TaxTMI 
TaxTMI 
2014 (5) TMI 50
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....ndent company has lost its capacity to discharge its debts and it is unable to make the payments of its creditors or has failed and neglected to make the payments of dues and payable amounts and therefore, the respondent company deserves to be wound up. 2. So as to support and justify the request, the petitioner has claimed in the petition that, the petitioner had placed three fixed deposits with the Corporation Bank which were to mature on 16.2.2011. The total value of said three fixed deposits was to the tune of about Rs.2 crores 54 lakhs. The details of said three fixed deposits is as follows:- "6.1 The Petitioner had placed the following Fixed Deposit Receipts (FDRs) with the Corporation Bank (for short the "Bank"), Alkapuri Branch, Vadodara. Sr.no. FDR No. Amount Rs. 1. KCC/01/100872 1,02,51,337/- 2. KCC/01/100873 50,07,778/- 3. KCC/01/100871 1,02,27,202/-" According to the petitioner's claim, the said fixed deposits were to mature on 16.2.2011. The petitioner has alleged that around that time, the respondent company was in need of funds and had, therefore, approached the Corporation Bank (the Bank where the petitioner had placed the....
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....date of the said FDRs and that in case of any default/delay, the Company was liable to pay interest at 30% per annum along with the principal amount of the FDRs. On the basis of the security of the petitioner's aforesaid FDRs, the Company availed of temporary loan from the Bank. The Bank vide its letter dated 3/11/2010 (Copy at Annexure "B" hereto) informed the Company that it was enjoying CCSDL Limit against the third party deposits and the same has to be released by them. The Company vide its letter dated 3/11/2010 (Copy at Annexure "C" hereto) informed the Bank not to release the securities unless and until they receive any communication from the Company. The Bank wrote a letter dated 4/11/2010 (Copy at Annexure "D" hereto) to the Company stating that the Company has informed the Bank that the personal guarantee and collateral security offered by the Company should not be released until it received further communication from the Company. Mr. Ashok Khurana, on behalf of the Petitioner and other associated Company, wrote a letter dated 30/11/2010 (Copy at Annexure "E" hereto) informing the Bank to release the collateral securities and personal guarantee within 7 days from the ....
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....m the FDRs of the Petitioner in the loan account and after such appropriation, the Petitioner has stepped into the shoes of the Bank and is entitled to receive from the Company, the amount of FDRs appropriated by the Bank against the Company's loan along with 340% interest. The said amount appropriated by the Bank comes to Rs.2,11,81,113.24. The Petitioner has rightly debited the said amount in the Company's account in the books of the Petitioner. The copy of the statement of account of the Company in the books of the Petitioner is annexed hereto as Annexure "O".' 3. The petition is opposed by the respondent company, who has filed affidavit dated 8.8.2012 disputing and denying the allegations by the petitioner. The respondent has claimed and asserted in the said affidavit that the petitioner's claim arise out of Share Purchase Agreement dated 18.3.2010 entered into between Mr. Ashok Khurana and other members of the Khurana family on the one hand and Welspun Infratech Limited on the other hand. The respondent has also claimed that there is no debt as contemplated under the Act which the respondent company is obliged to discharge so far as the petitioner is concerned....
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....med the respondent company about its agreement and conditions for the said agreement. 4.1 The learned Senior Counsel for the petitioner contended that the respondent company is obliged to return the said amount of about Rs.2.54 crores with interest at the rate of 30% p.a., however, the respondent company has taken dishonest stand and refused to return the said amount. So as to support his submission that the respondent company had made the above mentioned request to the petitioner with clear intention of not making payment to the bank, learned Senior Counsel for the petitioner relied on the document/letter dated 3.11.2010 [Page-12 of the petition]. 4.2 Mr. Soparkar, learned senior counsel for the petitioner submitted that despite repeated requests, the amounts due and payable from the respondent are not paid and in view of the fact that neither payment is made nor reply is given in response to the statutory notice, it is clear from the facts of the case that the respondent is unable to pay and discharge its dues and therefore, the petitioner is entitled for order of admission of petition. 5. Per contra, Mr. Bhatt, learned senior counsel for the respondent company submitted that ....
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....e the erstwhile Promoters of the Company. The Khurana family and their affiliate companies, including the Petitioner, are represented and controlled by one Mr. Ashok Khurana. Welspun Infratech accordingly entered into the Promoter SPA dated March 18, 2010 by way of which the Promoters sold their entire shareholding in the Company to Welspun Infratech. (Annexure B1 hereto) Welspun Infratech also entered into the Sellers' SPA dated March 18, 2010 (Annexure B2 hereto) with Ashok Khurana's affiliate companies, including the Petitioner abovenamed by way of which Ashok Khurana's affiliate/group companies, including the Petitioner, sold their entire shareholding in the Company to Welspun Infratech. The entire transaction comprising the sale of shares and transfer of Management and control was completed on or about August 16, 2010 viz. the Share Sale Closing Date. The same has been admitted by the Petitioner's representative Mr. Ashok Khurana in his letter dated February 2, 2011 addressed to Corporation Bank on behalf of his affiliates/associated, including the Petitioner (Annexure H to the captioned Petition). 11.2 However, prior to the completion....
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....ny, the Company was not responsible for any FDRs that the Petitioner may have placed with Corporation Bank. The Company, by its letter dated March 9, 2011 addressed to the Petitioner, has already informed the Petitioner the subject transactions with Corporation Bank were unauthorized and unapproved by the Board of the Company and had been entered into by the Petitioner in collusion with its promoter Mr. Ashok Khurana. The Company categorically denied all liability towards the Petitioner in connection with the said FDRs. 11.5 Moreover, the Company, through its advocates' letter dated December 1, 2011 has also responded to the Petitioner's notice of October 24, 2011 and has once again denied the Petitioner's claim (Annexure R to the captioned Petition). In the said letter, the Company has reiterated its stand that the said OD referred to in the captioned notice was an unauthorised facility obtained surreptitiously and fraudulently by the said Mr. Khurana, in collusion with the Petitioner and without the due authority or knowledge of the Board of Directors of the Company. 11.6 In addition to executing the above fradulent and co....
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....ondent company was incorporated as and in the name and style of M/s. MSK Projects (India) Limited and subsequently, its name came to be changed to Welspun Projects Limited. In this context, the petitioner has averred, inter alia, that:- "2. The Company abovenamed viz. Welspun Projects Limited (hereinafter referred to as "the Company") was originally incorporated in the month of December 1994 (as MSK Projects (India) Limited) under the Companies Act, 1956 as a Private Company limited by shares. It is now known as Welspun Projects Limited." Therefore, actually the petitioner's claim is against MSK Projects (India) Limited and consequently, against Welspun Projects Limited. According to the petitioning creditor, the respondent company owes certain amounts, as specified in the petition to the petitioner company and the said outstanding dues have not been paid by the respondent company to the petitioner despite repeated requests and demands and even after due and proper service of statutory notice under Sections 433 and 434 of the Act. It is also pertinent to note that the said statutory notice dated 24.10.2011 was also served to the said respondent comp....
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....2011, which is forwarded in response to the petitioner's letters dated 16.2.2011 and 25.2.2011. 8. The letter dated 3.8.2010 on which the learned Senior Counsel for the petitioner relied to support the submissions that the respondent company had requested the petitioner to make its FDs available for term loan facility is addressed by the respondent (i.e. MSK Projects (India) Ltd.) and it reads thus:- "August 3, 2010. To, The Director, M/s. D.A. Finvest Private Limited 1 Vikram Society Gotri Road, Vadodara. Sub: Request for Your fixed deposits to mark lien to avail loan from Corporation Bank. Dear Sir, We request you to offer your deposits about Rs.2.50 Cr to keep as securities to avail CCSDL from Corporation bank, Alkapuri, Vadodara Branch as our Company require urgent working capital funds. The said deposit receipts will be returned to you on or before the due dates of the deposits. In case of any delay or default we agree to pay the entire amoun....
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....010 from the concerned bank, the said M/s. MSK Projects (India) Ltd., i.e. the respondent forwarded its reply dated 3.11.2010 to the bank. The respondent's letter dated 3.11.2010 reads thus: "Corporation Bank 14-15 national Plaza R.C. dutt Road Alkapuri Vadodara-390 007 Kind Attn: Shri Manjunath Dear Sir, Re: Request for various concessions. We thank you very much for considering our various requests against working capital facilities. You have also agreed to waive Collateral Security given by Director of MSK Projects (India) Ltd. We further like to inform you that Personal Guarantee and Collateral Security offered by Director of MSK Projects (India) Ltd is not to be released till you receive communication from us." Thereafter, on the next day, i.e. 4.11.2010, the said bank addressed a letter to the Director of said M/s. MSK Projects (India) Ltd., i.e. to the Director of the respondent company. The said letter dated 4.11.2010 reads thus: "Mr. Ashok Khurana, &....
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....onding vide its letter dated 5.8.2010) deserves to be considered in light of the above-mentioned fact also. Besides the above-mentioned letters, one more letter, i.e. letter dated 31.12.2010 (Page 33) was exchanged between the said bank and said Mr. Ashok Khurana. The said letter dated 31.12.2010 reads thus: "To: Mr Ashok Khurana No.1, Vikram Society, Gotri Road, Vadodara 390 021. Dear Sir, Subject: Release of third party guarantees / collateral securities etc., for credit facilities sanctioned to M/s Welspun Projects Limited (Formerly known as MSK Projects (India) Limited) We are in receipt of your two letters dated 20.12.2010 submitted by you, for self and on behalf of your associates. In this regard, we would like to inform you that we have already taken up the issues with the captioned Company for early resolution." It is pertinent that in the said letter also, the bank has made reference of two letters, both dated 20.12.....
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....cific request for the continuance of the deposits from Depositors. In view of the above, we request you to look into the matter and inform us accordingly at your earliest." Thus, according to this letter, Mr. Khurana represents all companies mentioned in said letters. From the conspectus of, and on conjoint reading of, the above-mentioned letters, it emerges that Mr. Khurana is common person / Director so far as the petitioner company and the respondent company, i.e. the petitioning and the alleged debtor are concerned. In present case, the said facts gain importance in view of the respondent's allegation that the respondent company / its Board of Directors had not sanctioned/approved decision to avail loan and/or to request the petitioner to allow its FDRs as collateral security and it was said Mr. Khurana who had on his own and without sanction/approval of respondent company / its Board of Directors entered into and executed said transaction by taking disadvantage of the position that he alongwith others (most of them were associate of petitioner / Mr. Khurana) was promoter of said MSK Projects (India) Ltd., i.e. the respondent and was also one of....
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....SK Projects (India) Ltd. 8.4 It appears that vide its letter dated 25.2.2011 [Page-37 of the petition], the petitioner informed the respondent company that:- "Please refer letter our letter dated February 16, 2011, requesting you to close the CCSDL Account by depositing loan raised by you. But, as you have not cleared the loan the bank has encashed our FDRs and has closed the loan on 22/02/2011. Following FDRs are encashed: 1. KCC/01/110331 Rs. 1,02,64,147.00 2. KCC/01/110332 Rs. 50,11,428.00 3. KCC/01/110330 Rs. 1,02,39,982.00 Rs. 2,55,15,557.00 Less: Amount Credited to Current Account (-)Rs. 43,34,443.76 Net Amount Payable Rs. 2,11,81,113.24 We request you to pay the amount immediately along with the interest @ 30% from 03/08/2010 till the date of payment. We request you to clear the amount within a period of 15 days from the date of this letter, failing which, we shall be constrained to initiate legal proceedings against you as stated herein below, as deemed fit and proper: (a) Civil proceedings for recovery of the amount along with interest @ 30% p.a.  ....
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....ed by the respondent company against maintainability of present petition on the ground that the petition and the claim raised by the petitioner involve and raise various issues of disputed facts. In this context, it is appropriate to refer to below mentioned details contained in letter dated 30.11.2010 (Annexure-E, page 14) addressed by said Mr. Khurana to the bank: "Further to my letter under reference regarding subject matter, I state that by Company's letter dated 14th April, 2010, you were informed about Taking over of MSK Projects (India) Ltd by Welspun Infratech ltd. You are aware that a joint meeting was held on 24/09/2010 at Mumbai in connection with the Taking over of Company MSK Projects (India) Ltd so that you, as Lead Bankers for the Consortium, could take a decision whether to recall the loans or continue your relationship with the Company. In the latter case, your decision to continue relationship with the Company implied that you had arrived at agreement with the Company regarding the terms and conditions of your relationship and that all Personal Guarantees, Collateral Securities and Deposits (towards the Margin of Bank Guarantee as we....
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....ment dated 18.3.2010 and the relation which came into existence as a result of the agreement dated 18.3.2010. This is also evident from the fact that Mr. Khurana, as authorized signatory on behalf of the petitioner and its associates, himself has made reference of the said agreement dated 18.3.2010, particularly clause No.7.9 as well as clause No.4.1.1(xi) of the said agreement. Even in his subsequent letter dated 20.12.2010, Mr. Khurana has made reference of the meeting of the consortium when he claimed, in the said letter, that during the meeting of the consortium, it was decided to waive personal guarantees and collateral securities in form of movable and immovable properties, FDRs offered by the promoters and affiliates against the facilities sanctioned to MSK Projects (India) Ltd. The said aspects also give rise to rival contentions and allegations which involve disputed facts. 8.7 At this stage, it is appropriate to make reference of the factual aspect emphasized by the respondent in its reply affidavit. The said factual aspect also brings out the discrepancy between the facts mentioned by the petitioner and the facts emerging from the record. In paragraph No.11.3 of its rep....