TaxTMI 
TaxTMI 
2012 (3) TMI 111
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....oposal for settlement by way of one time resettlement of loan. Ultimately, on 12 December 2001, ICICI agreed to accept the one time settlement (OTS) of the company at Rs. 3.50 crores subject to certain conditions. According to the petitioning creditor, the appellant did not abide by the conditions, but the appellant did make some payments purporting to pay towards the part payment of OTS. 3. It appears that under a Deed of Assignment dated 31 March 2005 and the Deed of Confirmation dated 20 April 2005, Kotak Mahindra Bank Limited (petitioning creditor) stepped into the shoes of ICICI and thereafter filed winding up petition No.5 of 2006 against the appellant-company in this Court on 28 November 2005. During pendency of the said petition, the Debt Recovery Tribunal, Pune issued an interim recovery certificate for an amount of Rs. 3.27 crores. After giving credit for the payments made by the appellant, the petitioning creditor claimed an amount of Rs. 3.16 crores on the basis of the said interim recovery certificate. The Company Court, therefore, passed an order dated 8 June 2006 after referring to the admission made by the appellant-company in its affidavit-in-reply to the said c....
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....ting default in payment of first instalment or any two subsequent instalments." 5. There is no dispute about the fact that the appellant-company did pay the aforesaid amount of Rs. 3.16 crores by 31 December 2007 and that the question of appointing the provisional liquidator did not arise. 6. Thereafter, the DRT made order dated 20 August 2009 directing issuance of recovery certificate in favour of the petitioning creditor and against the appellant-company. On the basis thereof, the recovery officer issued the recovery certificate for an amount of Rs. 8,86,68,936/- together with interest at 10% per annum from 8 April 2004 (the date of application before the DRT) till realization. 7. On the basis of the above recovery certificate and calculating the interest on the principal amount, the petitioning creditor issued notice to the appellant-company calling upon the company to pay the bank an amount of Rs. 14.26 crores together with further interest from 1 March 2010 and other charges. The appellant-company submitted its reply dated 1 April 2010 contending that ICICI had accepted the OTS of the company for an amount of Rs. 3.50 crores which constituted a new agreement, supersed....
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....very Tribunal, it has not resorted to execution of the said certificate. Placing reliance on provisions of section 433(e) read with section 434(1)(b), it is submitted that only after the petitioning credit resorts to execution proceedings on the basis of the recovery certificate issued by DRT and only if the execution process is returned unsatisfied in whole or in part, the petitioner-bank can resort to winding up proceedings. It is submitted that since the appellant has already filed an appeal before the Debt Recovery Appellate Tribunal and the appeal is still pending, it cannot be said that the appellant has no bona fide dispute to the claim made by the petitioning creditor. Placing strong reliance on the decision of the Apex Court in IBA Health (I.) (P.) Ltd. v. Info-Drive Systems Sdn. Bhd. [2010] 104 SCL 367/8 taxmann.com 1, it is submitted that party to a dispute should not be allowed to use the threat of winding up petition as a means of forcing the company to pay a bona fide disputed debt. The Company Court cannot be reduced to a debt collecting agency or as a means of bringing improper pressure on the company to pay a bona fide disputed debt. 12. It is vehemently submitt....
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....nding up on the basis of the recovery certificate issued by the Debt Recovery Tribunal, so long as the recovery certificate is not returned unsatisfied in whole or in part, we are not required to express any opinion, because the appeal deserves to be allowed on other grounds, particularly having regard to the fact that the first winding up petition being Company Petition No.5 of 2006 by this very petitioning creditor against the same company was dismissed by this Court in terms of order dated 8 June 2006 which was complied with by the company (i.e. the appellant herein) and also because the appellant-company has agreed to pay a further amount of Rs. 3.25 crores over and above the amounts paid by the appellant-company in compliance with the said order dated 8 June 2006 in the above company petition. The fact that the appellant-company has raised a defence about one time settlement between ICICI and the appellant-company and the petitioning creditor claims to be a mere assignee from ICICI and that the defence of the company on this ground is pending examination before the Debt Recovery Appellate Tribunal, are also relevant facts indicating that the appellant-company has raised a bona....