S.E Investments Limited vs Intercon Infotech Pvt Ltd
2014 Latest Caselaw 1965 Del

           THE HIGH COURT OF DELHI AT NEW DELHI
%                                   Judgment delivered on: 21.04.2014
+        CO. PET. 98/2012
S.E INVESTMENTS LIMITED                                     ..... Petitioner
                           versus

INTERCON INFOTECH PVT LTD                                   ..... Respondent
Advocates who appeared in this case:
For the Petitioner         : Mr P. Nagesh.
For the Respondent         : Mr Sangram Patnaik & Ms Tania Sharma.
                             Ms Megha Bharara, proxy counsel for Ms
                             Ruchi Sindhwani for Official Liquidator.
CORAM:-
HON'BLE MR JUSTICE VIBHU BAKHRU

                                JUDGMENT

VIBHU BAKHRU, J (ORAL)

CA No. 1733/2013

1. This is an application filed by the respondent company seeking recall/stay/modification of the orders dated 17.01.2013 and 08.05.2013. By the order dated 17.01.2013, the petition was admitted and the Official liquidator was appointed as a Provisional Liquidator. Mr Sangram Patnaik, learned counsel appearing for the applicant states that he/Tania Sharma would file a Vakalatnama on behalf of the applicant (respondent company) within two days.

2. The applicant states that there was no liability towards the petitioner that was admitted and in the circumstances the appointment of the Official

Liquidator as a Provisional Liquidator was improper. It is further stated in the application that the intentions of the respondent were genuine and it desired to defend the matter as per law and in accordance with the available records. It is also contended that the winding up proceedings were not a legitimate means to enforce payment of a debt and therefore, the present petition was vexatious. The respondent has further asserted that the accounts maintained by the petitioner company do not reconcile with the accounts maintained by the respondent company.

3. It is noted that the notice was issued in the present petition on 29.02.2012 and despite sufficient opportunity being granted to the respondent, the respondent had failed and neglected to file their reply. The present application was moved on 03.02.2014 and while issuing notice, this court also gave an opportunity to the respondent to file a reply to the petition before the next date. Accordingly, the said reply was to be filed on or before 12.03.2014. This opportunity was also not availed of by the respondent and the respondent failed to file the reply within the specified period.

4. When the present application was taken up for hearing on 21.04.2014, the learned counsel for the respondent stated that a reply to the petition had been filed on 19.04.2014. Although, there is neither any application nor any ground for taking the same on record, nonetheless to avoid any further delay and in the interest of justice, I felt it was proper to consider the same. The applicant was also permitted to rely on the said reply to show that the debt claimed by the petitioner was disputed.

5. The present petition has been filed by the petitioner alleging that the respondent is unable to pay its debts and, therefore, should be wound up, under Section 433(e) of the Companies Act, 1956. The learned counsel for the petitioner has placed a loan agreement dated 11.05.2010 on record which indicates that the respondent had sanctioned a loan of `1,25,00,000/- (one crore twenty five lacs) to the respondent for its business needs. As per the schedule to the said agreement, the loan was to be repaid in 24 equal monthly instalments of `6,17,188/- each. The first instalment was payable on or before 12.05.2010. Admittedly, the said loan was disbursed. The reply filed by the respondent also does not dispute this fact. The petitioner has also stated that it had received a sum of `43,75,000/- (forty three lacs seventy five thousand) as cash collateral, from the respondent. This amount was to be kept in a fixed deposit carrying a simple interest at the rate of 9.2% per annum. The proceeds of the fixed deposit were to be remitted to the respondent on the repayment of the loan of `1,25,00,000/-. Although, the respondent has stated in its reply that the averment that the said amount was given as a cash collateral is disputed, the respondent has failed to disclose any other reason for paying this amount to the petitioner.

6. I have heard Mr Patnaik, learned counsel for the respondent. He submitted that since there was no document admitting the liability, therefore, the present petition ought not to have been admitted. He has also drawn my attention to the notice dated 07.10.2011 caused to be issued by the petitioner, under Section 434(1)(a) of the Companies Act, 1956. He submits that the figures stated in the said notice are apparently inaccurate. The said notice had called upon the respondent to pay a sum of

`74,06,256/- on account of the instalments that were due and unpaid and `37,97,034/- on account of late fee till 07.10.2011. The notice also clarified that in addition to the above a sum of `43,20,316/- towards future instalments would also be payable by the respondent. The learned counsel for the respondent states that the said figures are apparently incorrect as they do not take into account the cash collateral, admittedly, provided by the respondent to the petitioner. He further submits that it is inconceivable that a cash collateral would be provided carrying an interest at the rate of only 9.2% per annum while the petitioner would charge a higher rate of interest on the loan provided by the petitioner to the respondent.

7. In my view, the defence now sought to be raised by the respondent is a sham, moonshine and an illusory defence for the following reasons :-

7.1 First of all, the agreement dated 11.05.2010 is not disputed. As per the tenor of the agreement, the loan of `1,25,00,000/- was required to be repaid in accordance with the schedule appended thereto. The said schedule recorded that the loan would be repaid in 24 equal monthly instalments of Rs.6,17,188/- each. The fact that the loan in question had been disbursed by the petitioner is also an admitted fact. The petitioner has also produced the extracts of the minutes of the meeting of the Board of directors of the respondent company that record the corporate authority for availing of the said loan. This resolution has also not been disputed. In view of the fact that the loan was taken by the respondent, the respondent has only to show the manner in which it was discharged. However, apart from bald statements disputing the claim of the petitioner, the reply filed by the respondent fails to indicate the manner

in which the loan had been discharged or indicate any other credible defence.

7.2 Secondly, the petitioner has produced a letter dated 11.05.2010 which records that the cash collateral of `43,75,000/- would be kept in a fixed deposit carrying a simple interest of 9.2% per annum. This document is also an admitted document. Although, the respondent has denied that the said amount had been given as a cash collateral, the respondent has failed to indicate the reasons for making the said payment to the petitioner. Even if it is assumed that the said amount had been paid in discharge of the loan and the said amount is set off against the principal of Rs. 1,25,00,000/-, even then an amount of Rs. 81,25,000/- would be payable by the respondent in addition to interest thereon. The respondent has failed to indicate as to how the said liability had been discharged. Thus, in my view the conclusion that the respondent has failed to discharge its debt in inescapable.

7.3 Thirdly, certain cheques given by the respondent towards repayment of instalments have been dishonoured is also indisputable. The reply filed by the respondent also does not offer any explanation for the issuance/dishonour of the cheques. It is also not the case of the respondent that the amount for which the cheques had been issued, had been paid to the petitioner otherwise than towards repayment of instalments. I am thus, unable to appreciate as to how the respondent can contend that there is no debt owed to the petitioner.

7.4 Fourthly, the affidavit filed on behalf of the respondent indicates that

except three vehicles, which are also hypothecated, respondent has no other asset. This itself indicates that the respondent is not commercially solvent and is liable to be wound up.

8. The endeavour of the learned counsel for the respondent has been to cast a doubt on the quantum of debt claimed by the petitioner in its notice and the accuracy of the figures stated in the said notice. However, I am unable to accept that a mere error in the quantum of debt claimed would be fatal to the present petition. Failure on the part of a company to repay or secure the admitted debt despite a notice calling upon the company to discharge it debts within 21 days triggers the deeming provision under Section 434(1)(a) of the Act. The company is, however, liable to be would up because of its inability to pay its debt. Thus, even if it is accepted that the notice issued by the petitioner did not specify the accurate figure of the debt due to the petitioner, the respondent could indicate the quantum as admitted by it and offer the same. However, in the present case, even at this stage, the respondent has neither specified the amount, which according to the respondent would be payable nor offered the same to the petitioner.

9. In view of the above, there is no doubt that a debt is owed and payable by the respondent company to the petitioner and the the respondent is unable to pay the same. The present application is only a device to delay the present proceedings. In my view, the present application is malafide and the pleadings filed in the reply as well as by way of the present application are drafted to conceal more than they reveal. The respondent has failed to unequivocally state the amount that it has repaid and the quantum of interest that according to the respondent was payable to the

petitioner. The present application is, accordingly, dismissed.

CO.PET. 98/2012

10. The citations have been published in the 'Business Standard' and 'Jansatta' on 07.02.2013.

11. List for consideration on 24.07.2014.

CA No. 745/2013

Issue summons. Mr Patnaik, learned counsel for the respondents accepts summons.

Respondent nos. 1 to 3 are to appear before this Court on 24.07.2014.

VIBHU BAKHRU, J APRIL 21, 2014 RK