TMI Blog2017 (3) TMI 1627X X X X Extracts X X X X X X X X Extracts X X X X ..... tain this petition and she has not come to the Tribunal with clean hands as ought to be in accordance with law. Therefore, the petitioner is not entitled for any relief as sought for. It is not a fit case to initiate Insolvency process as prayed for by the petitioner/applicant. - CP(IB)/19/7/HDB/2017 - - - Dated:- 13-3-2017 - Rajeswara Rao Vittanala, Member (J) and Ravikumar Duraisamy, Member (T) For the Appellant: K. Arun Kumar For the Respondent: K.V. Simhadri and Suchithra ORDER Rajeswara Rao Vittanala, Member (J) 1. The present Company Petition (which is herein after referred to as Company petition) bearing No. CP(IB)/19/7/HDB/2017 is filed by Dr. B.V.S. Lakshmi, a financial creditor, (hereinafter referred to as Petitioner/applicant) under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking directions to initiate Corporate Insolvency Resolution process, in the matter of GEOMETRIX LASER SOLUTIONS PRIVATE LIMITED, (which is herein after referred to as ' Company') in accordance with the provisions of IBC, 2016; appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 38,74,767.00 (Rupees Thirty Eight Lakhs Seventy Four Thousand Seven hundred sixty seven) as being due to the Petitioner shown under the heading Dr. B.V.S. Lakshmi. The sub-ledger in the name of Dr. B.V.S. Lakshmi for the year 2013-14 shows the amount owed as ₹ 41,04,391.00 (Rupees Forty one lakhs four thousand three hundred ninety one only). The Petitioner relies upon on the Sub-ledger (ignoring the error in the Unsecured Loans Schedule in the Balance Sheet) to establish her claim. So Petitioner claims ₹ 41,04,391.00 (Rupees Forty One Lacs Four Thousand Three Hundred Ninety One only) as due as on 31/03/2014. (ii) Debt owed as at 31/03/2015 The annual audited accounts of the Respondent Company for the year 2014-15 discloses a sum of ₹ 89,85,792.00 (Rupees Eighty Nine Lakhs Eighty Five Thousand Seven Hundred Ninety Two) as being due to the Petitioner herein under the heading Dr. B.V.S. Lakshmi. The Sub-ledger in the name of Dr. B.V.S. Lakshmi for the year 2014-15 shows the amount owed as ₹ 75,03,462.00 (Rupees Seventy Five Lakhs Three Thousand Four Hundred Sixty Two only) represents what is owed by the Company to Dr. B.V.S. Lakshmi group, compr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 2015-16 Rs. Nil Owed to Petitioner as on 31/03/2016 is ₹ 91,47,864.00 e) The Petitioner, therefore, contends that while the Audited Financial Statement of the Company as on 31/03/2015 correctly reflect the amounts owed on the Petitioner, the Audited Financial Statements as on 31.03.2016, are mischievously and wrongly conceived as ₹ 79,36,737.11. The difference of ₹ 12,11,127.00 remains un-explainable. f) The petitioner contends that several other related transactions were incorrectly and mischievously shown as loans given/re-paid against several names, including those of Ms. Kalyana Hyma and Dr. B.V.S. Lakshmi. None of these disclosures are genuine. All of these are fabricated statements in order to show that the Petitioner was paid all her dues. So the petitioner wants the Company put to strict proof of establishment of re-payments of loans to her during the FY 2015-16. g) As the Company did not pay the dues as mentioned above, she got issued a statutory notice dated 7th September, 2016 to the Respondent Company, under Section 434 of the Companies Act, 1956 corresponding to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same is not maintainable either in law or on facts. b. It is contended that Respondent Company was incorporated on 5th January, 2006 with Promoter Directors, Mr. Pulipaka Kedarnath and Mrs. B.V.S. Lakshmi (Petitioner herein). The main object of the Company is to carry on business as a laser job shop providing services to the industry in India and abroad contributing to advancement of Indian industry in science and technology. c. The Petitioner has suppressed several material facts of the issue. She has not stated/disclosed her status as Promoter Director. To conceal fact of Promoter Director, she has fabricated crucial and relevant documents willfully and wantonly in Memorandum and Articles of Association, issued by Registrar of companies by changing her name as Promoter Director to that of her daughter's name i.e., B. Kalyana Hyma. This is utter false statement and the fact remains that she was the founder Director of the Respondent Company and memorandum of association supports the same. She has submitted her resignation by letter dated 14.3.2007. d. The Petitioner has also suppressed the criminal complaint filed by Respondent Company's Managing Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s availed the credit facilities for her company i.e. Cash Credit (Hyp) ₹ 20 lakhs, Term Loan ₹ 8.15 Lakhs, Bridge Loan ₹ 5 Lakhs, FLC ₹ 64 Lakhs, Bank Guarantee ₹ 10 Lakhs, Bill Purchase ₹ 8.50 Lakhs. The said limits were availed for the Company from erstwhile New Bank of India. Suryaraopet, Vijayawada during the year 1989. Subsequently, the said bank was merged with Punjab National Bank. It is stated, that despite repeated legal notices, reminders, court summons, Dr. B.V.S. Lakshmi and her husband have not paid any amount in pursuant to the DRT order as mentioned above. Therefore, the Bank requested the Respondent Company to inform them the complete details of shareholdings/debentures held by the Petitioner and her husband in Respondent Company and also requested not to transfer any of their shareholdings, etc to any third party. h. The Respondent relied upon on judgements of Hon'ble Supreme Court's in IBH Health Vs. Info-Drive Systems (CA No. 8230/2010), wherein the Hon'ble Chief Justice Sri Kapadia made the following observations: The Company Court cannot be 'maliciously' used as a 'debt collection agency&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vide citation (1988) Comp Cas 581 (Kar), ILR 1987 Karnataka 2496. In this case, the main issue was the appointment of provisional liquidator u/s. 433 of Companies Act, 1956. The Hon'ble High court of Karnataka has considered various issues arise out of Winding up petitions. The Hon'ble High court has referred various decisions/judgements of various courts including National and international. One of the judgements referred in this case, which is some extant relevant to the present case is Madhusudhan Gordhanadas and Co. V. Madhu Wollen Industries P. Ltd. wherein it is inter alia held ' Where the debt is un-disputed, the court will not act upon a defence that the Company has the ability to pay the debt but the Company chooses not to pay the particular debt'' Another finding given in this case relates to maintaining a Civil Suit and Winding up proceedings and held it there is no bar for it. Limitation issue with reference to acknowledgement of debt in balance sheet and the relevance of facts stated on the date of filing petition/instituting a case would have any bearing on the subsequent change of facts and law on the issue etc. As stated above, thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned counsel further submit that Petitioner has not come to this Tribunal with clean hands as she has suppressed several material facts so as to create factious cause of action to file the present petition. The Petitioner has gone to the High Court seeking to wind up the Company in order to satisfy her selfish ends. However, for the reasons best known to the Petitioner, She has withdrawn the petition and subsequently filed the present petition. The Petitioner even did not state her status in the Respondent No. 1 Company, and tried to show her daughter in the records of the Company by manipulating the records. 9. The Learned Counsel further states that the Petitioner herself along with her husband suffered an order passed by DRT as mentioned above and also avoiding to repay the amounts as ordered by the DRT. But she is trying to malign the Respondent Company and filing frivolous complaints against the Company. 10. The Learned Counsel also relied up on the judgment of the Hon'ble Principal Bench rendered in Nikhil Mehta Sons (HUF) Others Vs. AMR Infrastructures Limited. This case was also instituted by a Financial Creditor. The Hon'ble Tribunal, after di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding up for discharge of that liability? In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt. A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The Company Court, at that stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. It is settled law that if the creditor's debt is bona fide dispute on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding up procedure.' 15. As per section 7(5) of Insolvency and Bankruptcy Code, 2016, one of the ingredients to initiate insolvency resolution process is that a 'default' should have occurred. As per section 3(12) defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/-, Dr. B.V.S. Lakshmi ₹ 10,17,086/-. c) So as per the above documents filed by the petitioner herself shows loan outstanding/payable to her is only ₹ 10,17,086/-. d) The legal notice dated 7th September, 2016 got issued by Counsel for the petitioner stated that the petitioner was shareholder and creditor of the Company and alleged several acts of oppression and mis-management on the part of Niyaz Ahmed and Kedarnath. And without giving any details of dues, has claimed for a total amount of ₹ 91,47,864/- basing on Annual audited accounts. 17. The petitioner has filed Articles of Association of Respondent Company (page 20 of material papers) in which, it is falsely shown P. Kedarnath and B. Kalayana Hyma as First Directors of the Company. However, by perusal of the original Memorandum and Articles of Association of the Company evenly dated 03.01.2006 (page No. 15 to 31 of material papers) Page 19 and internal page 5 of Memorandum of Association Articles of Association at page No. 31, internal page 12 of Articles, filed by the Respondent Company, clearly shows that the first directors are Pulipaka Kedarnath and B.V.S. Laxmi and not Hyma as claimed. How ..... X X X X Extracts X X X X X X X X Extracts X X X X
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