TaxTMI 
TaxTMI 
2010 (10) TMI 910
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.... to as petitioning creditor and company respectively. 2. It appears that way back in 1987 an enquiry into the affairs of this company was being made by the Board for Industrial and Financial Reconstruction. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ("the SICA") enacted inter alia that a winding up application could not be filed or proceeded with during the pendency of proceedings before the said Board. This winding up application was filed on or about March 31, 1989 after such enquiry was commenced by the said Board. Therefore, the winding up application remained stayed. Now, on or about July 10, 2008 this company came out of the protection under the said Act. By another provision of the said Act the whol....
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....agement of Howrah Mills Co. Ltd. has taken over charge in April, 1987 but up till now several books and records of the company have not yet been handed over by your client... We are not aware of any open mutual current account stated to have been maintained by your client. The books and records of Howrah Mills Co. Ltd. which have been handed over by your client so far do not indicate that Howrah mills Co. Ltd. had maintained any open mutual current account with your client. The books of account, up to March 31, 1987, which have been handed over by your client and which were maintained by your client, suffer from several discrepancies... You have referred to 'agreement'. Please therefore, inform us about the date of such agreement a....
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....lso in their custody. Therefore we must know the period during which the claims mentioned in the letter have arisen and the documentary basis for such claims..." 7. It is absolutely plain that the company prior to April 1, 1987 had availed of accommodation provided by the petitioning creditor at 4 Clive Row, Kolkata-1 and availed of services from the company. This is evident from a contemporaneous letter of the company to the petitioning creditor dated May 15 1987 to the following effect. "Jardine Henderson Limited, 4, Clive Row, Calcutta700 001 Dear Sirs, Accommodation and service agreement Further to our discussions, we hereby confirm that we would not be availing the accommodation and connected facilities effective f....
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....The company has flatly denied that they have received the bills or that any amount mentioned there is payable. 10. While arguing the matter learned counsel for the company submitted that as the petitioning creditor was managing the company at that point of time they are in possession of the records of that period. In any event the company is not in possession of such records. Since the petitioning creditor was in management of the company it was possible for them to prepare false evidence of a claim. 11. It is very clear to me from the evidence that the petitioning creditor was in management of the company, substantially. The details of such service provided by the petitioning creditor are not available from the records of this case b....
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....mportant ground taken by the company to resist the claim of the petitioning creditor is that no records are available to establish its claim. The apparent justification for such ground is that the petitioning creditor was to some extent responsible for management of the company during the period for which claim has been made. The controllers of the present company, having assumed management later do not have any records to justify the claim. According to the petitioning creditor all the records are with the company. According to the company the petitioning creditor has taken them away. It is true, that the petitioning creditor has been unable to show even a formal receipt by the company of the bills, invoices and other documents appended to....
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....n of over 50,000 copies in West Bengal and any Bengali newspaper of like circulation. Such advertisement should be made within four weeks from date. Publication in the Official Gazette is dispensed with. 20. List this application five weeks hence. 21. The major part of this claim is relegated to suit. I think the court can set terms and conditions on the company in that prospective suit, for not proceeding with its winding up on just and equitable grounds. I propose to do so as it would, in my opinion, subserve the ends of justice. 22. In the event, the company pays the sum of Rs. 2,04,360 to the petitioning creditor within two weeks from the date and furnishes a bank guarantee for the sum of Rs. 10,00,000 in favour of the petition....