Delhi High Court
Changzhou Trina Solar Energy Co. ... vs Hindustan Power Projects (P) Ltd. on 29 May, 2017
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 22nd May, 2017
Pronounced on: 29th May, 2017
+ CO.PET. 584/2014
CHANGZHOU TRINA SOLAR
ENERGY CO. LIMITED ..... Petitioner
versus
HINDUSTAN POWER PROJECTS (P) LTD. ..... Respondent
+ CO.PET. 585/2014
CHANGZHOU TRINA SOLAR
ENERGY CO. LIMITED ..... Petitioner
versus
HINDUSTAN POWER PROJECTS (P) LTD. ..... Respondent
Presence : Mr.Vivek Sibal, Ms.Pooja M.Saigal, Advocates for
petitioner.
Ms.Maneesha Dhir, Mr.KPS Kohli and Mr.Milin Singh
Negi, Advocates for respondent.
CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA
YOGESH KHANNA, J.
CA No. 9/2016 in CO.PET. 584/2014;
CA Nos.10/2016 in CO.PET. 585/2014
1. These applications have been moved by the petitioner under
Rule 6 & 9 of the Companies (Court) Rules, 1959 praying for revival
of the Company Petitions bearing Nos.584 and 585 of 2014 and
consequently for the liquidation of respondent company. The
petitions were disposed of vide order dated 12.01.2015.
2. Both the parties had entered into a settlement and filed the
consent terms with this Court along with a settlement agreement
dated 08.01.2015. As per the settlement, an amount of USD
30,379,115.60 cents were to be paid by the respondent company to
the petitioner, in 12 equal monthly installments as enumerated in the
said agreement. The said agreement was entered pursuant to the
mutual discussions where such an amount was offered by the
guarantors in full and final settlement of total outstanding of USD
35,740,136 (including principal amount of USD 34,038,225 and
liquidated damages to the tune of USD 1,701,911).
3. Per clause 4 of the said settlement agreement, the guarantor had
undertaken that in case of a default / deviation in the payment
schedule of settled amount of USD 30,379,115.60 cents, the entire
outstanding amount of USD 35,740,136 (including the liquidated
damages to the tune of USD 1,701,911 less any amount paid by the
guarantor under that agreement) along with interest @ 12 % per
annum on the balance amount starting from the date of such default
till the payment, shall immediately became due and payable by the
respondent to petitioner.
4. The petitioner says that barring first six installments, none of
remaining installments were paid in time and were rescheduled again
and again at the instance of the respondent company. Reference was
made to an order dated 12.01.2015 of this Court where the
undertaking given by the respondent was accepted by the Court and
the respondent was directed to remain bound by the same.
5. But since there was default so CA No.3055/2015 and
3057/2015 were moved in Company Petition Nos.584/2014 and
585/2014 respectively seeking revival of the petitions in terms of the
order dated 12.01.2015 stating inter alia that the respondent had
failed to perform its obligation in terms of the settlement.
6. Notices were issued to the respondent company. Appearance
was entered on behalf of the respondent and on 09.10.2015 it was
pleaded that default occurred due to adverse business conditions
beyond the control of the respondent and it reiterated that the
respondent shall be committed to make the outstanding payments as
envisaged in the settlement between the parties on or before
15.11.2015 along with the interest @ 12% pa. Looking at the overall
circumstances and with a view to assess the bonafides of the
respondent, the matter was listed for further consideration on
04.12.2015.
7. On 04.01.2016, yet again CA Nos.9/2016 and 10/2016 were
moved in respective petitions stating inter alia that the respondent
had again failed to adhere to the settlement terms and hence
Liquidation Petition(s) be revived again. Notices were issued and
even the assistance of the learned Official Liquidator was sought. On
19.02.2016, the learned counsel for respondent submitted that the
total outstanding amount is USD 30,379,115.60 cents, out of which
an amount is 18 Million USD along with interest @ 12% pa has
already been paid and that the respondent would clear the entire
balance amount by 30th April, 2016. However, even the date of
30.04.2016 was not adhered to hence it is argued by the petitioners
that their application bearing CA Nos.9/2016 and 10/2016
respectively be allowed and the liquidation proceedings against the
respondent be revived.
8. On the contrary, the learned counsel for the respondent argued
that they had cleared the entire payment as envisaged in the
agreement by 03.05.2016 and had rather paid about USD 1 Million
towards interest for delayed payment of the agreed principal amount
of USD 30,379,115.60 and as the entire payment was cleared by
04.05.2016, including the default amount with agreed interest of 12%
p.a., the liquidation proceedings cannot be revived against its running
company with 4200 employees, especially when the petitioner had
not offered to deposit the amounts so received by it under the
settlement agreement. It is argued that though there was delay in
payment of installments but the time to pay the installments was
extended by the Court and thus such delayed payments were made
though, with interest @ 12% pa.
9. Admittedly, the amount so settled between the parties was to be
paid by 30th April, 2016 and that it could not be paid by the
respondent by such date and the time was extended by the orders of
this Court firstly till 15.11.2015 with interest @ 12% p.a., and then
for further periods till the entire payment was cleared by the
respondent by 03.05.2016.
10. Thus where the petitioner company had received an huge sum
of USD 31 million approx. under the settlement agreement would it
then be entitled to seek revival of the liquidation proceedings, seeking
resort to Clause 4 (supra). The answers would be "No".
11. It is the settled law that if the time limit is provided by a
consent order, the Court has the jurisdiction / power to extend such
time on the basis that when such consent terms are filed by the parties
and accepted by the Court, such terms merge in the order of the Court
and then the Court is well within its power to extend the time for
making payments of the installments. Rule 9 of the Company (Court)
Rules confers inherent powers upon this Court to pass any order in
the interest of justice and hence it has the discretion to grant extension
of time.
12. In Marketing and Advertising Associates Pvt Ltd vs. Telerad
Private Limited (1969) 39 Company Cases 436 (Bombay) it was
held as under:-
30. It was next urged that the order was, so to say,
an automatic order making a complete provision
for all matters settled between the parties and that
therefore the court was precluded from interfering
with that order in any way and extending the time
was such an interference. In the first place we do
not see what is really implied by saying that an
order is automatic or self-operative. Every order
passed upon consent makes provision for the
fulfillment of certain terms by either party and
usually provides for what is the consequence of
breach of any of its terms.
31. In that sense every order is an order which is
self-operative, but we do not see how, assuming
that an order is self-operative in this sense, it can
necessarily be inferred that the court's jurisdiction
to pass such orders as it deems fit in the interests
of justice, can be limited or taken away. Turning to
the consent terms upon which the order was
passed it is clear that the consequence of the non-
payment of the instalments is provided in clause 4
of the consent terms and the consequences which
flow are four in number. Firstly, that the petition
for winding up would stand admitted; secondly,
that the creditor (the appellants before us) would
be at liberty forthwith to apply for consequential
directions regarding advertisement and returnable
date; thirdly, that the respondent-company would
not be able to oppose such a application and,
lastly, that the entire amount of Rs.1,50,000 or the
balance remaining due on the date of default
would become payable immediately. Though these
consequences are provided in the settlement itself
and the order passed on the basis of the settlement,
we cannot see how these consequences lead to the
conclusion that the court's power of extension of
time is in any way curbed or taken away. None of
these clauses refers to the question of extension of
time or the condonation of delay in the payment of
the installments and we think that much more than
is stated in clause 4 would be necessary before an
ouster of the statutory power of the court conferred
by rule 7 can be inferred.
xxx
34. Therefore, even automatic or self-operative
orders passed upon consent do not necessarily
oust the jurisdiction of the court to condone delay
and extend time.
xxx
45. .......There is no indication therefore in clause
4 to suggest that it was the intention of the parties
that the order upon consent should be, so too say,
a Code in itself taking effect automatically without
any further reference to the Court.
xxx
51.......... The question then is, should this court
in appeal lend its assistance to a petition for
winding up the company when, although the
petitioner is being paid the full amount which he
bargained for, he deliberately does not accept it
and insists on the company being wound up. We do
not think that we can lend the aid of the court to
such a party."
13. Thus, per law discussed above, since the petitioner company
has accepted the payments in the extended period and that too with
interest on the default installments, then simply because there was
delay in making the payments under the settlement agreement, it
would not be justifiable to take recourse to clause 4 of the Settlement
Agreement and thus vitiating the efforts made by the Court to
conclude the settlement. After receiving huge payments with interest
and yet again making the respondent suffer liquidation proceedings
would be asking too much. The conditional offer made by the learned
counsel for the petitioner to deposit the amount so received only once
a liquidator is appointed is not acceptable and such a plea cannot be
allowed.
14. In view of above, the applications for revival of the liquidation
proceedings are dismissed. No order as to cost.
CA Nos.3055/2015 and 481/2016 in CO.PET. 584/2014;
CA Nos.3058/2015 and 474/2016 in CO.PET. 585/2014
15. In view of above order, the remaining applications stands
disposed of having become infructuous.
YOGESH KHANNA, J
MAY 29, 2017
M
