TaxTMI 
TaxTMI 
2009 (4) TMI 447
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....ction 439(1) read with the relevant Company Rules had been originally instituted by the petitioner describing itself as a company. Later, on objections on behalf of the respondent, an amendment had been made describing the petitioner as a proprietorship having its office in Los Angeles and represented through a constituted attorney and agent Sh. S.K. Verma. The basis of the claim was for value of goods supplied to the respondent-company and at the time of filing of the petition, the petitioner had complained that the respondent-company was indebted to a sum of US $ 91,702.72 with interest. The petitioner had also spelt out the details of the invoices for the goods supplied. Prior to the filing of petition also, there had been exchange of communication when by a letter dated 10-4-1997, the respondent-company admitted the reference to the invoices and the amounts mentioned under the respective invoices as having been finalized and while admitting its liability, the company stated in the following words :- ". . . . Due to the new Budget, the situation in the market is showing signs of improvement, we are very hopeful that we should be able to release all your dues by end of next qu....
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....ourt was pleased to direct the respondent-company to pay Rs. 5 lakhs to the petitioner without prejudice to the rights and contentions of the respondents. This order was challenged in appeal by the company before a Division Bench but the Division Bench refused to interfere with the order upon which ultimately the respondent-company made the payment of Rs. 5 lakhs. This payment, which was made on 22-1-2007 was not allowed to go unchallenged and the respondent-company filed C.A. No. 95 of 2007 seeking for a direction to the petitioner to put the money back, since according to the respondent-company, the petitioner represents the general body of creditors and while asking the petition for winding up, the money shall not be allowed to be retained by the petitioner-company itself. The learned senior counsel appearing for the respondent-company urged that even the petition for winding up ought not to be taken up without directing the petitioner-company to repay Rs. 5 lakhs, which was paid by the respondent-company. VI. Twin objections by the company 6. Before me, on a pointed reference by the learned senior counsel appearing for the petitioner to the admissions made by the responde....
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....ersons, be it known, that I, Roger Paul Berg, of Sound Fibre as Grantor, do hereby make and grant a limited and specific power of attorney to Mr. S.K. Verma of Sneh International and appoint and constitute said individual as my attorney in fact. My named attorney in fact shall have full power and authority to undertake, commit and perform only the following acts on my behalf to the same extent as if I had done so personally; all with full power of substitution and revocation in the presence: (describe specific authority). Mr. S.K. Verma of Sneh International, 502-503, Shahpuri Tirath Singh Towers, C-58, C-Block, Community Centre, New Delhi, India is authorized to file and fight the cases on behalf of Sound Fibre in Indian Courts. I ratify and endorse all of his actions that he has taken pursuant to my earlier power of attorney, dated 6-5-1998." 9. It may be noticed that the second document specifically ratifies and endorses all the actions that the power of attorney has taken pursuant to the earlier power of attorney dated 6-5-1998. It could further be seen by reference to documents filed that it is the very same power of attorney, Mr. S.K. Verma, who has issued a notice p....
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.... authorized to do. These decisions, in my view, however, do not lend support to the extreme position canvassed by learned senior counsel for the respondents. On the other hand, the power of attorney granted sets out a larger boundary for the agent to traverse, when it describes not merely to a specific act of institution of suits for recovery of money as done in the Bombay High Court case cited above but sets out, "to file and fight the cases on behalf of Sound Fibre in Indian Courts". This expression is wide enough to describe every form of legal fight that could include even a petition for winding up of the company. Even otherwise, I do not feel obliged to accept any interpretation that could be placed in the decision in Shantilal Khushaldas & Bros. (P.) Ltd.'s case (supra) of the Bombay High Court which might fetter institution of a petition for winding up. In my view, the said decision adopts narrow construction, which could only aid unhealthy and unethical defences to be taken, when there is a clear mandate to an agent to do every act that is necessary for recovery of monies. I am unable to persuade myself to a reasoning that a proceeding for recovery of money could not be und....
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....statement shows some profits as having been posted would be a complete answer in all cases to stave off a petition for winding up would be at complete variance to the clear legislative intent and the language employed under the relevant provisions of the Companies Act. Every company that posts profits in its account statement cannot be taken up at its face value, if the recent incidents of massive corporate frauds afflicting the Indian Corporate World is any lesson to us. It has not just happened in India. What was SATYAM in India was CENTRO in Australia or ENRON in US. The bankruptcy of a company could be concealed by a clever manoeuvres but the acid test always is that when a demand is made for recovery of sums due by a creditor and if the company is unable to pay and states in unmistakable terms that it was passing through financial crunch that makes it impossible to accommodate the request for payment, it is as clear as sunlight that the company is in financial doldrums. Even otherwise, a company that has stacked its funds in bank or in the pockets of its directors cannot deny to a creditor what is justly due and defy, if such a creditor makes his demand that the remedy shall b....