Bombay High Court
Posco-India Pune Processing ... vs Poona Tools Pvt. Ltd on 11 January, 2018
Bench: K.R. Sriram
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY PETITION NO. 656 OF 2013
Posco-India Pune Processing Centre
Private Limited .. Petitioner
Vs.
M/s. Rojee-Tasha Stampings
Private Limited .. Respondent
WITH
COMPANY PETITION NO. 97 OF 2014
Posco-India Pune Processing Centre
Private Limited .. Petitioner
Vs.
Poona Tools Pvt. Ltd. .. Respondent
WITH
COMPANY PETITION NO. 98 OF 2014
Posco-India Pune Processing Centre
Private Limited .. Petitioner
Vs.
Automotive Metal Stampings
Private Limited .. Respondent
WITH
COMPANY PETITION NO. 99 OF 2014
Posco-India Pune Processing Centre
Private Limited .. Petitioner
Vs.
Ganage Pressings Private Limited .. Respondent
Mr.Shyam Kapadia a/w.Mr. Darshan R. Mehta and Ms. Krithika Anand i/b
Dhruve Liladhar and Co. petitioner (in all petitions).
Mr. V.P. Sawant a/w. Mr.Nikhil Patil i/b Prabhakar M. Jadhav for respondent
in all petitions.
CORAM : K.R.SHRIRAM, J.
DATE : 11TH JANUARY 2018
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P.C.
1 These petitions are seeking winding up of each of the companies in
each of the petitions on the ground that the companies are unable to
discharge its debt and are commercially insolvent.
2 The reason why all these four petitions have been clubbed together is
because the four companies belong to the same group, i.e., Ganage Group,
each of the four companies owe substantial amount of monies to petitioner
and the four petitions were listed together and a common consent order
was passed on 25th June 2014. The facts in all the four company petitions
are identical except that amounts differ. Therefore, I am only going through
briefly stating the facts in company petition No. 656 of 2013.
3 Petitioner is engaged, inter-alia, in the supply of steel products. The
company had approached petitioner with an offer to purchase petitioner's
products and entered into multiple sales contracts cum confirmations with
petitioner. Petitioner sold, supplied and delivered the goods to respondent-
company and raised various invoices. In company petition No. 656 of 2014,
petitioner has raised 21 invoices on the company for a total sum of
Rs.1,52,29,090.56. The company made an on account payment of
Rs.7,86,539.60 leaving an outstanding amount of Rs.1,44,42,550.90.
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Despite repeated emails, no amount was paid. Statutory notice dated 26 th
April 2013 was sent but no reply was given by the company. Hence,
petition came to be filed. On 25th June 2014, the following order was
passed :-
Heard the Learned Advocates appearing for the Parties and the
following order is passed by consent :
i. The Respondent Company has agreed to pay to the
Petitioner an amount of Rs. 6.07 Crores in full and final
settlement of the claims of the Petitioner in the above four
Company Petitions in 18 instalments starting from 30 th July,
2014 as under :
Sr. Nos. Date Amount
1 30th July, 2014 10,00,000
th
2 10 August, 2014 33,72,222
th
3 10 September, 2014 33,72,222
4 th
10 October, 2014 33,72,222
5 th
10 November, 2014 33,72,222
6 th
10 December, 2014 33,72,222
th
7 10 January, 2015 33,72,222
th
8 10 February, 2015 33,72,222
9 th
10 March, 2015 33,72,222
th
10 10 April, 2015 33,72,222
11 th
10 May, 2015 33,72,222
12 th
10 June, 2015 33,72,222
13 th
10 July, 2015 33,72,222
14 th
10 August, 2015 33,72,222
th
15 10 September, 2015 33,72,222
16 th
10 October, 2015 33,72,222
17 th
10 November, 2015 33,72,222
18 th
10 December, 2015 57,44,444
_ Total 6,07,00,000
ii. In the event of the Respondent Company failing to pay
any of the above instalment, the Company Petitions shall
revive withoutreference to this Court, stand admitted, made
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returnable within six weeks from the date of default and
advertised in two local newspapers i.e. Free Press Journal (in
English) and Navshakti (in Marathi) and in the Maharashtra
Government Gazette. 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 Petitions shall stand dismissed for non-
prosecution.
iii. In the event of any default the Official Liquidator shall
forthwith stand appointed as Provisional Liquidator of the
Company. He shall immediately take charge of the books,
records as well as the movable and immovable properties of
the Company.
iv. In the event of default and consequent Admission of the
Company Petitions, Notice under Rule 28 of the Companies
(Court) Rules, 1959 shall also stand waived on behalf of the
Company.
v. The above Company Petitions are accordingly disposed of.
4 As respondent company committed default, petitioner filed an
affidavit of one Jin Deok Park sworn on 12 th February 2015 in which it is
stated that the company defaulted on the amounts payable and out of the
total amount of Rs. 6,07,00,000/-, which though it agreed to pay, as stated
in the order dated 25th June 2014, only a sum of Rs.12 lakhs was paid.
5 In view of the self operative order, the petition came to be admitted
and advertised. Notice under Rule 28 of the Companies (Court) Rules,
1959 stood waived by the consent order. Petitioner has also filed an
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affidavit of one Sandip Rikame affirmed on 19 th January 2016 confirming
advertisement the admission of the petition in Free Press Journal and
Navshakti on 15th January 2015 and also in Maharashtra Government
Gazette in the issue dated 5 to 11 March 2015 at Sr. No. 660.
6 After additional affidavit of petitioner was filed, respondent-company
filed an affidavit of one Rohit R. Ganage affirmed on 15 th September 2017
opposing the petition. The defences raised are as under :-
(a) Petitioner has suppressed the fact that the petitioners insurance
company Ksure, Korea has paid the claim of petitioner and
therefore by suppressing this fact, petitioner is attempting unjust
enrichment.
(b) Petitioner having received the amount from the Insurance
Company under the insurance claim, there was no longer a debt
outstanding and that petitioner is not a creditor of the company
and therefore this petition would not lie at the instance of
petitioner;
(c) Petitioner is not a creditor within the meaning of Section 433 and
434 of the Companies Act for a debt;
(d) The fact that petitioner had already received the amounts under
the invoices on the basis of which the petition has been filed,
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albeit from its insurance claim went unnoticed when these four
petitions were filed and respondent company could not bring it to
the notice of the Court at the appropriate time.
(e) Respondent, therefore, should be released from the statements and
undertakings made to this Court in consent terms of
Rs.6,07,00,000/-.
All the five points of defence can be dealt together.
7 Similar points of defence were considered by this Court in an
unreported order dated 22nd December 2014 (S.J. Kathawalla, J.) in
Company Petition No. 294 of 2014 (Jiangsu Skyrun Wuxi Co. Ltd. Vs. Syrma
Technology Pvt. Ltd.). I am in respectful agreement with the conclusions
and findings of the learned Judge.
8 This Court has held that in a case where an assured has received
payments from the Insurance Company, assured is still entitled to proceed
against the third party and its obligation is only to make good the amount
paid by the insurer after having accounted for its own claim, i.e., to ensure
that the assured is not paid in excess of its claim. A third party cannot be
seen to take the defence that the claimant has already been paid out by the
insurer and, consequently, avoid making payment on that ground.
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9 In the case of Morley Vs. Moore1, the Court of Appeal considered a
situation where an insurer had paid the assured in respect of certain injury
caused to the vehicle of the assured, and specifically instructed the assured
not to pursue any action against the third party (on account of the 'knock-
for-knock' arrangement between the insurer and the third party's insurer).
The assured was held fully entitled to pursue his claim against the third
party notwithstanding his having received a substantial sum from the
insurer and the insurer's direct instructions not to pursue the matter. The
relevant parts of the judgment are reproduced below:
"Assuming that the Plaintiff still has his two rights: first to recover
the 281. 2s. 8d. from the insurance company on his policy, and,
secondly, to recover that same 281. 2s. 8d. as damages from the
wrongdoer, the simple solution of this matter is for the insurance
company to do that which they are entitled to do - namely, to ask
him to hand them that sum. That is a perfectly simple solution, but
I cannot see that the fact that they choose to forgo their right to
receive this sum from their assured imposes any obligation upon
him. The insurance company may choose to make the assured a
present of the 281. 2s. 8d., but that does not affect his legal right. I
think the sum and substance of it is this: that this case is not in a
class which resembles in any particular the case of Hirachand
Punamchand V. Temple. There is lacking, amongst other things,
what I think is the essence of that case - namely that as between
themselves and the father, by a bargain which was superimposed
upon and subsequent to the original contract between the money
lenders and the son, the money lenders obliged themselves to accept
the money in settlement, and, although it was held there was no
accord and satisfaction, the Court held that they had thereby
disabled themselves from suing the original debtor. Here there are
no facts resembling those facts, and for that reason I decline to
apply a case, decided with reference to an entirely different set of
facts, in circumstance to which hitherto nobody has ever suggested
that it was applicable.
1 1936 (2) KB 359
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I only want to add one other thing. I hope that the result of this
judgment will be that Plaintiffs will realize that they still have
whatever may be their full rights accompanied by whatever duties
result from the exercise of those rights, notwithstanding
arrangements made beyond the scenes between the insurance
companies."
10 Further, In the case of Yorkshire Insurance Vs. Nisbet Shipping Co.
Ltd. 2, which has been considered by various Indian authorities, it was held
as under:
"In my view, this case turns upon what is meant by the word
"subrogated" in this context. The doctrine of subrogation is not
restricted to the law of insurance. Although often referred to as an
"equity" it is not an exclusively equitable doctrine. It was applied by
the common law courts in insurance cases long before the fusion of
law and equity, although the powers of the common law courts
might in some cases require to be supplemented by those of a court
of equity in order to give full effect to the doctrine; for example, by
compelling an assured to allow his name to be used by the insurer
for the purpose of enforcing the assured's remedies against third
parties in respect of the subject matter of the loss. In his classic
judgment in Castellain v. Preston, Brett L.J. was dealing with an
unvalued policy, but for the purpose of analysing the principle I can
at the present stage ignore the complication which arises when the
policy is a valued one. Brett L.J. based the application of the
doctrine of subrogation to policies of insurance upon the
fundamental principle "that the contract of insurance contained in
a marine or fire policy is a contract of indemnity, and of indemnity
only, and that this contract means that the assured, in case of a loss
against which the policy has been made, shall be fully indemnified,
but shall never be more than fully indemnified."
The expression "subrogation" in relation to a contract of marine
insurance is thus no more than a convenient way of referring to
those terms which are to be implied in the contract between the
assured and the insurer to give business efficacy to an agreement
whereby the assured in the case of a loss against which the policy
has been made shall be fully indemnified, and never more than
fully indemnified.
2 (1962) 2 Q.B. 330
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Two consequences flow from this: first, "subrogation" is I concerned
solely with the mutual rights and liabilities of the parties to the
contract of insurance. It confers no rights and imposes no liabilities
upon third parties who are strangers to that contract, It vests in the
insurer who has paid a loss no direct rights or remedies against
anyone other than the assured. He cannot sue such parties in his
own name (see Simpson v. Thomson; he is bound by any release
given by the assured to a third party (see West of England Fire
Insurance Co v. Isaacs. The insurer's rights against the assured
cannot be affected by any subsequent contract, or dealing between
the assured and a third party. (Boag v. Standard Marine Insurance
Co. Ltd. ; West of England Fire Insurance Co. v. Isaacs."
Therefore, the Company's submission that the present proceeding is not
maintainable on the basis that petitioner had already received money in
lieu of its claim against the Company from the insurance company is, in my
view, without any basis in law and accordingly rejected.
11 In PVD Plast Mould Industries Ltd. Vs. ING BHF Bank
Aktiengesellschaft3, a Division Bench of the Gujarat High Court which had
an opportunity to consider a similar situation in respect of a company
petition for winding up, and the Court held that the company cannot say
that once the insurance company has paid the money to the principal
creditor, then the company is not answerable to anybody. The company is
still liable. The relevant part of the said judgment reads as under :-
"In the present matter, it is to be seen that the loan was taken by
the company somewhere in the year 1993 and the company which
claims to be running profit making assetful company, did not
discharge its liability within the statutory period despite the
demand notice and the insurance company had to discharge the
3 2008(144) Company Cases 484, Gujarat
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liability. The endeavour of Mr. Soparkar was to convince us that if
the creditor company has already received 95 per cent of the loan
amount and the insurance company has not lodged its claim
against the appellant company, the court must not exercise its
discretion in favour of the admission of the winding up matter. The
argument is one of frustration. We are unable to understand the
logic behind the said argument. It is not the case of the appellant
that certain goods were insured and in lieu of the goods, the money
has been paid by the insurance company to the principal creditor.
In fact, the loan amount/loan transaction was insured. The
Petitioner cannot say that once the insurance company has paid the
money to the principal creditor, then the appellant company is not
answerable to anybody. The appellant company is still liable and
applying the principle of subrogation, the insurance company can
always recover the money from the appellant and in any case, if the
money is received by the creditor company then, to the extent of the
receipts, the creditor company would refund the money to the
insurance company. That would be a matter between the insurance
company and the creditor company. The debtor is not entitled to
take any benefits out of the said transaction."
12 Therefore, as held by His Lordship Hon'ble Shri Justice
S.J.Kathawalla in Company Petition No. 294 of 2014 with whom I am in
respectful concurrence, petitioner is indeed entitled to file the above
company petitions against the company and the petitions as filed are
maintainable in law. The only obligation that falls upon petitioner is in
respect of receipt of sums from respondent which may be in excess of
petitioner's claim to which extent the insurance company would be entitled
to seek recovery of such sums from petitioner. This, however, would be the
subject matter of separate proceedings between the insurance company
and petitioner and does not merit any further consideration at the stage of
admission of this present Company Petition. The submissions that the claim
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under petition was not a 'debt' and petitioner is not a creditor of the
company but the claim is for 'damages' and there was no ascertained
liability which can be proved only in a Civil Court, in my view, is not
tenable and requires to be rejected. There is no question of the claim being
in respect of damages or being un-ascertained in any manner whatsoever.
On the contrary, the amount claimed, I am satisfied, are admittedly
ascertained and due and payable by the company to petitioner. There is no
dispute in respect of the admitted outstanding of Rs.6,07,00,000/- payable
by respondent.
13 It should also be noted that respondent has, in fact, made a false
statement in the affidavit in reply that it came to know only in July/August
having received the insurance money. The email annexed at 'Exh.1' to the
affidavit in reply is a forwarded CC from D. M Pawar of Ganage Group
(email ID : [email protected]) sent to his advocate on 28 th July
2015. The said D.M. Pawar has forwarded an email that he has received
from one Sambhaji Shahapure on 28 th July 2018 and from the email, it is
seen that the said Mr. Shahapure has received the email from one Abhishek
Aggarwal from Ksure on 14th June 2012 that Ksure has paid the insurance
claim of petitioner. Despite being aware of the claim being settled by the
insurance company, respondent-company submitted to the consent order
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dated 25th June 2014 and thereafter to come and told the Court by way of a
consent order that respondent-company came to know only in July/August
2015 that insurance company Ksure has settled the claim of petitioner
company, is ex-facie a false statement.
The falsity of respondent's case that it came to know in July/August
2015 is also belied by the fact that respondent had even sent an email
dated 30th July 2014 to Ksure with copy to petitioner, print out of the said
email is at Exh.'B' to the affidavit in rejoinder and that has not been denied
by the company and therefore, it is quite obvious that they are making false
statements.
14 It should also be noted that respondent company did not even reply
to the statutory notice that was sent by petitioner to respondent company.
It is settled law that where no response to a statutory notice has been
made, the court may pass a winding up order on the basis that amount
claimed has not been denied by the company and there is a presumption of
inability to pay by the company. Where no response has been made to the
statutory notice, the respondent-company runs a risk of winding up
petition being allowed. By virtue of Section 434 of the Companies Act 1956
a presumption of the indebtedness can be legitimately drawn by the court
where no reply to the statutory notice is forthcoming.
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15 It should also be noted that in the affidavit in reply, there is not even
a mention that the company is commercially solvent. On the contrary, there
is an email dated 30th July 2014 (Exh.'B') from respondent-company to
petitioner and also to Abhishek Aggrawal of Ksure that the company has
been declared as non-performing Asset and its bank account has also been
frozen.
16 In the circumstances, I am satisfied each of the companies are unable
to discharge their debts, are commercially insolvent and require to be
wound up. Company petitions allowed in terms of prayer clauses (a) and
(b) which read as under :-
COMPANY PETITION NO. 656 OF 2013
(a) that M/s. Rojee - Tasha Stampings Private Limited be
ordered to be wound up by and under the directions of this
Hon'ble Court under the provisions of the Companies Act, 1956.
(b) that the Official liquidator, High Court, Bombay be
appointed as the Liquidator of the said Company with all powers
under the Companies Act, 1956.
COMPANY PETITION NO. 97 OF 2014
(a) that M/s. Poona Tools Pvt. Ltd. be ordered to be wound up
by and under the directions of this Hon'ble Court under the
provisions of the Companies Act, 1956.
(b) that the Official liquidator, High Court, Bombay be
appointed as the Liquidator of the said Company with all powers
under the Companies Act, 1956.
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COMPANY PETITION NO. 98 OF 2014
(a) that M/s. Automotive Metal Stampings Private Limited be
ordered to be wound up by and under the directions of this
Hon'ble Court under the provisions of the Companies Act, 1956.
(b) that the Official liquidator, High Court, Bombay be
appointed as the Liquidator of the said Company with all powers
under the Companies Act, 1956.
COMPANY PETITION NO. 99 OF 2014
(a) that M/s. Ganage Pressings Private Limited be ordered to be
wound up by and under the directions of this Hon'ble Court under
the provisions of the Companies Act, 1956.
(b) that the Official liquidator, High Court, Bombay be
appointed as the Liquidator of the said Company with all powers
under the Companies Act, 1956.
17 Petitioner's advocate to forward an authenticated copy of this order
to the official liquidator who shall take immediate steps without waiting for
any notification.
18 The above company petitions accordingly disposed.
(K.R. SHRIRAM, J.)
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