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TMI Blog2019 (1) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at Indore Road, Khandwa. 3. The respondent-company was requested to provide financial and commercial support to enable it to repay the loan of I.T.C. Limited and run the plant at maximum capacity in order to earn revenue. An agreement dated 09-09-2011 was entered into between the parties whereby the petitioner-company provided financial facility of Rs. 50 lacs (Fifty lacs) to the respondent-company as loan for maintaining the plant for next season and Rs. 1 crore 40 lacs towards repayment of existing loan from ITC Ltd. In total Rs. 1 crore 90 lacs was extended by the petitioner to the respondent-company. 4. Shri Vijayesh Atre, learned counsel for the petitioner contended that the entire financial facility aforesaid was secured by respondent-company by executing necessary charge documents mortgaging its assets in favour of the petitioner-company including deposit of two original title deeds of 20-06-2012 in relation to its industrial loan situated at Pahan, Khandwa. For this purpose, a memorandum of equitable mortgage dated 07-06-2012 was executed by the respondent-company. The necessary charge documents were filed by the respondent-company before the Registrar of Companies (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire loan before last date aforesaid. The respondent company did not make any payment. 8. The stand of the petitioner-company is that on 31-03-2016 (Ex.P/9), the petitioner-company requested the respondent to confirm the balance outstanding of financial assets. In turn, respondent-company acknowledged and confirmed the credit balance of Rs. 3 crores 90 lacs as on 31-03-2016. Great emphasis is laid by Shri Atre on this "confirmation slip" wherein it is mentioned that "we confirm the credit balance of Rs. 3 crores 90 lacs as on 31- 03-2016 as per the books of M/s. K.N. Resources Ltd., Raipur." Learned counsel for the petitioner submits this document makes it clear that it is a case of admitted debts. In spite of such admission of debts, no efforts were made to clear the outstanding loan. The petitioner having left with no option, sent a statutory legal notice dated 28-07-2016 (Annexure P/10) to the respondent-company for repayment of entire some of Rs. 3 crores 90 lacs within a period of 21 days. The said notice went in vain and was not responded by the other side. 9. It is further argued by the petitioner that all the registered companies in India are under a statutory obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. vs. Info-Drive Systems SDN. BHD.). Lastly, it is contended that Section 434 of the Act raises a legal fiction as to when company would be deemed to be unable to pay its debts. To buttress this contention, (2009) 3 SCC 527 (Vijay Industries vs. Natl. Technologies Ltd.) is relied upon. 12. Sounding a contra note, Shri A.T. Faridi, learned counsel for the respondent-company relied on various paragraphs of the reply. It is stated that a separate preliminary objection regarding maintainability of this petition was separately filed. The agreement dated 09-09-2011 was executed between the petitioner and the respondent-company whereunder certain obligations and duties were agreed to be performed as per agreement of both the parties in order to ensure smooth transaction of respondent-company. The respondent cannot be treated as an "inactive" or "dormant" company. In the reply, the respondent reiterated that it is a running unit managed by both i.e. petitioner and respondent and outcome of transaction of the respondent-company was being shared and adjusted as per various clauses of agreement executed on 09-09- 2011. 13. The respondent-company placed reliance on said agreement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its debts as per Section 433(e) of the Companies Act. It is noteworthy that in Para 8 and 11 of the reply, it is pleaded that the respondent has already repaid some amount towards loan. However, the amount of such repayment has not been disclosed by the respondent in both the paragraphs. There are blank places which were required to be filled up to show the alleged amount of repayment but in the said paragraphs the blank space were not filled up. 15. Learned counsel for the respondent relied on Annexure R/3, R/4 and R/5 relating to purchase of Soya by petitioner-company between 08-11-2011 to 31-03-2013 and aruged that since the entire venture was a joint one between the petitioner and the respondent, respondent alone cannot be blamed for any failure. As per the agreement after purchase of Soya Seeds, Processing was to be done by the respondent-company and it did the same which is clear from documents (Annexure R/6). Shri Faridi submits that the petitionercompany should have produced the Balance Sheets, Accounts, Bank Statement transaction between 2011 till filing of this petition to clarify the entire picture but the petitioner has not filed the same which is bad in law. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner filed synopsis and supplied a compilation of judgments of Supreme Court which are mentioned hereinabove whereas learned counsel for the respondent-company filed a compilation of aforesaid judgments. 18. In the rejoinder submission, Shri Atre urged that the statutory certificates which are filed with company petition leaves no room for any doubt that debt is admitted. The said certificates were issued as per the information furnished by the respondent in the prescribed form and, therefore, there is no ambiguity on the question of quantification of actual debt. By placing reliance on Section 210 of the Act and previous order of this Court, it is argued that this Court has overruled the preliminary objection of the respondents and rejected the application for production of record. The respondent is the custodian of said records and it should have filed the same if it had any intention to rely on them. 19. Parties confined their arguments to the extent indicated above. 20. I have bestowed my anxious consideration on the rival contentions of the parties and perused the record. 21. As noticed, parties are at loggerheads on the question whether the debt is undisputed, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khasra No.25.1,26/1,27/1,25/2, 25/3,26/3 and 26/4 Pahani No.77 Khandwa Another Similar declaration can be seen which reads as under:- 15. Short particulars of the property or asset(s) charged (including complete address and location of the property) (i) Charge by mortgage on the fixed assets including land, building, plant & machinery of the Company situated at Khasra No.25.1,26/1,27/1,25/2,25/3,26/3 and 26/4 at P.H. No.77 Khandwa (d) Extent and operation of the charge Charge on fixed assets including land and building, plant and machinery of Khalsa Overseas Limited located at chhegoan makhan Khandwa-Madhya Pradesh in favour of KN Resources Pvt. Ltd., Raipur-Chhatisgarh 23. As per the modification prayed for from time to time by respondent, the certificates were issued by the Competent Authority. The last certificate (Annexure P/6) shows that additional financial assistance of Rs. 81 lacs over and above to Rs. 390 lacs of existing financial assistance was created on 01-10-2014. This certificate is issued as per the information furnished by respondent-company itself. (Page 9). The information supplied in the statutory form shows that the entire dues were required to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding-up order needs to be passed. Where there exists no dispute that the respondent-company has passed the creditor a debt which entitle him for a winding-up order, appropriate order can be passed. 26. The respondent-company after having issued the confirmation slip and filling up the statutory forms, cannot take a defence that the amount is disputed. Hence, this Court is unable to hold that defence of respondent-company is in good faith. In Vijay Industries (supra), in no uncertain terms, it was made clear that where the dues as regards the principle amount stands admitted, yet a question is raised as to whether any agreement had been entered into for payment of interest etc. or not, the application for winding-up cannot be dismissed. 27. In IBA Health Pvt. Ltd. (supra) the expression "bonafide dispute" was clarified by holding that it implies the existence of a substantial ground for dispute. Where the Company Court is satisfied that a debt upon which a petition is founded is a hotly contested debt and also doubtful, the Company Court should not entertain such a petition. The Company Court is expected to go into the causes of refusal by the company to pay before coming to that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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