TaxTMI 
TaxTMI 
2013 (1) TMI 149
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.... the Appellate Tribunal dismissed the same on December 15, 2008 as we notice at page 33 of the paper book. The Company then filed writ petitions before the Madhya Pradesh High Court where the immovable assets were lying, inter alia, praying for an order of restraint against the Bank from enforcing the recovery. The Division Bench of Madhya Pradesh High Court inter alia observed as follows:- "We therefore accordingly provide that the bank draft which is lying with the bank to the tune of Rs.2.75 crores shall be allowed to be encashed by the Company and in case the said money is recovered by the bank adjustment of the aforesaid amount shall be given towards deposit of rupees five crores which is to be made by July 31, 2007". An application for review was made that was dismissed vide Order dated August 1, 2007 as we notice at page 37-39 of the paper book. An unsuccessful appeal to the Supreme Court by way of Special Leave Petition also failed when it was "dismissed as withdrawn". From the facts as briefly narrated above, we find that the company availed all available remedies to stall the recovery proceedings however, failed up to the Apex Court level. In the above backdrop, the ....
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....a) and (b) of the said Act of 1956. Hence, this appeal by the Company. We heard Mr. Abhrajit Mitra, learned counsel appearing for the appellant as well as Mr. P.C. Sen, learned senior counsel appearing for the respondent/creditor. Mr. Mitra advanced his argument by taking recourse to Order 34 Rule 4, 5 and 6 of the Code of Civil Procedure as well as Appendix D, Form 11 thereat. Mr. Mitra tried to contend that the proceeding before the Tribunal was in the nature of a mortgage suit. The recovery certificate so issued by the Tribunal would thus empower the Bank to enforce their claim and recover their dues through the process of sale of the mortgage property. In case there was any shortfall the Bank would have to go back to the Tribunal to have a money decree for the balance that would obligate the guarantors to satisfy. According to Mr. Mitra, the recovery certificate was nothing but a preliminary decree that could not be said to be a certificate for a quantified debt and/or a decree within the meaning of Section 434(1)(a) or 434(1)(b) of the said Act of 1956. Elaborating his argument Mr. Mitra contended that a winding up petition could only be maintainable at the instance of a cre....
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..... Mr. Sen contended that even assuming the notice could be termed as 'bad', the company was otherwise insolvent and it was just and equitable that it should be wound up. Referring to the factual matrix Mr. Sen contended that the company took all possible steps to forestall the recovery. He referred to the orders of the Madhya Pradesh High Court as well as the Apex Court to show that the writ petitioner praying for cancelling the recovery of possession, but dismissed and such orders reached its finality when the Special Leave Petition was dismissed as withdrawn. He referred to the judgment and orders of the Tribunal issuing recovery certificate to show that ample opportunities were given to the company to pay off the dues in instalments. The company miserably failed to avail such opportunity. Mr. Sen also referred to the order dated March 2, 2012 of the learned Company Judge wherein we find that an attempt to revive the company proposing a scheme of arrangement also failed when the same was not pressed by the propounders of the said scheme. He referred to the reply to the statutory notice to show that only sustainable plea that the company could take, was to the extent that the iss....
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....pport of it." Then they asked for particulars, but when we come to the facts, we find this, that the creditor knew that they had a balance sheet with his name in it and with the amount in; that they had paid him interest in April, receiving this demand in May for the 500 pounds sterling from the very people and of course, he would naturally think they were trifling with him, and they knew the particulars. Besides that, he tells them this, and I think he might reasonably believe that they were playing with him. That is the view I take of the correspondence and I am by no means unprepared to say this, that if they had put all those shadowy claims together in a letter in the most distinct terms, the creditor would still have been entitled to think that they were, to use a common phrase, making game of him - that they could not be serious in such line of defence. Then, he is entitled to say "my claim is not bonafide disputed. You are amusing yourselves by weaving some cobwebs; but you do not intend to pay, and you know that this is nonsense and that it is a mere excuse for non-payment, or for obtaining delay........." While replying to what was argued by Mr. Sen, Mr. Mitra distinguis....
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....tation of the petition. His Lordship dismissed the winding up petition. While doing so, His Lordship observed, "this court goes by the same principle and holds that the period of limitation should be counted from 1992. But assuming it is not counted from 1992, it has to be counted from 1997. Therefore, considering the matter from all possible angles, this court is of the view that instant winding up petition has become barred on the date on which it is presented. It cannot be held that in the case of winding up petition, limitation period will be 12 years which may be the case in matters of execution of a decree." Mr. P.C. Sen, the learned senior counsel appearing for the respondent was critical about the above judgment to say that His Lordship did not properly advert to the earlier decision in the case of Unique Cardboard Box Manufacturing Ltd. (supra). We note that the said decision (Unique Cardboard) was not placed before His Lordship. In another decision our Division Bench presided by the then Chief Justice in Maxlux Glass Pvt. Ltd. (supra) considered a quantified debt followed by a recovery certificate issued by the Debt Recovery Tribunal. The Division Bench rejected the c....
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....rring that he ought to recover any further sum for the same cause of action." He also relied upon two Apex Court decisions in the case of Som Dev & Ors. -VS- Rati Ram & Anr. (Supra) and Badat & Company (supra) on the issue. On a combined reading of the ratio decided in the precedents referred to above, we would find the argument so advanced by Mr. Mitra was misplaced. The winding up was a statutory remedy giving wide discretion to the learned Judge. Such discretion was to be exercised on the well settled principle of law as to putting up a claim against a company that the company failed and neglected to meet without any reasonable cause. In short, a claim against a company that could not be resisted by the Company through a bona fide approach having plausible reasons to defend the same would automatically attract the fiction of deemed insolvency that would maintain a winding up proceeding against the debtor company through a creditor. If we read Sub-section 1(a) and 1(b) together and on a combined reading we would find that the concept of debt would also include a debt quantified by an adjudicating agency. The Debt Recovery Tribunal quantified the debt and adjudicated the same and....