,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. The respondent filed notice of motion in the said summary suit under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the parties to the Arbitration. Some time in the year 2011, the petitioner filed this winding up petition against the respondent. 11. By an order dated 13th January 2014, this Court dismissed the said notice of motion filed by the respondent under section 8 of the Arbitration and Conciliation Act, 1996 in said summary suit filed by the respondent. By an order dated 7th October 2015 , the division bench of this Court dismissed the Appeal (L) No.52 of 2014 filed by the respondent against the said order dated 13th January 2014 as not maintainable. By an order dated 12th July 2016, the Supreme Court has dismissed the special leave petition filed by the respondent against the said order 7th October 2015 passed by the division bench of the this Court. 12. On 24th June 2011, the arbitration application filed by the respondent came to be rejected by this Court by observing that such an application will have to be made with the Indian Council of Arbitration. On 6th July 2011, the respondent filed an arbitration application (1797 of 2011) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding dues and settle the matter for which the foreign buyers were equally concerned and keen, they had given an understanding to the respondent that before July 2010, they would clear all the overdues and therefore had sought an extension of time period. The respondent accordingly requested the petitioner to grant an extension of time period of six months. The respondent requested the petitioner to send the required letter to the Exim Bank to enable them to issue NO ADJUSTMENT FROM THE EXPORT PROCEED letter which would help the respondent to further pursue remittance of old outstanding export proceeds from the foreign buyers since the respondent had to continue the business with the various buyers for keeping the business terms running for the sake of best business relationship. 16. The respondent vide its letter dated 29th January 2010 to the petitioner alleged that the respondent was unable to receive the requisite letter from the petitioner as well as from the Exim Bank whereas the respondent had been consistently pursuing with the buyers to make the payments against the export bills. The respondent made a suggestion to the petitioner to permit the respondent to allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still outstanding. 20. It is the case of the petitioner that since the Exim bank has already adjusted the said 20 invoices of gold jewellery for which the respondent had received 83.5% as post shipment finance against the said adjusted 8 invoices of cut and polished diamonds, the total outstanding of the Exim Bank pertains to 8 invoices to cut and polished diamonds and 5 invoices of gold jewellery which are other than the said 20 invoices of gold jewellery. It is the case of the petitioner that despite receiving remittances from the foreign buyers in their account in the Axis Bank, the respondent fraudulently did not remit the said remittances to the Exim Bank. Since the export proceeds had not been remitted to the petitioner, the entire outstanding amount of the said 8 invoices of diamond document and other 5 gold jewellery invoices is recoverable from the respondent by the petitioner. It is the case of the petitioner that this company petition is filed by the petitioner against the respondent in respect of the said 8 invoices of diamond document and other invoices referred to at page 106 of the petition which were adjusted against the gold jewellery but sale proceeds was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lieu of the amount having credited in the account of the respondent and debited in the account of the respondent but all the cheques were dishonoured with remark stop payment. Sometime in the year 2011, the petitioner filed a summary suit on the basis of the dishonoured cheques, corporate guarantees and personal guarantees. Notice of Motion No.1697 of 2012 filed by the respondent in the said summary suit under Section 8 of the Arbitration and Conciliation Act, 1996 came to be dismissed. Appeal against the said order dated 13th January 2014 is also dismissed by the Appeal Court as not maintainable. Special Leave Petition filed by the respondent is also dismissed. Submissions of both the parties in Company Petition Nos.277 of 2011 and 128 of 2011:- 25. Mr. Sancheti, learned senior counsel appearing for the petitioner invited my attention to the agreement dated 15th December 2006 and also to other documents executed by and between the parties and the correspondence forming part of the record. He submits that under the said agreement dated 15th December 2006, the realization of export proceeds from the foreign buyers was the responsibilities of the respondent besides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst each and every invoices is US $ 11381500 equivalent to Indian ₹ 82,96,73,548/-. 28. Learned senior counsel invited my attention to statement no.1 at page 167 i.e. part of the affidavit-in-reply and submits that there is no dispute between the parties in respect of the said statement no.1 since the payment of the said transaction had been realized from the foreign buyers and the balance of the said post shipment finance was made by the petitioner to the respondent as per the agreement dated 15th December 2006. He submits that as regards the statement no.2 at page no.168 of the company petition mentioned in the affidavit-in-reply, a sum of ₹ 52,79,77,683/- has been remitted by the petitioner to the respondent as post shipment finance being 83.5% through its bankers and had raised separate invoices to the foreign buyers towards those transactions. The petitioner had not received any final remittance from the foreign buyers except serial no.10, 11 and 12 of the said statement. 29. It is submitted that since the respondent has received post shipment finance as against the serial nos.1 to 9, 13 to 18 upto 83.5% through the bankers of the petitioner, the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the said invoices. He submits that the Axis Bank had already issued a 'Certificate of Foreign Inward Remittance' in respect of the Invoice No.STC/GOLD/MASUMI/0001/09-10 evidencing a payment of US $ 713615. Similar certificates were issued by the Axis Bank in respect of various other invoices. It is submitted by the learned senior counsel that the respondent has thus received double payment and has dishonestly refused to pay the dues of the petitioner. Those banks through whom the bills were discounted have raised a claim against the petitioner before Debts Recovery Tribunal. 33. It is submitted by the learned senior counsel that the respondent is heavily indebted and has taken an undue advantage of the petitioner accepting the request of the respondent for adjustment of the payment. He submits that the respondent being unable to pay its debts, these two company petitions filed by the petitioner deserve to be admitted and the official liquidator be appointed as a provisional liquidator of the respondent-company with all powers under the provisions of the Companies Act, 1956. 34. It is submitted by the learned senior counsel that the petitioner did not mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts officers. 37. It is submitted that the respondent has raised substantial defence not only in the affidavit-in-reply but also in the correspondence. He submits that the disputed question of facts cannot be adjudicated upon in the company petition. It is submitted that the cut and polished diamond documents were without recourse and thus the petitioner could not have raised any claim against the respondent even if the foreign buyers had not released the payment to the petitioner or even if the respondent had not released any payment to the petitioner. He submits that tripartite agreement had been entered into between the foreign buyers, the petitioner and the respondent. It is submitted that the petitioner has received about ₹ 151 crores by discounting some of the bills and did not release any payment to the respondent. He submits that no claim is made by the petitioner against the respondent in respect of cut and polished diamond transaction. He submits that in view of tripartite agreement in respect of the said transaction, there is no obligation of the respondent to make any payment to the petitioner. He invited my attention to the said alleged tripartite agreement dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid so called tripartite agreement is already cancelled. He submits that cancellation of the said tripartite agreement is not challenged by the respondent. The officers of the petitioner who had alleged to have signed the said tripartite agreement had no authority to execute such agreement. He submits that those bills were not discounted by the petitioner at all. It is submitted that if according to the respondent, in view of the tripartite agreement or in view of the said bills, cut and polished diamond documents were submitted without recourse and no amount could be claimed from the respondent by the petitioner, the respondent would not have requested the petitioner to grant extension to the foreign buyers to release the payment. He submits that this defence of the respondent is thoroughly dishonest and is contrary to the documents on record. It is submitted that it is the case of the petitioner that the petitioner did not receive any payments from the foreign buyers and thus under the agreement entered into between the parties, it was the responsibility of the respondent to pay to the petitioner in respect of such dues not paid by the foreign buyers. He submits that foreign c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice and addendum issued by the authority and also ordered to remove the name of the petitioner from Denied Entity list. 45. Mr.Sancheti, learned senior counsel submits that the said order dated 7th/8th March 2016 passed by the Additional Directorate General of Foreign Trade is not relevant for the purpose of deciding these matters and in any event would not be binding on this Court. He submits that the said order was passed by the appellate authority without hearing the petitioner. REASONS AND CONCLUSIONS:- 46. With the assistance of the learned senior counsel for the petitioner and learned counsel for the respondent, I have perused the pleadings of the parties, documents annexed to both the petitions and the affidavits. There is no dispute that the parties had executed an agreement on 15th December 2006. Under the said agreement, the respondent had undertaken to obtain export orders from the prospective foreign buyers in the name of the exporter. The terms of payment of the export orders was DA 90-120 days Usance from the date of BL/AWB. The realization of the export proceeds from the foreign buyers was the responsibility of the respondent besides successful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner or to the bankers of the petitioner, the respondent has raised a dispute and has filed recovery proceedings. The petitioner has been making payment to those bankers though the said liability was to be discharged by the respondent. If the respondent would have released the payment to the petitioner, the respondent would have discharged the liability of its bankers. 50. In so far as the submission of the learned counsel for the respondent that the petitioner has filed a summary suit and summons for judgment is pending is concerned, in my view, even if the petitioner has filed a summary suit against the respondent, there is no bar in prosecuting the winding up proceedings against the same party. The company petition is not for recovery of money claim but is for winding up. 51. I am not inclined to accept the submission of the learned counsel for the respondent that since the arbitration proceeding filed by the respondent is pending before the arbitral tribunal, this Court cannot pass any order in these winding up proceedings filed by the petitioner on the ground that the respondent is unable to pay its debts. It is the case of the petitioner that the liability of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the submission of the learned counsel for the respondent that cut and polished diamond documents were without recourse and thus no amount could be recovered from the respondent is concerned, the respondent could not produce any document in support of this frivolous plea. If according to the respondent, the said diamond documents were without recourse, the respondent would not have asked the petitioner to grant extension of time to the foreign buyers to make payment by expressing their difficulty and would not have applied for adjustment of the liability. In my view, this defence raised by the respondent is also thoroughly dishonest and moonshine. In my view, the respondent has deliberately not paid the legitimate dues of the petitioner and is unable to pay its debts. In view of the fact that the liability of the respondent against the petitioner is substantial and since the respondent is unable to pay its debts, it would be in the interest of justice, the official liquidator shall be appointed as a provisional liquidator as prayed by the petitioner during the pendency of the petition. 56. In so far as the judgment of the Delhi High Court in the case of German Homoepathic D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date. The Supreme Court has adverted to the earlier judgment of the Supreme Court in the case of Madhusudan Gordhandas v. Madhu Woollen Industries Pvt. Ltd., reported in (1972) 42 Comp Cas 125 in which it has been held by the Supreme Court that where there is no doubt that the company owes the creditor a debt entitling him to a winding-up order but the exact amount of the debt is disputed, the court will make a winding-up order without requiring the creditor to quantify the debt precisely. It is held that the machinery for winding up will not be allowed to be utilized merely as a means for realising its debts due from a company. 59. In the matter before the Supreme Court, the appellant was not a debtor because it was a financial institution for an amount which was agreed to be subscribed. Neither the learned Single Judge nor the Division Bench had decided this important question whether there was a debt and the company had either neglected or was unable to pay. However, in the facts of this case, the agreement entered into between the parties including the corporate guarantees submitted by the respondent clearly indicates that in the event of foreign customers of the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not assist the case of the respondent. 61. I therefore pass the following order :- a) Company Petition Nos.277 of 2011 and 128 of 2011 are admitted and shall be made returnable on 21st August 2017. b) The petitioner shall advertise the Company Petition No.277 of 2011 in two local newspapers, viz. Free Press Journal (in English) and Navshakti (in Marathi) and also in Maharashtra Government Gazette. Any delay in publication of the advertisement in the Maharashtra Government Gazette and any resultant inadequacy of the notice shall not invalidate such advertisement and shall not constitute non-compliance with this direction or with the Companies (Court) Rules, 1959. (c) The learned counsel appearing for the respondent-company waives service of the company petition under Rule 28 of the Companies (Court) Rules, 1959. (d) The petitioner shall also deposit an amount of ₹ 10,000/- in the Company Petition No.277 of 2011 with the Prothonotary and Senior Master of this Court towards the publication charges, with intimation to the Company Registrar within three weeks from the date of admission of the petitions failing which, both the petitions to stand di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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