TaxTMI 
TaxTMI 
2014 (1) TMI 1955
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....ecuted between the respondent company and the petitioner bank. It is stated that an aggregate sum of Rs. 15 crores was disbursed by the petitioner bank to the respondent in the month of October, 2011 as under:- Date of Request/Disbursal Amount (Rs in crores) Date of repayment Loan Account No. 03.10.2011 2.90 31.12.2011 1101043 04.10.2011 2.10 01.01.2012 1101045 04.10.2011 2.50 01.01.2012 1101044 05.10.2011 2.50 02.01.2012 1101047 08.10.2011 3.00 05.01.2012 1101048 10.10.2011 2.00 07.01.2012 1101049 3. It is alleged that the respondent was irregular in making payments of interest and also failed to repay the loans on the respective due dates. The petitioner bank served a legal notice dated 09.01.2012 calling upon the respondent to pay a sum of Rs. 15 crores alongwith interest @ 13.50% p.a. w.e.f. 08.01.2012 and other charges etc. It is stated that subsequent to the said notice, the respondent company paid the interest due till the month of November, 2011 but failed to repay the loans as well as the interest for the period subsequent to November, 2011. The cheque for a sum of Rs. 15 crores, which h....
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....cluding the petitioner in the present case, on or before 15.03.2013. It is on the basis of the aforesaid undertaking by the Managing Director of the respondent company that this Court did not consider the prayer for winding up of the respondent company on that date and passed the following order:- "CO.PET.No.36/2012, CO.PET. No.66/2012 & CO.PET.No. 297/2012 Managing Director of the respondent Mr. Sanjeev Narula is present in the Court. Learned counsel for the petitioner points out that there has been no compliance with the last directions of this Court and there is no justifiable explanation qua the same. The payment schedule which had to be given in advance to the petitioner has admittedly not been given by the respondent. The explanation furnished by the respondent is that because of a financial crunch the company is facing a crisis but there is every possibility that the company will come out of all the woods by next date. It is undertaken by the managing director of the company that a sum of Rs. 1 crore shall be positively paid to each petitioner on or before 15.3.2013. Prayer of winding up is accordingly not being considered for the time being. On me....
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....33 lacs only. It is to be noted that although this application was filed, the same was not pressed. On 05.02.2013, the respondent once again sought extension of time for making the payment as undertaken on 17.12.2012 and to place a written proposal for clearance of the balance dues to the petitioning creditors. After considering the request of the respondent and also considering the fact that several adjournments had been granted to the Managing Director of the respondent, this Court granted a last opportunity to the respondent to submit a "concrete written proposal for clearance of the balance dues". Thereafter, it was proposed by the respondent that a sum of Rs. 1 crore would be paid by 31.05.2013 in equal instalments with Rs. 25 lacs being paid upfront. The respondent also submitted a proposal for repayment of the balance amount. The said matter was considered on 19.02.2013 wherein this Court passed the following order:- "1. Mr. Sumit Bansal, learned counsel for the Petitioner, states on instructions that the Respondent's proposal to pay the Petitioner Rs. 1 crore by 31st May 2013, in equal instalments, with Rs. 25 lakhs being paid upfront, is acceptable to the Petition....
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....tes that the amount of Rs. 27 lakhs will be paid in 3 installments on or before 10.11.2013, on or before 10.12.2013 and on or before 10.01.2014. In case, the amounts are not paid as above the statement made on 17.12.2012 to the effect that the respondent will not raise any objection to the automatic appointment of OL will come into effect. The respondent-company shall hand over all the documents to the petitioner within six weeks from today. These documents are relevant for the purpose of considering the proposal made by the respondent-company to the petitioner. Renotify on 24.02.2014." 10. It now transpires that the respondent company has failed to pay the installments due on 10.11.2013 and 10.12.2013 and are once again in default of their commitments made before this Court. It is on the facts as stated above that the petitioner has contended that a winding up order ought to be passed and, therefore, the petitioner bank has also filed an application (C.A. No.2333/2013) under Rule 6 & 9 of the Companies (Court) Rules, 1959, inter-alia, praying for the winding up of respondent company as the respondent has failed to pay the initial payment of Rs. 1 crore despite....
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....s liquidation of the dues of other lenders viz., Tata Capital Ltd., China Trust Bank etc." 14. The learned counsel further submitted that in view of the condition imposed by Allahabad Bank, no payments could be made by the respondent company to the petitioner and, therefore, the Managing Director was constrained to make payments to the petitioner from his personal account. He pleaded that the aforesaid mitigating circumstance ought to be considered by the Court and further time ought to be granted to the respondent company to revive and make payments to its creditors. He placed reliance on the decision of a Division Bench of the Gujarat High Court in the case of Tata Iron and Steel Co. v. Micro Forge (India) Ltd.: (2001) 104 Comp Cas 533 (Guj.) in support of his contention that the remedy under Section 433(e) of the Companies Act is not a matter of right and is at the discretion of the Court. He further emphasized that if a company had shown considerable growth then even in cases of temporary inability to pay its liability, the company would not to be driven to winding up. The learned counsel further relied upon the decision of the Orissa High Court in the case of Hindon Foods (....
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....nd undertakings on more than one occasion. (iii) The respondent company has failed to pay even a small fraction of the dues payable to the petitioner and given the agreed rate of interest, the dues payable to the petitioner as of date would be more than the amount payable to the petitioner at the time of institution of the present petition. (iv) The respondent company has in spite of sufficient time failed to even present a concrete scheme to repay the dues of its creditors. 18. Given the aforesaid position and the fact that the respondent has not placed any concrete scheme for repayment of dues by the respondent to its creditors, I do not think that the respondent is entitled to any further extension of time and there is no reason to defer the admission of the present petition. 19. With respect to the decision in the case of Hindon Foods (supra), the same is inapplicable to the facts of the present case. In that case, the High Court directed winding up of the respondent company, however, the operation of the order of winding up was stayed for a period of one year to enable the respondent company to discharge its admitted debts. In the present case, the resp....