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TMI Blog2016 (3) TMI 1463X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby its petition under Section 433(e) and (f) as well as Section 434/439 was dismissed. The appellant/petitioner is the transferee/assignee of a debt by the Kotak Mahindra Bank, which in turn was the assignee of the respondent company's original creditor/Industrial Development Bank of India (IDBI). 2. The brief facts are that the IDBI had entered into a Rupee term loan agreement on 07.10.1996 with the respondent (hereafter referred to as "the company") for a sum of Rs. 367 lakhs and disbursed substantial amounts. On 06.11.1996, the company also entered into a foreign currency loan agreement for the equivalent of Rs. 181 lakhs. Here again, substantial amounts were disbursed by the IDBI. On 10.06.1998, the IDBI called upon the company to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bts Due to Banks and Financial Institutions Act, 1993, does not cover it. 3. The appellant issued a statutory notice to the company on 23.12.2010 under Section 434(1)(a) calling upon it to pay the sum of Rs. 28,99,00,000/- together with interest. Upon inaction by the company, the appellant instituted winding-up proceedings. 4. The company Court initially was not inclined to issue notice on the petition having regard to the earlier round of litigation between the company, the present appellant and predecessors-in-interest, i.e. IDBI and later Kotak Mahindra Bank. However, upon statement on its behalf that it would confine its claims to the OTS amount relied upon by the company, notice was issued on 24.05.2012. On 26.08.2012, a direction wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. Although, the pleadings filed by the petitioner does mention that the respondent has not commenced its business, the focus of the petition is not that the respondent is liable to be wound up on account of non-commencement/suspension of business. The petitioner had confined the petition only to a claim of debt, at the time of issuance of notice. This by itself would be reason enough for not permitting the petitioner to urge that the respondent has lost its substratum and should be wound up on account of its failure to commence business. Having stated the above, I deem it appropriate to also consider the merits of the said contention. 16. In order to consider whether a company should be wound up under Section 433(c) on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reby an admission was made with respect to payment of Rs. 250 lakhs, the learned Single Judge fell into error in rejecting the petition. It was submitted that even without recourse to the deeming provision with respect to the company's inability to pay debt, the learned Single Judge ought to have held that the respondent company was unable to pay the debts on the face of the record. It was emphasized that the company has no means to repay the debts and has no cash flow. It is urged that the learned Single Judge's observations that the question of interest and the rate being one of dispute and a mixed question of fact, is erroneous. The appellant points out that the secured creditor has a right to claim contractual rate of interest. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the court." 10. This Court, in Agro Anlagewbau GmbH v. Orient Ceramics & Industries Ltd [1986] 60 Com Cas 691 (Del) observed that the winding up jurisdiction is not to be use as an arm-twisting device to compel a company to pay up a claim, which it is unwilling to pay for. In IBA Health (India) (P) Ltd. v. Info-Drive Systems Sdn. Bhd, (2010) 10 SCC 553 the position was again reiterated by the Supreme Court as follows: "The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding up petition as a means of forcing the company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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