Shahi Exports Pvt. Ltd. & Another vs Cmd Buildtech Pvt. Ltd.
2013 Latest Caselaw 4235 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Reserved on: 12th September, 2013
%                                 Date of Decision: 18th September, 2013

+      CO. PET. 468/2011

       SHAHI EXPORTS PVT. LTD. & ANOTHER        ..... Petitioner
                           Through: Mr. Parag P. Tripathi,
                                    Sr.Advocate,      with     Ms.
                                    Neelima Tripathi.
                    versus

       CMD BUILDTECH PVT. LTD.             ..... Respondent
                   Through: Mr.    Sanjay      Chhabra    with
                             Mr.Vaibhav Jairaj, Advocate

CORAM:
MR. JUSTICE R.V. EASWAR

                               JUDGMENT

R.V. EASWAR, J.:

1. By order dated 10.07.2013 the preliminary objections raised by the

respondent to the maintainability of the company petition were rejected

and the company petition was admitted.

2. The learned counsel for the petitioner submits that in view of the

order passed by this Court on 10.07.2013, it is evident that the respondent

is unable to pay its debts. He, therefore, contends that this is a fit case for

appointment of provisional liquidator and for winding-up of the company.

Reliance is placed on the judgment of this Court in Niti International

Ltd. vs. Shree Sagarmatha Distributors Pvt. Ltd., (2013) 1 Comp. L.J.

335. On the other hand the learned counsel for the respondent has argued

that the petition is merely used as a tool to exert pressure upon the

respondent-company. It is contended that there is no urgency to appoint a

provisional liquidator. It is pointed out that the respondent is building a

residential housing project at Kundli in collaboration with Ansal, a

reputed builder, and a part of the project land belongs to it. It is further

pointed out that the flats constructed in the project have been allotted to

hundreds of customers who have invested their hard earned money and

are awaiting possession and their expectations and hopes will be dashed if

a provisional liquidator is appointed and the winding-up proceedings are

ordered.

3. On merits it is submitted that the respondent has not availed of any

loan from the petitioner and that it had borrowed monies only from Sarla

Fabrics Pvt. Ltd. There was no notice of the amalgamation of Sarla

Fabrics Pvt. Ltd. with the present petitioner. It is further contended that

the advance of `2 crores made by Ms. Surabhi Sindhu as share

application money was appropriated towards the shares subsequently and

at any rate the two causes of action - the advancing of monies by the

petitioner and Ms. Surabhi Sindhu - cannot be clubbed in the present

petition. It is submitted that the amount acknowledged in the balance

sheet is only `4 crores and the respondent is agreeable to repay this

amount with interest as directed by this Court within four months to Sarla

Fabrics Pvt. Ltd. from whom the money was borrowed. It is contended

that at any rate, the defence raised by the respondent is substantial and,

therefore, the petitioner should be relegated to the civil court. The

appointment of provisional liquidator is vehemently opposed.

4. I have carefully considered the rival contentions and the written

submissions filed by both the sides. I do not see any force in the

submissions of the respondent. The submissions on merits have all been

considered in my order dated 10.07.2013. The question whether the

present petitioner can seek to recover the amount advanced by Sarla

Fabrics has been considered therein. It was found that there was an

amalgamation of Sarla Fabrics Pvt. Ltd. with Shahi Exports Pvt. Ltd. and,

therefore, the latter is competent to initiate proceedings for the winding

up of the respondent. The question of limitation was also considered in

the aforesaid order and held against the respondent and so was the

question as to whether the share application money could be considered

to be a debt. Since these issues have already been decided in the

aforesaid order, as rightly pointed out on behalf of the petitioner, it is not

necessary for me to traverse those issues all over again.

5. As to whether the appointment of a provisional liquidator would be

justified, I am satisfied that it is, having regard to the conduct of the

respondent-company. Initially, after notice was issued to the respondent

by this Court, some efforts were made at mediation and there were 9

hearings between 14.03.2012 and 04.09.2012 but nothing fructified. On

08.11.2012 the respondent stated before this Court that it will be able to

arrange funds by the sale of property at Solan, Himachal Pradesh and

prayed for 3 months time to make an initial payment of `3 crores. Time

was granted, but no payment was made. When the matter was taken up

again on 22.02.2013 the respondent submitted another proposal under

which it would transfer 3 immoveable properties in Solan and Yamuna

Nagar in favour of the petitioners, which was not acceptable to the

petitioners. Time was taken to submit a more concrete proposal. When

nothing was forthcoming a restraint order was passed by this Court.

Thereafter the respondent was allowed an adjournment subject to

payment of costs. When the matter was taken up on 05.07.2013 again an

adjournment was sought by the respondent which was opposed by the

petitioner. This Court did not allow the request and the matter was heard.

6. It is thus seen that right from November, 2007 when the amount

was advanced to the respondent for a period of 3 months, there has been

no attempt by the respondent to make any repayment except making

assurances which were not honoured. On 05.07.2013 two preliminary

objections were raised by the respondent to the maintainability of the

company petition one was on the ground that the loan was not given by

the present petitioner but was given by Sarla Fabrics Pvt. Ltd. This Court

rejected the objection on the ground that the Sarla Fabrics Pvt. Ltd. got

amalgamated with the present petitioner and the amalgamation was also

sanctioned by this Court. The other objection on the ground that the debt

was barred by limitation was also held against the respondent. This Court

also noticed that the point of limitation was never raised at any earlier

point of time. It was held that the plea of limitation was an act of despair

and frivolous and was taken only to delay the proceedings. This Court in

the aforesaid order also found that the legal contention taken by the

respondent on the basis of the judgment of a Single Judge of this Court in

Diwan Chand Kapoor vs. New Rialto Cinema Pvt. Ltd., 28 (1985) DLT

310 cannot be given effect to since it was noticed by the Court that the

judgment of the learned Single Judge was later reversed by a Division

Bench of this Court reported in Diwan Chand Kapoor vs. New Rialto

Cinema (P) Ltd., 1986 (60) Company Cases 276.

7. All the aforesaid facts, considered cumulatively, show that the

respondent is unable to pay its debts and, therefore, is taking frivolous

objections and consequently it is necessary to appoint a provisional

liquidator. The respondent has not made any payment so far to the

petitioner. All objections to the effect that there was no subsisting debt

were rejected. A copy of this petition be served on the Official

Liquidator („OL‟) attached to this Court within five days.

8. The OL attached to this Court is appointed as the Provisional

Liquidator („PL‟) of the Respondent. The OL is directed to take over all

the assets, books of accounts and records of the Respondent forthwith.

The OL shall also prepare a complete inventory of all the assets of the

Respondent before sealing the premises in which they are kept. He may

also seek the assistance of a valuer to value the assets. He is permitted to

take the assistance of the local police authorities, if required.

9. Publication of the citation of the petition be effected in the Delhi

Gazette, "The Statesman" (English) and "Veer Arjun" (Hindi) in terms of

Rule 24 of the Companies (Court) Rules, 1959 („Rules‟), by the

Petitioner. The petitioner is also directed to furnish a complete set of

petition to the official liquidator.

10. The Directors of the Respondent are directed to strictly comply

with the requirements of Section 454 of the Companies Act, 1956 and

Rule 130 of the Rules and furnish to the OL a statement of affairs in the

prescribed form verified by an affidavit within a period of 21 days from

today. They will also file affidavits in this Court, with advance copies to

the OL, within four weeks setting out the details of all the assets, both

movable and immovable, of the Respondent company and enclose

therewith the balance sheets, profit and loss accounts and copies of the

statements of all the bank accounts for the last three years. The

respondent is also directed to furnish the names, address and telephone

number etc. of its directors including the Managing Director, Chairman,

if any, to the official liquidator along with the statement of affairs.

A report be filed by the OL before the next date of hearing.

List the matter again on 15.01.2014.

(R.V. EASWAR) JUDGE SEPTEMBER 18, 2013 hs