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2018 (10) TMI 978
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....ot so deposited, the petition shall revive and shall stand admitted, returnable within six weeks from the date of default and be advertised in two local newspapers i.e. Free Press Journal (in English) and Navshakti (in Marathi) and in the Maharashtra Government Gazette. Delay in publication of the advertisement in the Maharashtra Government Gazette shall not invalidate the advertisement and shall not constitute non-compliance of this direction or of the Company (Court) Rules, 1959. (iv) The Petitioner shall deposit an amount of Rs. 10,000/- with the Prothonotary and Senior Master of this Court towards publication charges, within two weeks from the date of default, with intimation to the Company Registrar failing which the Petition shall stand dismissed for non prosecution. (v) The learned Counsel for the Respondent Company waives service of the Petition under Rule 28 of the Companies Court Rules, 1959. (iv) Petition is disposed of in the above terms." 3. Mr. Sancheti, the learned Senior Counsel for the appellant submits that this is not a case where any 'debt' can be said to be due and payable by the appellant to the respondent. In the absence of any debt due and payabl....
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....Companies Act. Further, until such allegations are adjudicated upon, there can be no question of determining any liability to pay. He submits that there are no proper pleadings in support of allegations of fraud or misrepresentation. In any case, he submits that there is no material on record to sustain any findings of fraud or misrepresentation. 8. Mr. Sancheti submits that the learned Company Judge has inferred fraud or misrepresentation on the basis of alleged discrepancies in the timings at which the trades were transacted at the NSEL. He submits that there were no pleadings in the company petition on the aspect of any alleged time discrepancy. Therefore, the appellant was deprived of opportunity to explain the same. In any case, such a time discrepancy, which even according to the learned Company Judge applies only to the second segment of the transaction i.e. T+25 (sale segment), is certainly not sufficient to infer any fraud. 9. Mr. Sancheti submits that the very institution of the winding up petition was an abuse of the process of law since such institution was for exerting undue pressures upon the appellant. He submits that it is evident that the respondent is trying to ....
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....ing in bona-fides. 13. To the query from the Bench, as to whether the appellant was raising the contention that the paired contracts which the respondent had instructed the appellant to transact at the NSEL were contrary to public policy or in breach of the mandate for which the NSEL had been established, Mr. Sancheti, the learned Senior Counsel for the appellant made it clear that the appellant was not raising any such plea, since, such a plea might affect several other trading clients of the appellant who may have transacted paired contracts at the NSEL. However, Mr. Sancheti stated that it is for the Court to consider this aspect in the light of certain observations in 63, Moons Technologies Limited (formerly Financial Technologies (India) Ltd. & others vs. The Union of India and others - 2017 SCC OnLine Bom 9297. 14. Mr. Dhond, learned Senior Counsel for the respondent however responded by stating that the issue of paired contracts being contrary to public policy or not does not arise in this matter, because the material on record overwhelmingly establishes that the amount advanced by the respondent to the appellant was never utilised for transacting any contracts, much less ....
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....ve Systems SDN. BHD - (2010) 10 SCC 553 where the Apex Court has held that it is settled law that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the winding-up petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding-up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding-up petition as a means of forcing the company to pay a bona fide disputed debt. A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The Company Court, at the stage of a winding-up petition is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. If the debt is bona fide disputed, there cannot be "neglect to pay" within the meaning of Section 433(1)(a) of the Companies Act, 1956. If there is no neglect, the deeming provision does not come into play ....
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....the respondent on 15th July, 2013. Based upon all such representations, there is no dispute whatsoever that the respondent paid an amount of Rs. 1,45,79,032/- towards the T+2(purchase segment) of the transaction vide RTGS. Even the appellant has never disputed the receipt of the amount of Rs. 1,45,79,032/- from the respondent. 21. Since there is no dispute whatsoever that the respondent had advanced and the appellant had received the amount of Rs. 1,45,79,032/- to carry out subject trades at the NSEL platform on 15th July, 2013, the onus was obviously on the appellant to at least prima-facie establish that such trades were indeed transacted by the appellant in the name of the respondent. In fact, as will be noted hereafter, it has been the specific defense of the appellant that such trades were indeed carried out in the name of the respondent though, after correction/modification of client code on the platform of NSEL. 22. The communication dated 29th September, 2014 addressed by the NSEL however maintains that the subject trades stand in the name of Sujana and not in the name of the respondent. Therefore, the onus of at least prima-facie explaining as to how the subject trades s....
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.... pertaining to your buy trade initially did not include your trade in White Refined Sugar M Grade. The aforesaid fact has already been conveyed to you by our earlier communications. 3.6 ............ ............ c. We reiterate that the dealer while punching in your buy trade for White Refined Sugar M Grade having Contract Specification No. SM30AMBL2 committed an error and realised his mistake on the very same day after trading hours. As the online platform of NSEL was not available after trading hours, the UCC for the said trades of White Refined Sugar M Grade was modified outside the online platform of NSEL for operational purpose. As a result of the error committee by the dealer, contract note pertaining to your buy trade initially did not include your trade in White Refined Sugar M Grade. However, revised contract note/s (hard copy as well as ECN) were sent to you at your registered address/e-mail ID. 3.8 With reference to Para 2 and 3 of your Notice, we reiterate that the dealer while punching in your buy trade for White Refined Sugar M Grade having Contract Specification No. SM30AMBL2 committed an error and realized his mistake on the very same day after trading hours. As....
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....e UCC for the Petitioner, the dealer entered the UCC of another client, namely, Ms. Sujana Sudini. The dealer realized the mistake on the very same day, but after the trading/market hours. As the online platform of NSEL was not available after trading hours, the UCC for the trade in White Refined Sugar - M Grade (Contract Specifications SM30AMBL2 / SM30AMBL25) was modified offline, outside NSEL's online platform. (xi) As the dealer of the Respondent realized his mistake after expiry of trading hours of NSEL, the trade in Refined Sugar - M Grade executed at the request of the Petitioner was modified offline and as such the subject trade appears in the name of another client named Sujana Sudini in whose account the subject trade was inadvertantly carried out by the dealer of the Respondent. [Emphasis supplied] 27. From the aforesaid, it is clear that the appellant, in opposition to the company petition, has raised the following specific defense :- (i) That the appellant's dealer committed an error in punching the correct Unique Client Code (UCC) in respect of the transactions undertaken by the appellant on the NSEL platform on 15th July, 2013. The appellant's dealer, ....
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....ere is no good reason to interfere with the impugned order on the basis of the secondary defense/contentions as aforesaid. 30. The respondent has pointed out that the appellant created an impression the trades transacted on 15th July, 2013, were in fact in the name of the respondent. It is only much later i.e. on or about 23rd April, 2014, in the course of the meeting held under the aegis of the Economic Offence Wing (EOW), that the respondent realised that the subject trades had no nexus whatsoever with the respondent. The respondent contends that even on 23rd April, 2014, the representatives of the appellant insisted that the subject trades were in fact in the name of the respondent and the confusion would be shortly cleared. However, no documents were produced on record in support of the plea that there was any error in punching in the correct UCC and that such error was in fact corrected in the records of the NSEL. Instead, on 6th May, 2014, the appellant chose to forward duplicate and unsigned contract notes including therein the subject trades. The respondent also pointed out that no delivery allocation reports (DAR) in respect of the subject trades were ever forwarded by th....
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....e to such discrepancy in the statutory notice issued by the respondent to the appellant. The appellant has responded to the statutory notice, but the discrepancy is not really explained. 33. Be that as it may, even if some credence is to be extended to the secondary defenses raised by and on behalf of the appellant, there would still be no reason to interfere with the impugned order. This is because the appellant has failed to produce on record even prima-facie proof in support of the primary defense raised by it in response to both, the statutory notice and the company petition. As noted earlier not a single document has been produced on record by the appellant to demonstrate that the appellant's dealer, either on 15th July, 2013 or even within 2-3 days thereafter actually corrected/modified or for that matter attempted to correct/modify the alleged error in punching in in the respondent's UCC in the record of the NSEL. This is despite the fact that the appellant, both in response to the statutory notice as well as in its reply opposing the company petition, has time and again asserted that such modification/correction was in fact carried out. Again, there is also no mate....
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....Santosh Mansingh Asst. Vice President 36. The circular, at the highest indicates that client code modification is permitted in certain circumstances and subject to compliance with certain conditions. However, the real question is whether in the facts and circumstances of the present case any client code modification was in fact carried out by the appellant in relation to the transactions on 15th July, 2013. The circular is certainly not any proof or even prima-facie proof that the appellant in the present case consistent with the terms of the circular or even otherwise, in fact carried out any client code modification. 37. If modification had indeed been effected by the appellant, as repeatedly asserted, then surely the same would have been reflected in the records of NSEL, which was fully operational between 15th July, 2013 and 30th July, 2013. Admittedly, no such modification/correction is reflected in the records of the NSEL. As noted earlier the NSEL by its communication dated 29th September, 2014 has very clearly stated the subject trades stand recorded in the name of Sujana and not in the name of the NSEL. Therefore, it is not possible to accept Mr. Sancheti's contenti....