TaxTMI 
TaxTMI 
TaxTMI 
2009 (7) TMI 761
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....22 of the Sick Industrial Companies (Special Provisions) Act, 1985, with liberty to file application as and when finality is arrived in the case before the BIFR. 3. It appears that, subsequently, the respondent-company under liquidation has been discharged by the BIFR by an order dated 9-5-2006, and in C.A. No. 1410 of 2008, this court, by order dated 25-4-2008, has directed revival of C.P. No. 115 of 2002 at the stage where it was left and notice was directed to be served on the respondent returnable in six weeks time. In spite of the notice having been served on 26-6-2008, there was no representation and consequently, this court, by an order dated 22-7-2008, has passed an order reviving the company petition, admitting the same and ordering notice to the Registrar of Companies and affixture of notice at the premises of the registered office of the respondent-company, apart from publication in the Tamil daily Daily Thanthi and English daily Hindu Business Line. In the said order, the official liquidator, High Court, was appointed as the provisional liquidator of the respondent-company, directing the ex-directors to file a statement of affairs before the official liquidator within ....
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....port prepared was forwarded by the petitioner to their counter part to obtain the financial sanction from BHF Bank. It is the case of the petitioner that it was based on the agreement the petitioner has prepared the project reports, etc., for getting order for sanctioning loan and ultimately the BHF Bank has sanctioned loan on 15-6-2000 and the respondent was directed to furnish the bank guarantee and was also directed to get the Reserve Bank of India's clearance. 8. It is the case of the petitioner that as per the subsequent terms of contract, the respondent had to pay 1 per cent of the value of the term loan sanctioned by the foreign bank. It is the case of the petitioner that the respondent has requested the petitioner to wait till the formalities regarding bank guarantee and clearance from the Reserve Bank of India are obtained and such assurance was given by letter dated 28-4-2000. It is the case of the petitioner that the petitioner has fulfilled all the obligations as per the terms of the contact and therefore, the respondent-company is liable to pay 1 per cent of the loan amount sanctioned and the said amount comes to Rs. 37 lakhs. In spite of several reminders, there was ....
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....n of Mr. Ravi, learned counsel for the petitioner that as per the terms of the agreement between the parties, even though all the terms have not been specifically put in writing, the respondent-company, by its letter, has clearly accepted its obligation to pay 1 per cent of the total loan towards the charges to the petitioner for arranging the loan and in such circumstances, when it is admitted that such loan has been arranged from a foreign bank and the further requirement was only on the part of the respondent-company in fulfilling certain requirements like that of furnishing bank guarantee and obtaining clearance from the Reserve Bank of India, it is for the respondent to fulfil such requirements and when once the arrangement for loan has been fixed by the petitioner, the petitioner's duty comes to an end and the obligation on the part of the respondent to pay the amount becomes outstanding. He would submit that, in such circumstances, in spite of repeated demands amount due has not been paid and therefore, it is a case which is covered under section 433(e) of the Act. 12. On the other hand, Mr. M.S. Krishnan, learned senior counsel appearing for the respondent-company has subm....
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....ircumstances when a company is deemed unable to pay its debts. The said section is as follows : "Section 434.Company when deemed unable to pay its debts.-A company shall be deemed to be unable to pay its debts- (a)if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding one lakh rupees then due, has served on the company, by causing it to be delivered as its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor; (b)if execution or other process issued on a decree or order of any court or Tribunal in favour of a creditor of the company is returned unsatisfied in whole or in part ; or (c)if it is proved to the satisfaction of the Court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company. (2) The demand referred to in clause (a) of sub-section (1) shall be deemed to have been duly ....
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....with your cheque/demand draft for Rs. 2 lakhs (towards the advance) payable in favour of our company at Chennai." 18. It is true that based on the said letter the respondent-company, by its communication dated 5-2-2000, has enclosed a cheque for Rs. 2 lakhs drawn on the Canara Bank in favour of the petitioner towards non-refundable retainer fee payable in advance. In the said letter, the respondent has stated that the professional fees payable to the petitioner is 1 per cent of the total loan funds to be organised. The contents of the letter are as follows : "We enclose a Canara Bank cheque No. 453945 of date for Rs. 2,00,000 (rupees two lakhs only) towards non-refundable retainer fee payable in advance and towards the preparation of detailed business plan for our short-term and long-term funds. As per our personal discussion and also re-confirmed through telecom the professional fee payable is 1 per cent of the total loan funds to be organised by your goodselves." 19. While it is not difficult to appreciate that the respondent, as per the proposal made by the petitioner dated 4-2-2000, has sent non-refundable retainer fees of Rs. 2 lakhs, by the letter of the respondent dated ....
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....ng the loan, since the clearance from the Reserve Bank of India has not been obtained and the bank guarantee has not been furnished. 22. For a legal notice issued on behalf of the petitioner dated 26-12-2000, demanding the amount of Rs. 37 lakhs, in the reply notice issued on behalf of the respondent dated 16-1-2001, it was the stand of the respondent that the letter dated 4-2-2000, was not a concluded contract and even if it is accepted that the respondent is liable to pay 1 per cent towards the professional fees, the same is subject to the availing of first instalment of loan and therefore, in the reply, the respondent has raised an issue that the petitioner has not performed its obligation. It is the case of the respondent that there has been no formal contract and equally there is no obligation on the part of the respondent to avail the loan. 23. The question whether the petitioner is entitled to receive the amount of Rs. 37 lakhs from the respondent as per law is different from the respondent's liability or indebtedness to the petitioner so as to enable the petitioner to invoke section 433(e) of the Act to wind up the respondent-company, on the basis of inability to pay debt....
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....any on those facts is not possible. 26. Law is well-settled in the field of contract that mere making an offer, by which the offeror signifies his desire to do something or not to do something with an intention that the person to whom such desire is intimated should accept, itself is not sufficient unless such offer is accepted by the offeree in full form, without making any counter offer. In the present case, when once the petitioner has made an offer in his letter dated 4-2-2000, offering to arrange a loan for the respondent on certain conditions, including the payment of 2 per cent as its professional fees, that offer is deemed to have been accepted only if the entire terms are agreed upon by the respondent so as to give rise to an agreement which is enforceable at law. In the present case, while the respondent has paid the initial non-refundable amount of Rs. 2 lakhs pursuant to the offer made by the petitioner dated 4-1-2000, in respect of the payment of the professional fee, which is the crux of the issue, the respondent has not accepted to pay 2 per cent of the loan amount as the professional fee and on the other hand, they have made a counter proposal to pay 1 per cent of ....
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.... mind, viz., when the counter-offer was made by the respondent and whether the unilateral offer amounts to acceptance by submitting the tenders by the appellant to the board. We find that it does not amount to acceptance of counter proposal. It is seen that admittedly, clause (10) which thrusts responsibility on the first respondent was deleted in the counter-proposal. In clause 12, for joint responsibility unilateral liability was incorporated. In other words, the respondent disowned its material responsibilities. Unless there is acceptance by the appellant to those conditions no concluded contract can be said to have emerged. It is seen that the appellant is a Government undertaking and unless contract is duly executed in accordance with the articles of association, the appellant is not bound by any such contract. Shri Nariman sought to rely on the passage from Palmer on Companies Law containing that it is an indoor management between the appellant and its officers. When the negotiations were undertaken on behalf of the appellant, the respondent was led to believe that the officer was competent to enter into the contract on behalf of the appellant. When the counter-proposal was s....
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....itioner. 30. It is also well-settled that a winding up petition cannot be used as a method for the purpose of making recovery of any amount due, which is otherwise enforceable as per the due process of law. In Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456, the three-judge Bench of the Apex Court has held as follows : "It is well-settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the court." (p. 463) 31. In Pradeshiya Industrial and Investment Corporation of Uttar Pradesh's case (supra), the Apex Court has again reiterated that the winding up petition is not a step taken to enforce payment of debts in respect of which bona fide dispute has been raised by a company, by referring to the judgment in Amalgamated Commercial Traders (P.) Ltd.'s case (supra). The Apex Court has held as under : "It is beyond dispute that the machinery for winding up will not be all....