TaxTMI 
TaxTMI 
2007 (4) TMI 366
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....oduction of the original Bills of Lading." The request contained in the other three letters of indemnify (bearing Nos. 1065, 1066 and 1309) was similar, save and except that the Ports of delivery were referred to therein as Chennai and Karwar. Each of the documents of indemnity executed by the respondent indemnified the petitioner in the following terms : "1. To indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expenses of whatsoever nature which you may sustain by reason of the vessel proceeding and giving delivery of the cargo in accordance with our request. 2. In the event of any proceedings being commenced against you or any of your servants or agents in connection with the vessel proceeding and giving delivery of the cargo as aforesaid to provide you or them on demand with sufficient funds to defend the same. 3. If, in connection with the vessel proceeding and giving delivery of the cargo as aforesaid, the ship or any other ship or property belonging to you should be arrested or detained or if the arrest or detention thereof should be threatened to provide on demand such bail or other security as may be req....
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....ank of Saurashtra. On 15-1-2001, Mr. Justice Thomas in the Queen's Bench Division upheld the defence of the Bank of Saurashtra that the signature of its officer (on the indemnity which was furnished by the respondent) was a forgery and that consequently, an action against the Bank could not be maintained. Thereupon, on the foundation of the obligation of the respondent under the Letters of Indemnity, the petitioner instituted proceedings against the respondent in June 2003 in the High Court of Justice, Queen's Bench Division (Commercial Court). The respondent was duly served with the proceedings, but failed to respond or to file a defence in the Court in England. In September 2003, the petitioner moved the English Court for permission to apply for a Summary Judgment under Clauses 24.1 and 24.2 of the English Civil Procedure Rules. Intimation of the proceeding, which was fixed for hearing on 13th January, 2004, was served upon the Company by the petitioner's lawyers in England by a letter dated 8-10-2003. The company failed to appear in the proceedings in England. By a judgment and order dated 13-1-2004, the English Court granted to the Petitioner a Summary Judgment in the sums of U....
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....y is unable to pay its debts and in determining this Court has to take into account all contingent and prospective liabilities of the Company. Section 439(1)(b) contemplates an application to the Court for the winding up of a Company by a petition presented by any creditor or creditors including any contingent or prospective creditor or creditors. The petitioner is justifying in asserting its locus as a creditor of the Company on the strength of the decree of the English Court. Once the locus of the petitioner as a creditor of the Company on that foundation is established, the Court would then have to assess whether an inability to pay its debts on the part of the Company has been established with reference to the provisions of section 433(e) read with clause (a), (b ) or (c) of sub-section (1) of section 434. That such a Petition for winding up would be maintainable on the basis of a judgment of a foreign court also emerges from a judgment of Hon'ble Mr. Justice N.D. Vyas in Silver Shield Construction v. Recondo Ltd. [1994] 15 CLA 92 (at pp. 94-95). 6. The petitioner called upon the respondent to fulfil its obligation in terms of the indemnity by communications dated 28-7-2000 an....
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.... Shri Vaidya on the Letters of Indemnity was forged. The petitioner had obtained permission to serve the proceedings out of jurisdiction on the bank in India. The bank contended that it was not bound by the Letters of Indemnity as the signature of its officer was forged and, therefore, the English Court had no jurisdiction. The judgment demonstrates that upon considering the evidence on record, the Court in England held that the signature of the Bank's officer was a forgery and that being the position, the service of proceedings on the Bank would have to be set aside. The bank was held not to be a party to the letter of indemnity and in those circumstances, the action against the Bank came to be dismissed. That however, has no bearing on the nature of the action brought by the petitioner against the respondent herein. The Letters of Indemnity provide in clause 5 that the liability of each and every person under the indemnity shall be joint and several and shall not be conditional upon the petitioner proceeding first against any person whether or not such person is a party to or liable under the indemnity. The decision of the English Court in the action brought against the bank was ....
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....endant chooses to remain ex parte and to keep out, it is possible for the plaintiff to adduce evidence in support of his claim (and such evidence is generally insisted on by the Courts in India), so that the Court may give a decision on the merits of his case after a due consideration of such evidence instead of dispensing with such consideration and giving a decree merely on account of the default of appearance of the defendant. In the former case the judgment will be one on the merits of the case, while in the latter the judgment will be one not on the merits of the case. Thus it is obvious that the non-appearance of the defendant will not by itself determine the nature of the judgment one way or the other. That appears to be the reason why section 13 does not refer to ex parte judgments falling under a separate category by themselves. . . ." (p. 2143) 10. Finally, it would be necessary to advert to the pleadings contained in paragraphs 21 and 22 of the Company Petition in which the following averments have been made in regard to the financial status of the respondent herein : "21. That the petitioner is given to understand that the Company owes substantial amounts to its vari....
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....galore and Cochin during that year, (f )that the Company's Bankers' and other parties had filed complaint against the Company and its management with the Economic Offences Wing, Mumbai Police, (g )that the Company's cash flows were negligible and effectively negative, (h)that the Company's current assets were negative at Rs. 153.76 crores, (i )that a single foreign creditor, Shweta International Pte. Ltd., had filed Civil Suit against the Company for recovery of Rs. 140 crores or thereabouts, (j )that the Company's liabilities to creditors/customers alone (excluding Bankers and others) was approximately Rs. 166 crores, (k)that the Company's liability to its Bankers and other secured creditors amounted to Rs. 49.07 crores. That to secure these creditors, the Company had created security by way of hypothecation of stocks and by way of equitable mortgage of land and building, godown and other immovable properties of the Company. It appears that the assets of the Company are mortgaged and/or charged in favour of the Company's Bankers and there are no substantial assets available for recovery of the debt due to the Petitioner. (l )that the Company's Bankers, State Bank of Saurash....