2011 (7) TMI 1009

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....curity deposit and for default in payment of the monthly rent a notice was issued under section 434 of the Companies Act, 1956 whereby the agreements between the parties was terminated with immediate effect and a sum of US Dollar 2,12,452.78 was demanded along with interest. In its reply to the section 434 notice payment of a part of the demanded sum was admitted. The forfeiture of the security deposited was disputed. There is no reason for disputing the forfeiture of the security deposit as under clause 6.3 of the agreement the petitioning creditor is entitled to forfeit security deposit in case of termination of agreement for the reasons contained in clause 6.2 of the agreement. The arbitration clause has no application and neither in the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....at in the statutory notice although a claim has been made, there is no admission in the reply given to such statutory notice as admission must be taken as a whole and not in part as held in Hanumant Govind Nargundkar v. State of Madhya Pradesh AIR 1952 SC 343. The winding up Court is not a debt collecting Court and in case of the slightest doubt the petitioning creditor will not be entitled to relief as held in 1994 (1) CHN 409 and (2005) 4 CHN 343. The validity of termination contained in notice issued under section 434 cannot be decided in winding up proceeding as the question of alleged breach cannot be considered by winding up Court. No notice has been issued under clause 6.2 and in view of clauses 13 and 14 of the agreement the parties....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e clause became operative. The decision reported in AIR 1952 SC 583 is distinguishable on facts and can have no bearing to the facts of the instant case. Even if the question of forfeiture is not considered the sum of 82,467.90 US dollar is payable by the Company to the petitioning creditor. It has nowhere been pleaded nor is it the case of the company that the forfeiture is contrary to the agreement. The decision reported in 1994 (1) CHN 409 and 2005 (4) CHN 343 are distinguishable on facts. Reliance is placed on Madhusudan Gordhandas & Co. v. Madhu Woollen Industries (P.) Ltd. AIR 1971 SC 2600. To deal with the question of applicability of the Laws of Singapore and the arbitration clause, the decision report in Haryana Telecom Ltd.'s case....