TMI Blog2019 (5) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that respondent continues to remain liable to return the land or to pay to the petitioner a sum of ₹ 19,42,500/-. In my opinion, there is no bona fide defence raised by the respondent company. Under Section 433(f) of the Companies Act, where a court is of the opinion that it is just and equitable, a company may also be wound up - In the present case clear allegations have been made by the petitioners that the petitioners own 22,99,400 shares in the respondent Company. That apart, a total of 59,81,900 shares are owned by the JVG Group of Companies in the respondent company which companies are also in liquidation. Despite having such a large shareholding, no notices are being sent to the Official Liquidator, who is now the Liquidator of the aforenoted various companies, about holding any meetings or sending copies of any balance sheets, annual accounts etc. It is clear that the respondent Company is acting in a manner which is prejudicial to its shareholders and to the affairs of the company. The full facts and circumstances of the case would justify the passing of a winding up order. The Official Liquidator attached to this Court is appointed as the Provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foods Ltd. Petitioner No.2 is holding 4,24,000 shares and JVG Farm Fresh Ltd. is also holding 4,24,000 shares in the respondent company. 3. The petition also points out that SFIO after investigating the affairs of the JVG Group of Companies concluded that JVG Finance Ltd. i.e. petitioner No. 1 was being operated as a flagship of the JVG Group of Companies. Further, SFIO notes that in the year 1996-97, there was siphoning of funds of the JVG Group of Companies for the purpose of acquiring land in District Gurgaon. Large tracts of lands in different villages of District Gurgaon and Mewat were purchased from the funds of petitioner No.1 in the name of other group of companies. As per the report, land measuring 3 Kanal 14 Marlas was purchased for a consideration of ₹ 19,42,500/- in the name of the respondent Company from the funds of JVG Finance Ltd. Till date, the respondent company did not return or refund the said amount to JVG Finance Ltd. Hence, the respondent Company remains a debtor to the tune of ₹ 19,42,500/-. 4. It has also been pleaded that the affairs of the respondent Company are being conducted in such a way which is prejudicial to the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Ltd. on 19.11.2012. He states that the act of renaming the respondent company to M/s Golden Gate Industries Ltd. was a deliberate attempt of the respondent as it was done with the purpose of only to reflect that M/s Golden Gate Industries Ltd. was not associated with JVG Group. It was also an attempt to misappropriate the property at 51, Marol Industries Area situated within the limits of Mulgaon Taluka Andheri Mumbai. It is also pleaded that under the Companies Act, a company may change its name only by a special resolution and with the approval of the Central Government signified in writing. He states that Mr. V.K. Sharma who has been a major shareholder in JVG Industries Ltd. was nowhere involved at any stage in the process of name change. Petitioner No.1 the Flagship of JVG Group of Companies, a major shareholder, never received any notice of any annual general meeting or any extra ordinary general meeting of JVG Industries Ltd through the said period. It is also stated that one Mr. S.L. Maloo in connivance with some person forged the signature of Mr. D.K. Aggarwal, (the then Director of M/s JVG Industries Ltd., now expired) and Smt. Namrata Kishan (the then Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alongwith equity shares and assets have been sold on consideration to Yare Engineering Private Limited and its associates. This certificate also states that the previous year s book entries are not debt due by the company and hence written off as per decision of the Board of Directors. It is pleaded that on account of this resolution the outstanding entries as shown in the books of account no longer exist and can no longer be a subject of winding up proceedings. (iii) It was thirdly pleaded relying upon order dated 27.11.2010 passed in CP 265/1998 regarding JVG Finance Limited that the learned counsel for the main promoter Shri V.K. Sharma had made a statement that the property in question at MIDC Industrial Area, Marol, Andheri, Mumbai belongs to JVG Industries Limited i.e. the respondent and was not purchased from the funds of JVG Finance Limited. It is pleaded that this was an admission on the part of the Ex. Directors that the property in Mumbai is bought from the funds of the respondent company only. To a query from the Court she has pleaded that the company was bought by the present Management from Shri V.K. Sharma in 2007. 11. Learned counsel appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 01.01.2007 -sd- Upender Singh Director 14. It is not clear as to how this document absolves the liabilities stated in the Statement of Account of the respondent company. Merely because the shares of the respondent company were sold by some of the promoters to the present Management does not wash away liability of the respondent company on account of inter corporate loan received from the petitioner company. 15. In my opinion, the balance-sheets of the respondent company, clearly and unequivocally demonstrate the dues payable to the petitioner company. 16. The other aspect as pleaded in the petition relates to purchase of the land in District Gurgaon and Mewat measuring 3 Kanal and 14 Marla for a consideration of ₹ 19,42,500/- for which funds were taken from JVG Finance Ltd. The respondent company continues to owe the said amount of ₹ 19,42,500/-. In this context reference may be had to the extracts of the SFIO report which reads as follows:- Chapter IV Finding No.1: Siphoning off funds to the tune of ₹ 16.29 crore through purchase of land in Distt. Gurgaon, Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. JVG Foods Ltd. 32 03 09 2,23,19,848 -do- 6. JVG Housing Finance Ltd. 27 01 12 1,90,44,730 -do- 7. JVG Farm Fresh Ltd. 18 05 10 1,42,26,010 -do- 8. JVG Hotels Ltd. 14 02 00 1,41,09,867 -do- 9. JVG Steels Ltd. 16 03 15 2,09,99,790 -do- 10. JVG Petrochemicals Ltd. 17 07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed under 17. It is clear from the SFIO report that the respondent company continues to occupy the said land purchased for ₹ 19,42,500/-. The respondent company continues to be liable to return the said land or the consideration received. This is a continuing cause of action. Hence, the question of limitation in this regard would not arise. 18. It is clear from the above acts of the respondent that respondent continues to remain liable to return the land or to pay to the petitioner a sum of ₹ 19,42,500/-. In my opinion, there is no bona fide defence raised by the respondent company. 19. In this context reference may be had to IBA Health (I) Pvt. Ltd. vs. Info-Drive Systems Sdn.Bhd., (2010) (4) CompLJ 481 (SC). The Supreme Court held as follows:- 17. The question that arises for consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 259. The Supreme Court after considering various case laws laid down the scope of just and equitable under section 433(f) of the Companies Act. The Supreme Court held as follows:- 33. ..Besides, it is only when shareholding is more or less equal and there is a case of complete deadlock in the Company on account of lack of probity in the management of the Company and there is no hope or possibility of smooth and efficient continuance of the Company as a commercial concern, there may arise a case for winding-up on the just and equitable ground .. 34. The principle of just and equitable clause baffles a precise definition. It must rest with the judicial discretion of the court depending upon the facts and circumstances of each case. These are necessarily equitable considerations and may, in a given case, be superimposed on law. Whether it would be so done in a particular case cannot be put in the straitjacket of an inflexible formula. 35. In an application of this type allegations in the petition are of primary importance. A prima facie case has to be made out before the court can take any action in the matter. Even admission of a petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court accepted that in case the company is based on the principle of quasi partnership, principles of dissolution of partnership shall apply and their application would depend upon facts in a given case recognizing that generally application in a particular case or in all cases creates problems and difficulties. It noted with approval the principles laid down by an English Court In Re. Yenidje Tobacco Company Ltd., reported as (1916) 2 Ch. 426 and other cases where aforesaid judgment is followed, laying down the proposition that in applying the principles of dissolution of partnership to companies, the following factors were important: (1) equal shareholding. (2) complete deadlock in the administration of the company. (3) lack of probity and mismanagement in the conduct of affairs of the company. 35. The court also agreed with the principles laid down by the House of Lords in the case of Ebrahimi Vs. Westbourne Galleries Ltd. (1973) AC 360 wherein after reviewing all the earlier cases it was held as follows: The foundation of it all lies in the words just and equitable' and, if there is any respect in which some of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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