TaxTMI 
TaxTMI 
2015 (3) TMI 23
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....th the appeal of the APO 452 of 2014. According to the appellant company, it has no outstanding dues to the respondent and the learned Single Judge erred in admitting the winding up petition. For the purpose of the disposal of this appeal and as also the cross-objection we first set out the undisputed facts of this case. The respondent in the appeal (APO 452) carries on business, inter alia, of factoring of receivables. The appellant company obtained supply of certain materials from Ramsarup Industries Ltd. (hereinafter referred to "as the borrower company"); The Borrower Company raised particular invoices on the appellant company for Rs. 4,00,06,655.52/- on account of price of such materials. The borrower company was in immediate need of funds, they approached the respondent for availing of the factoring service, that is, factoring against receivables. An agreement dated August 21, 2009 for the factoring of receivables was entered into between the respondent and the said borrower company (hereinafter referred to as the "said factoring agreement") providing, inter alia, that the respondent would make immediate payment, on account of the said invoices raised on the appellant, to t....
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....sum of Rs. 75 lac and 25 lac and the same were encashed by the respondent. In May, 2010, the respondent presented the said cheque for Rs. 4,00,06,655.52/- for enactment but the said cheque was dishonoured by Allhabad Bank on account of insufficient funds. In view of the dishounour of the said cheque of Rs. 4,00,06,655.52/- and subsequent failure of the appellant to pay the said sum of Rs. 4,00,06,655.52/- , the respondent filed a complaint under Section 138 of the Negotiable Instruments Act, against the appellant and its directors before the learned Judicial Magistrate, First Class, Gurgaon, Haryana (hereinafter referred to as "the learned Judicial Magistrate"). After receipt of the summons, the Managing Director of the appellant company appeared before the learned Judicial Magistrate, on September 27, 2010 and made over three demand drafts all dated September 25, 2010, issued by a bank of Kolkata for a sum of Rs. 30 lacs in favour of the respondent. Before the learned Judicial Magistrate the Managing Director of the appellant further stated on oath that he is wiling to effect compromise the matter with the respondent after admitting the liability on behalf of the appellant compan....
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....rms of Clause 4.2 the said factoring agreement, the borrower company was holding all such sums in trust for the respondent. According to the appellant, it was the borrower company who is liable to pay the said sum of Rs. 4,00,06,655.52/- to the respondent. In support of claim that they have already made payment in respect of the said twenty nine invoices in to the borrower company the appellant relied on a statement issued by its bank. By the impugned order, the learned Single Judge did not accept any of the contentions of the appellant company and admitted the winding up application for a sum of Rs. 3,00,06,655/- . The learned Single Judge, however, granted opportunity to the appellant to make payment of the said sum of Rs. 3,00,06,655/- in three equal monthly installments. In the mean time the borrower company has become a sick industrial undertaking within the meaning of the provisions contained in Board of Industrial and Financial Reconstruction (Special Provisions) Act, 1985 and its reference to the Board of Industries and Financial Reconstruction has been registered with BIFR. Challenging the order of the learned Single Judge admitting the winding up application, Mr. Samit T....
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....by the borrower company. The second letter is from the said borrower company to the appellant, is also dated June 2, 2010. By this letter the said borrower company alleged that they had already instructed the respondent not to deposit the said cheque dated February 23, 2010 for the said sum of Rs. 4,00,06,655.52/- and the amount claimed by the respondent in the notice dated May 28, 2010 is not the liability of the appellant. According to Mr. Talukdar as indicated in the said letter dated June 2, 2010, a copy of the said letter was forwarded to the respondent. It was strenuously argued, that the said statement of bank account of the appellant, as was disclosed by the supplementary affidavit before the learned Single Judge and the said letters both dated June 2, 2010 exfacie substantiate the defence of the appellant that no money remained outstanding from the appellant to the respondent and as such the learned Single Judge ought to have rejected the winding up application. With regard to the admission made by the Managing Director of the appellant before the learned Judicial Magistrate and the payment of Rs. 30 lacs by three demand drafts, Mr. Talukdar submitted that those were all ....
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....cion and/or threat on the Managing Director on the appellant is absolutely unfounded. We have considered the submissions made on behalf of both the parties and perused the documents disclosed by them. In order to decide this appeal, we have to ascertain whether the defence disclosed by the appellant against the said claim of the respondent for Rs. Rs. 4,00,06,655.52/- is bona fide or not. The learned Single Judge held that the acknowledgment of liability is clear on replacement of the cheques drawn on Allahabad Bank by the cheques drawn on Bank of Baroda and the defence put up by the appellant, was not accepted. So far as the first defence of the appellant, that they were not party to the said factoring agreement between the respondent and the borrower company and they were not at all liable to make any payment to the respondent we find no merit. From the facts stated above, it is evident, the appellant had received the notice of assignment dated November 19, 2009 issued by the borrower company and by their own letter dated November 19, 2009 addressed to the respondent, the appellant acknowledged its obligation to make payment to the respondent in terms of the said notice of assi....
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....ch contention of the appellant.. We have already found that the appellant company issued the said cheque of Rs. 4,00,06,655.52/- in favour of the respondent, to discharge their liability to the respondent on account of the purchase of the said materials covered by the said twenty nine invoices, issued on them by the borrower company. The payments of the various sums amounting to Rs. 3.85 crores by the appellant company to the Borower Company, as reflected in the statement of bank account of the appellant, are all in the month of March and April 2010. Upon dishonour of the said cheque of Rs. 4,00,06,655.52/- by the Bank of Baroda, on the ground of insufficient funds, the respondent issued a notice dated May 28, 2010, under Section 138 of the Negotiable Instrument Act, 1882 to the appellant which was replied by the appellant by its letter dated June 3, 2010. It is interesting to note that in the said letter dated June 3, 2010, the appellant only alleged that they have made payment to the borrower company who is liable to pay the dues of the respondent, but there is no mention of the particulars of such payment. Thereafter, on March 5, 2013 the respondent issued the notice under Secti....
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....to accept the contention made on behalf of the appellant company that the payment of the said sum of Rs. 3.85 crores reflected in the bank statement of the appellant were in respect of their dues to the respondent or that they had no liability to honour the said cheque of Rs. 4,00,06,655.52/- . In the instant case, it an admitted position that the appellant had issued the first cheque of Rs. 4,00,06,655.52/- in favour of the respondent and on February 19, 2010 substituted the said cheque by issuing a fresh cheque of Rs. 4,00,06,655.52/- and the said cheque remained unpaid. Thus, the onus was on the appellant company to prove that it had no liability to pay the said sum of Rs. 4,00,06,655.52/- to the respondent which the appellant company has failed to discharge. In the instant case, we find the defence put up by the appellant lacks bona fide and good faith. Thus, we find no merit in the appeal being APO 302 of 2014 and the same stands rejected. Interim orders, if any also stands vacated. Now, Mr. Vinayak in support of the appeal, being in APO 302 urged that the winding up application ought to have been admitted for Rs. 4,00,06,655.52/- and not for Rs. 3,00,06,655/-. The learned ....