TaxTMI 
TaxTMI 
2015 (2) TMI 1000
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....not paid despite demand and as such the petitioner got issued statutory notice dated 29.02.2012. No reply is stated to have been received by the petitioner. Hence, reminder notices dated 16.03.2012 was issued. Reply dated 29.02.2012 to the effect that the issue would be resolved amicably was issued, but to no avail. Hence, the instant petition was filed indicating the debt at US $30,682,251.01 (Approximately Rs. 153 Crores) as payable alleging that they are unable to pay the same. 3. The respondent company has filed its objection statement seeking to dispute the payment due as claimed by the petitioner. The defects in the V 2500 engines fitted in the 'Kingfisher' aircrafts is contended. In that regard the civil suit in O.S.No.6406/2012 filed by the respondent company against the petitioner and the joint venture partners viz., Rolls Royce plc., Pratt & Whitney, Japanese Aero Engines Company is referred to. In that view it is contended that there are serious disputes involved. It is therefore contended that the corporate guarantee dated 10.11.2010 and 01.08.2011 stand vitiated and are void, non-est and of no legal effect. The respondent seeks to disassociate itself from the ....
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....t complies with the requirement of filing documents with the Registrar of Companies. Further, the approval of Reserve Bank of India under the Foreign Exchange Management Act, 1999 ('FEMA' for short) not being obtained is also contended. The respondent further contends that it is a solvent company, hence they seek dismissal of the petition. Co. P. No.162/2013 7. The petitioners herein are a consortium of banks which had entered into transactions with 'Kingfisher'. Since the amount due was not paid, lenders meeting was convened in April 2010. A debt recast package was evolved and a Master Debt Recast Agreement dated 21.12.2010 was entered, which was thereafter amended by an agreement dated 24.12.2010. A pledge agreement dated 21.12.2010 was entered by Kingfisher Finvest (India) Limited pledging the shares as agreed therein. In respect of the above stated transactions between the Banks and 'Kingfisher', the respondent company executed Corporate guarantee agreement dated 21.12.2010. A personal guarantee dated 21.12.2010 is also stated to have been executed by Dr. Vijay Mallya. After execution of the agreements, additional loan is stated to have been advanced. ....
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....It is therefore contended that the guarantee relied upon cannot be enforced when there is serious dispute with regard to the same and is pending before the appropriate forum. Hence the dismissal of the petition is sought. Co.P.No.121/2012 11. The petitioner herein is a leasing company incorporated under the laws of England and is engaged among others in the business of Renting Air Transport Equipment including Aircraft Engines. The petitioner and its holding company are stated to have entered into Master Engine lease Agreement dated 30.09.2005 with 'King fisher'. In respect of the transaction entered into with 'Kingfisher', the respondent company is stated to have executed corporate guarantees dated 25.01.2006 and 27.09.2007 respectively. With regard to the said transactions, as the lessee failed to pay the amount due, the corporate guarantee is invoked. Since the respondent failed to pay the amount, the petitioner is before this Court by contending that the respondent is unable to pay its debts. The debt is quantified at US $527, 413.97 (amounting to Rs. 2,92,76,749.47) towards outstanding lease rent and US $5,855 (amounting to Rs. 3,25,011.05) towards interest, ....
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.... Aviation Turbine Fuel for Aircrafts. In that regard, the petitioner has entered into an Aviation Fuel Supply agreement dated 07.06.2010 with 'Kingfisher' for supply of Aviation Turbine Fuel as per the terms and conditions agreed therein. The billing cycle and the payment terms were agreed therein. The respondent company is stated to have executed a corporate guarantee dated 04.07.2012 guaranteeing all payments of the product upliftments made by 'Kingfisher'. It is contended that interest was also liable to be paid for the delayed payment of service charges. The petitioner contends that the amount due towards delayed payment service was not paid by 'Kingfisher' inspite of repeated demands and as such, by the letter dated 03.12.2012 addressed to the respondent company the corporate guarantee was invoked and the respondent company was called upon to pay the said amount. The repeated correspondence in that regard is referred to. Subsequently a statutory notice dated 06.03.2013 was issued and the instant petition is filed. The outstanding amount is indicated at Rs. 66,72,45,000/-. 16. It is contended that the respondent is unable to pay its debts and therefore ....
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..... Hence they are not entitled to bring any suit, claim any set off, make any counter claim or institute any legal proceeding in respect of such contract, dealing or transaction, until the provisions are complied. The learned counsel for the petitioners have on the other hand maintained that the said provision would be applicable only to foreign companies which establish a place of business within India. It is their case that the petitioners herein have not established a place of business in India, as such the compliance of Section 592 of the Act would not arise. 21. In the background of the assertion on the part of the petitioners, the respondent was required to prove that they have established a place of business in India as the mere fact that they are having business transaction with Indian customers would not be sufficient. Though the content downloaded purportedly from the website of the petitioner in Co.P.No.122/2012 is produced as Annexures-R8 and R9 to the objection statement, in the rejoinder of the petitioner it is denied that it pertains to them. In that light it is also explained that the screen shot of the web page of the Registrar of companies relied at Annexures-R10 ....
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....ounsel for the respondent has next contended that the petition filed before this Court by the foreign Companies is not maintainable since the guarantee relied upon provides that it is governed by, and shall be construed in accordance with, English law. The order dated 04.03.2014 in the case of The Bank of New York Mellon, London Branch v. Cranes Software International Limited (Co.P.No.203 of 2010)is relied to contend that the petitioners herein can institute proceedings only as per English law. Having perused the decision in the said case, it is seen that the agreement between the parties was referred and in that context, the decision was rendered in view of the specific provisions contained therein, more particularly Clause 20.3 thereof. In the instant case, apart from the fact that the petitioner in Co.P.No.57/2012 has already secured a judgment dated 05.07.2013 from the High Court of Justice, Queen's Bench Division, Commercial Court and is presently before this Court seeking the statutory remedy of winding up alleging that the respondent-company is unable to pay its debts, what cannot also be lost sight is that, in Co.P.No.248/2012 filed by a French Bank and in Co.P.No.185/2....
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....court and the writ petition was held as not maintainable. (c) The case of Delhi Gate Auto Service Station and others v. Bharat Petroleum Corporation Ltd. And others [2009] (16) SCC 766 )wherein, in a matter relating to dealership of petroleum outlet, the existence of arbitration clause, the award having been passed and the challenge to the same already pending was noticed and the dismissal of the writ petition on that ground was upheld. (d) The case of Orissa Power Transmission Corporation Limited and others v. Asian School of Business Management Trust and others (2013 (8) SCC 738)wherein, in a matter relating to framing of transmission schemes after referring to the facts involved therein, since earlier remedy was availed, it was held that the Court will not allow a party to pursue two remedies simultaneously. (e) The case of Patel Investments v. Credential Finance Ltd. [2001] Vol. 105 Comp. Cases 13)wherein, in a winding up petition it was noticed that the petitioner therein had already filed a suit for recovery wherein the authenticity of the acknowledgement of debt was seriously in challenge and in that circumstance the winding up petition was dismissed allowing the parties ....
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....a distinct statutory remedy though in appropriate cases, on facts, the Company Court may refuse to exercise its discretion to entertain a winding up petition. 29. In the above backdrop, the question is as to whether the bonafide dispute as sought to be made out by the learned senior counsel for the respondents is acceptable in the present facts ? In the cases on hand, the respondent company has sought to raise the issue with regard to the very validity of the corporate guarantee executed and relied upon by the petitioners in all these cases and it is contended that the same is in issue before the Civil Court and as such the winding up petition is liable to be dismissed. Even in the case of the foreign companies who have leased/sold the Aircraft engines, the defect in the engines is contended and in that context, an issue is also raised with regard to the validity of the guarantee. It is contended that a suit in O.S.No.6406/2012 is filed seeking that the corporate guarantee dated 10.11.2010 and 01.08.2011 be declared as vitiated and are void, non-est and of no legal effect; to restrain the petitioners from taking further steps based on the same and a decree for counter claim for da....
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....deration or the execution thereof, then the Court would be compelled to refer such a petitioner to the civil Court for obtaining the necessary decree before he can move the company Court for a winding up order. (d) The case of Divya Export Enterprises v. Producin Private Ltd. (ILR 1990 Karn 1610) wherein it is held that while examining a petition under Section 433(e) of the Act, discretion has to be exercised by the Court in the manner of any other judicial discretion. If the respondent company pleads a defence in good faith and puts forth a substantial case against the petitioner's claim, the petition for winding up will be rejected. It is held that the guidance to find out whether the defence is bonafide and one of substance, reference to the principles enunciated under Order XXXVII Rule 3 CPC may not be irrelevant. It is further held that a plea which is frivolous, a mere moonshine and which on the face of it cannot be accepted or clearly an afterthought, cannot be termed as raising a bonafide dispute. The circumstance to examine the same could be that the respondent company may have admitted the liability on earlier occasions; it might have kept quiet without responding to....
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....nquiry after hearing the petitioning creditor and the company on notice will have to arrive at prima facie findings; whether the petitioning creditor is a creditor to whom the company owes an ascertained or substantially ascertained sum of money; whether such debt is within limitation; whether the defence of the company is valid and bonafide or whether it is a mere moonshine and whether from the material on record at this stage, a presumption arises that the company is unable to pay its debts. Decisions on the same point rendered by various High Courts are also referred by the learned counsel for the petitioner Banks, but it is not necessary to refer to each of them as a matter of duplication on the same point. 35. A collective perusal of the decisions cited by the learned counsel which has been referred in sufficient detail will disclose that irrespective of the ultimate decision taken in each of the cases cited, the decision leading to the same should be, as to whether the defence set up by the respondent-company is a substantial bonafide defence which is not a moonshine or a mirage of a defence used as a cloak to defeat the petition. 36. In that light, if the facts herein are ....
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.... earlier despite being the user of the engines. The learned senior counsel has however referred to the memo dated 07.02.2014 filed herein enclosing thereto the series of correspondence between 'Kingfisher' and the foreign companies. A perusal of the same would indicate that though certain issues relating to the engine has been raised, the first of the letter is on 20.03.2009, while the last is on 15.04.2010 and the remaining are the Newsflash and customer call presentation. The correspondences are all dated prior to the date of Corporate Guarantee dated 10.11.2010 and 01.08.2011. The rework agreement was entered into with 'Kingfisher' on 27.10.2010, a copy of which is produced with the objections dated 25.03.2014 filed to the memo. In that view, for the present the position subsequent to the agreement and the Corporate Guarantee would become relevant as the earlier correspondence would yield to the terms of the agreement between the parties. In this regard, the letters dated 19.08.2011, 03.09.2011 and 16.12.2011 from 'Kingfisher' refers to the payments being due and expressing regret for the delay. 39. Though the learned senior counsel for the respondent so....
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....stice, Queen's Bench Division. The learned senior counsel for the respondent company has however relied on the decision in the case of International Woollen Mills v. Standard Wool (U.K.) Ltd. (2001 (5) SCC 265)and in the case of K.M.Abdul Jabbar v. Indo Singapore Traders P Ltd. (AIR 1981 Madras 118)to contend that an exparte or summary judgment of the foreign Court would not be binding. The learned counsel for the petitioner foreign company on the other hand has relied on the decision in the case of China Shipping Development Co. Ltd. v. Lanyard Foods Ltd. [2008] (142) Comp. Cases 647- Bom) and in the case of Silver Shield Construction & Trading Ltd. v. Recondo Ltd. [1994] (15) CLA 92-Bom) referred to in the commentary, to contend otherwise. Be that as it may, in the instant case besides the said position there are other petitions also filed by the other creditors of the respondent company and in that light, the inability to pay the debts also needs to be noticed. 41. The learned senior counsel for the petitioner Banks apart from the averments made with regard to the poor financial condition of the respondent company has filed before this Court a memo dated 11.12.2014 enclosin....