TaxTMI 
TaxTMI 
2013 (8) TMI 315
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.... was also made by the respondent seeking time to repay the earlier loan of Rs. 3 crores. It would appear that the market value of the shares pledged as security for the loan of Rs. 3 crores fell; so, more shares were pledged, whose value amounted to Rs. 7,03,125. After a series of extensions or rolling-over of the loans, the respondent repaid the loan of Rs. 3 crores on 27-2-2009 and on the same date again sought rolling-over of the loan of Rs. 5 crores. In the meantime, the value of the pledged shares had further fallen; the petitioner therefore requested the respondent to pledge more shares to cover the amount of the loan. In the event, 18,75,000 shares belonging to the promoters of the respondent-company were pledged to cover the loan of Rs. 5 crores and the interest thereon. 3. The grant of the loan of Rs. 5 crores against the pledge of shares was supported by a loan agreement dated 27-8-2008. It was on this day that the shares were initially pledged. 4. Between 7-8-2009 and 2-9-2009, apparently frustrated by repeated requests from the respondent-company for roll-over of the loan, the petitioner transferred the pledged shares to its own DEMAT account in the following mann....
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.... sale of shares was not made known to the respondent. It was reiterated that the shares were sold only after serving a notice dated 17-3-2010 on the respondent. 8. The respondent not having paid the amount to the petitioner despite the statutory notice, the petitioner has filed the present petition u/s. 433(e), 434 and 439 of the Act. It may be added that on 17-3-2010 the petitioner had filed Comp. Pet. No.216/2010 in this court, which was withdrawn since it had not taken note of the amount of Rs. 1,70,02,832 realised by selling the pledged shares. 9. The contentions put forward on behalf of the petitioner are that the respondent is unable to repay the loan, that despite the sale of the pledged shares there is still a substantial amount of loan outstanding, that the respondent has neglected to repay the debt and in these circumstances the conditions of clause (e) of section 433 r.w. section 434(1)(a) of the Act are satisfied and the petition has to be admitted and winding-up proceedings be ordered. 10. The contention advanced on behalf of the respondent-company is that there was no doubt a default in repaying the debt by 30-6-2009, but after the first notice issued on 27-7....
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....ioner, the relief claimed in the suit is limited to Rs. 2.5 crores obviously to save court-fee. It is clarified that the petitioner did not intend to acquire any controlling interest in the company and what was sought was only a say in the affairs of the respondent-company to protect its interests as a creditor. Several authorities were cited in support of these arguments. 12. It is well settled that a company will not be ordered to be wound-up if its defence to the petition is substantial. In Madhusudan Gordhandas and Co. v Madhu Woollen Industries Pvt. Ltd. (1972) 42 Comp. Cas. 125, the Supreme Court laid down that if the debt is bona fide disputed and the defence is substantial the court will not wind up the company. The defence however shall be taken in good faith and one of substance and should be likely to succeed in point of law; the company shall also adduce prima facie proof of the facts on which the defence rests. In Mediquip Systems (P) Ltd. v Proxima Medical System GmbH (2005) 7 SCC 42, the court held that if the defence was not mere moonshine the company will not be wound up. In IBA Health (India) Private Limited v Info-drive Systems Sdn. Bhd. (2010) 10 SCC 553 the ....
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....have the goods back without repayment of the debt (Naikram Dubey v Bank of Bengal (1891) 19 IA 69), but he can claim damages if the goods were sold below the market price (Dhani Ram & Sons v Frontier Bank Ltd. (AIR 1962 Punj. 321). 15. Keeping these basic rules in mind, I may examine the facts before me. There is nothing on record to show that before transferring the shares to its DEMAT account, the petitioner gave reasonable notice to the respondent of its intention to do so. The notice dated 27-7-2009 speaks only of the general right of the petitioner to sell the shares and apply the sale proceeds in the discharge of the loan without specifically stating that the petitioner proposes to have the shares transferred to its own DEMAT account. There is no specific averment to this effect in the notice dated 27.7.2009 or in the petition. Thus, a mandatory requirement of the section has not been satisfied. In the first place, it is doubtful whether the petitioner had the right under the contract or under law to transfer the pledged shares to itself. Article-2 of the loan agreement dated 27-8-2008 deals with "security& margin". Clause (iii) of Art. 2.1 provides as follows:- "Lender....
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....the agreement dated 27-8-2008 provides that the value of the shares to be pledged shall be 2.5 times the amount of the loan and that the "Value date would be closing share price on BSE as on date of pledge". The position cannot be different if it comes to ascertaining the value of the shares on the dates on which they were transferred to the DEMAT account of the petitioner. As per the table set out earlier, the market value on those dates was Rs. 2,65,83,750. 18. Thus far there is no difficulty, though the petitioner would contend that it was right in giving credit only to the amount of the actual sale proceeds when the shares were sold for consideration in March-May, 2010. In the light of the authorities cited above, this contention cannot be countenanced. The petitioner cannot take contradictory positions by saying at one breath that it was the owner of a major chunk of shares and hence would want its nominee in the board of the respondent-company and at the same breath contest the plea that the value of the shares as on the dates of the transfer to its DEMAT account should be considered. 19. The respondent, however, goes so far as to contend that since 17.28% of the shares in....
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....n that case the respondent-company which was sought to be wound-up took the plea for the first time in the written statement that the transaction with the petitioner was in fact a loan transaction couched in language suggesting that it was a lease. The basic character of the transaction itself was sought to be altered for the first time before the company court in the written-statement. That was not permitted, in the absence of any earlier plea to that effect. The facts of the present case are different, in the sense that the respondent does not seek to put forth any drastic plea for the first time before this court which would change the very nature of the transaction between it and the petitioner. It does not dispute the fact that the transaction was a loan transaction; what is sought to be contested is only on the basis of section 176 of the Contract Act. In other words, without seeking to change the factual basis or the nature of the transaction, certain legal pleas based on the relationship between a pledgor and a pledgee are sought to be taken in the reply. No prejudice has been shown to have been caused to the petitioner by the fact that the respondent has raised such pleas ....