TaxTMI 
TaxTMI 
TaxTMI 
2013 (6) TMI 301
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....rs for a sum of USD.64,036,036.29 (US Dollars sixty four million thirty six thousand and thirty six and twenty nine cents only) under the Bonds along with accrued interest and default interest. 5. That according to the balance sheet of the respondent company, the authorised share capital of the respondent company is Rs.7,000,000,000.00 (Rupees seven thousand Million only) divided into equity shares of Rs.10/- each. The amount of capital issued is Rs.3,721.270,450.00 (Rupees three thousand seven hundred twenty one Million, two hundred seventy thousand four hundred and fifty only) divided into equity shares of Rs.10/- each. 6. That the petitioner has filed this petition in its capacity as a trustee on behalf of the Bondholders, on the ground that the petitioner is authorised to take recourse to any legal action, on behalf of all the holders of Bonds, if holders of atleast 25% of Bonds then outstanding, instruct it to do so. 7. That the petitioner has been duly instructed by holders of atleast 25% of the Bonds outstanding as on the date of this petition to file this present petition. 8. That on 20.12.2007, by way of an Offering Circular issued by the respondent company, the Compan....
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....r (a) any such payments of Default Interest pursuant to this Condition 13.5 which shall be made directly by the Company to the relevant Bondholder (b) any failure by the Company to make payments of any such Default Interest to the Bondholders and (c ) any calculations in respect of such interest, which calculations shall be done by the Company." 13. That the respondent company failed and neglected to pay the Bondholders the interest payable in terms of Condition 4.1 of the Bonds on the Interest Payment Dates falling on 27.6.2010, 27.12.2010, 27.6.2011 and 27.12.2011 or within ten days grace period as provided under Condition 17.1 of the Bonds. The petitioner is unsecured creditor and does not hold any security for the dues payable under the Bonds. The non payment to the Bondholders amounts to breach of Bond Conditions and constitutes an event of default under Condtiion 17.1 of the Bonds. 14. The relevant portion of the Condition 17 of the Bonds reads as under: "17 Events of Default: In any of the following events (each an "Event of Default") occurs and is continuing, the Trustee at its discretion may, and if so requested in writing by the holders of atleast 25% in principal amo....
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....y was positive that the interest payment would be wired before the end of next week, i.e. 7.8.2010 and till then, no default notice be issued on the Company. 19. The Commitment was also made to make payment vide email, dated 28.7.2010, wherein again assurance was given that steps were being taken to make payment. This assurance was again not kept and therefore, the petitioner again called upon the respondent Company to confirm the payment. The petitioner on the other hand was being chased by the clearing systems regarding the payment which could result in enforcement of action against the company. The Company still did not honour its commitments. 20. That in response to email, dated 9.8.2010, the respondent Company sought time till 13.9.210 to come back to the funding of interest payment. As no explanation was forthcoming from the Company, the petitioner sent another e-mail on 13.9.2010 stating that if explanation on the issues faced by the petitioner was not provided, the notice of information of the interest payment default would be sent to the international clearing systems for distribution to Bondholders. 21. In response, the Company by email dated 14.9.2010 stated that the ....
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.... June 27, 2011, payable by June 24, 2010. 28. That as the Company failed to pay the aforesaid interest installments, the Company also became liable to pay the Early Redemption Amount in terms of Condition 17 of the Bonds. 29. That it was due to negligence and failure of the Company to pay the interest installments inspite of repeated reminders by the petitioner, the petitioner served a statutory winding up notice dated November 18, 2011 (Winding Up Notice) at the registered office of the respondent Company calling upon them to pay within 21 days of the receipt of the Winding Up Notice, a sum of USD 62,390,724.10 (United States Dollars Sixty Two Million Three Hundred Ninety Thousand Seven Hundred Twenty Four and Ten Cents only) plus default interest. 30. That on December 21, 2011, the advocates for the respondent company responded to the aforesaid Winding Up Notice inter alia stating that a detailed reply to the Winding Up Notice was being prepared and would be sent to the petitioner within two weeks from the date of receipt of this letter. However, till date the Company did not sent the detailed reply to the Winding Up Notice. 31. That 21 days time stipulated in the Winding U....
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....t 12 years. The respondent Company has development centers in Bangalore and Gurgaon. It has bagged more than 1500 projects in India and abroad and has grown over the years organically and non-organically by way of acquisition of business and clients in the USA. The respondent Company has been recognized for its delivery into North American Market by Gartner, which is a prestigious research agency and also possess technical quality certificates like ISO 9001, BS 7799, CMI Level -5 (Capability Maturity Model) etc. The shares of the respondent Company are listed in the Bombay Stock Exchange, Chennai Stock Exchange and Luxembourg Stock Exchange and the public shareholding is to the extent of 93%. The respondent Company has around 30,000 shareholders and has around 50 employees in India as well as around 1000 abroad who depend on the Company. (iv) That the respondent Company offered upto USD 50,000,000/- (U.S.Dollars fifty Million only) 2.0% Unsecured Foreign Currency Convertible Bonds due 28th December, 2012 convertible into 21,505,434 global depository receipts ("GDRs") each representing 4 shares of Rs.10/- each of the respondent Company or 86,021,736 Shares on the 20th December 2007....
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.... (ix) That no capital authorisation has been filed before this Court. On the other hand, the set of Bond holders are in active conversation with the management which have been fully briefed about the present operational and other issues affecting the ability of the company to make any payment for the last few years. Another set of bond holders have also clearly expressed their intent and desire to work with the company for a settlement and have not supported the process of any winding-up which shall affect their rights as an unsecured creditor. (x) That it is denied that the respondent company has failed or neglected to pay the Bondholders the interest payable on the Bonds. The stand of the respondent is that the Company has paid all interest till the end of the year, 2009 and has tried to honor all the payments to the Petitioner. Even after that the Petitioner was informed about the efforts taken by the company to make the interest payments. The reason for non payment is stated to be severe financial crunch which the company faced. (xi) That for the year ending March 2010, the value of receivables stood somewhere around 314 crores and it was due to the prevailing market conditi....
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....oner vehemently contended; (i) That it is proved that the respondent company has not paid interest due on the bonds after June 2009 and under the terms of the bond, it is an event of default which entitles the petitioner to seek recovery of the amount. The statutory notice was issued to the respondent to clear the payment, as the respondent has failed to clear admitted liability, petitioner is entitled to seek remedy under the Bond Trust deed. (ii) That e-mails sent by the respondent company shows that the liability is admitted, as the respondent company informed the petitioner that it was arranging to make interest payment due on the bond and also assured payment of interest. Inspite of assurance, the admitted liability is not cleared. (iii) That the learned counsel for the petitioner also referred to the notices issued from time to time and replies received thereto as also to counter filed by the respondent company, to contend that liability is admitted. Therefore, the petitioner has successfully proved that the respondent company has failed to pay the admitted liability. (iv) It was also contended that the petitioner was competent to maintain this petition as it was authori....
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....r Indian Stamp Act though executed outside India. 43. After the judgment was reserved, a memo, dated 30.3.2012 has been filed in the garb of placing on record the judgment of the Hon'ble Supreme Court along with letters of the Bond holders showing authorisation to the petitioner to present company petition. No notice of this memo can be taken, as this cannot be permitted, no documents at the back of opposite party can be filed in the Court that too without liberty of this Court in writing. The liberty in this case was granted only to place on record, the judgments on which reliance was placed by the learned counsel for the petitioner. It can therefore be said that petitioner has not approached this Court with clean hands. 44. The learned counsel for the petitioner also placed reliance on the judgment of the Hon'ble Karnataka High Court in The Bank of Newyork Mellon, London vs. Cranes Software International Ltd. (C.P.No.203 of 2010 decided on 19.3.2012) wherein the Hon'ble Karnataka High Court was pleased to lay down as under: "17 The learned senior counsel for the respondents however sought to draw a distinction by contending that the decision of the Gujarat High Court was in a ....
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....no stampt duty has been paid. The memo filed after the judgment reserved without liberty of the Court cannot be taken on record or can be basis for the judgment. 46. It may be noticed here, that in the case before the Karnataka High Court, Power of Attorney was duly stamped, as per Article 54 to the schedule to the Karnataka Stamp Act. But in the present case, admittedly, no such stamp duty has been paid, though it is open to this Court to impose penalty for deficit stamp duty, still it is to be seen whether the petitioner is entitled to equitable relief under section 433, 434 to wind up a running company on a company petition, when admittedly, petition as framed is defective. 47. Reliance was also placed by the learned counsel for the petitioner on the judgment of the Hon'ble High Court of Delhi in Resham Singh &Co. P. Ltd. vs. Daewoo Motors India Ltd. 2003(116 Comp. Cases 529 (Del) wherein the Hon'ble Delhi High Court was pleased to lay down that when no reply to statutory notice, is received, a presumption of indebtedness can be drawn against the respondent company for admission of winding up petition at the threshold itself, but in case, bonafide dispute is raised, then admis....