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TMI Blog2019 (3) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... nd confirmed the Award rendered by the sole arbitrator dated 24 March 2014. 2. The Respondent Karvy Financial Services provides financial facilities. The Appellant Nirved Traders and M/s. Birla Power Solutions approached the Respondent-Karvy Financial Services for a loan. The business loan agreement was executed on 19 December 2011. The Respondent lent a sum of Rs. 23,00,00,000/-. The immovable property of these Borrowers was mortgaged as a security for the loan. The Borrowers defaulted in repayment. The Respondent terminated the loan account on 24 May 2013 and called upon the Borrowers to pay the overdue amount of Rs. 23,88,94,372/- along with interest. The Borrowers did not repay the loan. The Respondent invoked the arbitration clause, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed raising the same legal issues as in the present Appeal. By the judgment and order dated 14 January 2016, the Appeal Bench, dismissed the Appeal. The Apex Court dismissed a Special Leave Petition filed by the Appellants on 25 August 2017. 7. In this backdrop, Mr. Kamat the learned Counsel for the Appellants advanced a single submission as enumerated in clause 'Q' of the Appeal. He stated that the Birla Power Solutions was wound up on 28 August 2014 by the Company Court and the Company Petition was presented on 8 May 2013. He contended that as per Section 441(2) and 446(1) of the Companies Act, 1956, the date of winding up relates to the date of presentation of the Company Petition. He submitted that therefore, for want of complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make any specific reference to Section 446. Section 446 comes into play when an order of winding up is passed. The object of this provision is to protect and realize the assets of the company under winding up to avoid needless litigation and so that all matters in dispute can be disposed of by the Company Court. Section 441, on the other hand, is intended to avoid fraudulent disposition of property by the Company. The deeming fiction introduced is to ensure that the creditors are not defrauded by the disposition of the property by the directors in the meanwhile when ultimately the winding-up order is passed. Thus, when the order of winding up is passed, the disposition of property made from the date of the presentation of the Petition come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition was not filed by the Respondent. The grounds that have been taken before the learned Single Judge in the Arbitration Petition are only regarding insufficiency of stamp, novation, execution of Memorandum of Understanding, mortgage. There is no reference at all in respect of the pendency of the Company Petition for winding up and the consequences of Section 441(2) and 446(1) of the Companies Act. 12. Having not disclosed the factum of the pendency of the Company Petition to the Arbitrator and not disclosed the order of winding up to the learned Single Judge hearing the Arbitration Petition, the Appellant cannot turn around and seek to invalidate the Award on the ground of non-compliance of Section 446. The Birla Power Solutions is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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