Delhi High Court
Nitin Jain vs Ansal Hi-Tech Townships Ltd on 26 March, 2025
$~CO.21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 26.03.2025
+ CO.PET. 36/2016
NITIN JAIN .....Petitioner
Through: Mr. Rahul Jain and Mr. Prakhar Mani
Tripathi, Advocates.
versus
ANSAL HI-TECH TOWNSHIPS LTD .....Respondent
Through: None.
CORAM:
HON'BLE MS. JUSTICE TARA VITASTA GANJU
TARA VITASTA GANJU, J.: (Oral)
1. This Court had examined the matter on the last date of hearing and
had directed as follows:
"1. None appears for the Respondent.
2. Learned Counsel for the Petitioner submits that the matter is ripe
for hearing.
3. The record reflects that this Petition was filed seeking directions for
winding up of the Respondent company on 04.01.2016 and
concededly, thereafter, the Petitioner and the Respondent have entered
into a settlement agreement dated 23.09.2023. The settlement
agreement also forms part of the record.
4. Quite clearly, the winding up was filed pursuant to a statutory
notice dated 19.08.2015 wherein an outstanding amount of Rs. 35
lakhs was due to the Petitioner. Given the fact that the payment of Rs.
36 lakhs has already been made, a query has been put to the learned
Counsel for the Petitioner as to what survives in the present Petition.
5. Learned Counsel for the Petitioner requests for some time to take
instructions."
2. Learned Counsel for the Petitioner returned with instructions to argue
the present Petition and has been heard.
3. The facts in the present case are that the Petition was filed seeking
directions for winding up of the Respondent/Company on 04.01.2016.
Undisputedly, during the pendency of this Petition, a Settlement Agreement
was executed between the parties. The Settlement Agreement dated
23.09.2023 sets out that the Petitioner will receive a lump-sum payment of
Rs.72 lacs, i.e., Rs.35 lacs towards principle and Rs.37 lacs towards interest
and compensation in full and final settlement of all disputes pending in
respect of the said clause. It is apposite to set out Paragraphs 4 and 5 of the
Settlement Agreement executed between the parties in this behalf:
"4. However, without going into the merits of the said case filed
before Hon'ble Delhi High Court at New Delhi both parties to this
agreement reached into an amicable settlement voluntarily towards
Full & Final settlement/ payment of all dispute/ litigation pending
between the parties before the respective Authority/Court.
5. That as per the settlement, Client shall receive a total lumpsum
amount of Rs.72,00,000/- (Rupees Seventy- Two Lakh only) i.e.
Rs.35,00,000/- (Rupees Thirty- Five Lakh only) towards principal and
a sum of Rs.37,00,000/- (Rupees Thirty Seven Lakh only) towards
interest/ compensation as full and final settlement of all disputes
pending between the parties in respect of said Unit/ Plot.
The details of the said payments are as follows:
Sl.No. Dated Cheque Amount to be TDS Drawn In
No. paid in (INR) @10% on on favour
interest of
amount
1 23.09.2023 000087 17,07,500/- 92,500/- ICICI Nitin
Bank Jain
2 23.10.2023 000088 17,07,500/- 92,500/- ICICI Nitin
Bank Jain
3 23.11.2023 000089 17,07,500/- 92,500/- ICICI Nitin
Bank Jain
4 23.12.2023 000090 17,07,500/- 92,500/- ICICI Nitin
Bank Jain
Total Rs.68,30,000/- 3,70,000/- Nitin
only Jain
Total amount (Rupees Seventy- Two Lakhs only)"
4. Learned Counsel for the Petitioner submits that 4 cheques were
handed over to the Petitioner in pursuance of the Settlement Agreement. Of
these, the first 2 cheques were honoured. However, cheque Nos. 000089 and
000090 for the sum of Rs.17,07,500/- each, drawn on ICICI Bank, New
Delhi, were dishonoured.
5. On a query put by the Court, learned Counsel for the Petitioner
confirms that the Petitioner has initiated proceedings under the provisions of
Negotiable Instruments Act, 1881 in respect of the dishonour of these
cheques as well. Thus, the Petitioner has already taken steps in pursuance of
the failure of the Respondent to adhere to the terms of the Settlement
Agreement and the Respondent had partly been able to satisfy the debt
pursuant to the filing of this Petition.
6. Learned Counsel for the Petitioner submits that the Company Petition
would survive. In support of his contention, he seeks to rely on a judgment
dated 18.09.2009 passed by a Coordinate Bench of the Bombay High Court
in this behalf in Wall Street Finance Ltd. v. M/s. Corporate Couriers Ltd.
& Ors1.
7. This Court is unable to agree. The facts as in the Wall Street Finance
case are entirely different. Based on consent terms arrived at between the
parties, liability was admitted by a Company to pay an amount of a specified
sum of money being Rs.77,50,800/-. Clause 4 of the consent terms stated
that in the event that the company committed two successive defaults, the
Official Liquidator would be appointed to take possession of the properties.
The Petition was disposed of in terms of the consent terms. . Subsequently,
on account of multiple breaches of the consent terms, the Petition was
sought to be revived in accordance with the consent terms. Thereafter, a
Memorandum of Understanding [hereinafter referred to as "MoU"] was
executed between the parties in relation to the balance dues for which post-
dated cheques were issued. One of the clauses of the MoU stated that in the
event of breach of the MoU, the entire outstanding amount of Rs.77,50,800/-
would be payable. The MoU was also breached.
7.1 It was in these circumstances and in terms of the settlement terms,
that an order was sought for restoration of the Company Petition. It is not
disputed that the consent terms had clearly set out that the parties had the
liberty to revive the proceedings before the Company Court in the event of
two successive defaults. It is in these circumstances that the plea to keep the
Company Petition alive was accepted by the Bombay High Court. It is
apposite to extract Paragraphs 1 and 4 of the Wall Street Finance case
which sets this out below:
Company Petition No. 298 of 1997 of High Court of Bombay
"1.In a Company Petition under Section 433 of the Companies Act,
1956, Consent Terms were arrived at between the parties. In terms
thereof, an order was passed by this Court on 8th July 1999. Under the
Consent Terms, the Company admitted and acknowledged its liability
to pay to the Petitioner, a total sum of Rs.77,50,800/- in the manner
indicated in Annexure-A to the Consent Terms. Clause 4 of the
Consent Terms provided that in the event that the Company committed
default in the payment of any two consecutive installments, the
Official Liquidator shall stand appointed and will forthwith take
possession of the properties, registered office and books of account
as the petition has already been admitted on 12th April 1999.
Thereupon, the petition was to be advertised. Clause 7 stipulated that
until complete payment was effected, the Company undertakes not to
dispose of its assets. There was admittedly a breach on the part of the
Company in complying with the obligation to pay under the Consent
Terms and an amount of Rs.33,93,501/- was still due and payable.
Subsequently, on 24th August 2005, a Memorandum of Understanding
was arrived at between the parties under which in clause (1), it was
recorded that an amount of Rs.33,93,501/- was still due and payable.
However, the Company issued a post dated cheque in the amount of
Rs.15 lakhs and the entire outstanding was settled at the aforesaid
amount. However, clause (5) of the Memorandum of Understanding
provided that if there was any breach on the part of the Company in
fulfilling the conditions of the Memorandum of Understanding, the
original Petitioner would be entitled to call upon the Company to
repay the entire outstanding of Rs.77,50,800/- together with interest in
terms of the Consent Terms filed in Company Petition 298 of 1997.
xxx xxx xxx
4. Company Application 723 of 2009 has been taken out for the
appointment of a Provisional Liquidator. There is admittedly a
breach, both in compliance with the obligation in the Consent Terms
and the subsequent Memorandum of Understanding dated 24th April
2005. In view of the breach of the Memorandum of Understanding ,
the original Petitioner is entitled to the benefit of the agreed terms as
recorded in the Consent Terms that were accepted by this Court.
Clause 4 provides for the appointment of the Liquidator in the event of
any two consecutive defaults. Admittedly, there has been a default far
in excess of two. In the circumstances, Company Application 723 of
2009 is made absolute in terms of prayer clause (a)."
[Emphasis supplied]
8. The facts in the present case are entirely different. A Company
Petition was filed seeking winding up of the Respondent Company on
account of the fact that the Respondent was unable to pay its debt in 2016. It
is a sine qua non in a winding-up Petition that there must be an admission of
the inability to pay its debts. The winding up Petition that was filed before
this Court was pursuant to a statutory Notice dated 19.08.2015 calling upon
the Respondent to make payment of what was outstanding on that day,
which was Rs.35 lacs along with interest thereon. Concededly, thereafter the
Settlement Agreement was entered into, the details of which have been set
out above. In pursuance of the Settlement Agreement, the Petitioner has also
admittedly received Rs. 34,15,000/- (Rupees thirty four lakh fifteen
thousand).
8.1. Clause 7 of the Settlement Agreement in the present case states that in
the event of the non-realisation of cheques, the Petitioner shall have the right
to initiate legal action against the Respondent before the appropriate
forum/Court. Clause 8 states that the Petitioner will withdraw the Company
Petition on realisation of the cheques. Clause 9 of the Settlement Agreement
states that the parties will withdraw all its litigations against each other.
9. The Supreme Court in the case of Mediquip Systems (P) Ltd. v.
Proxima Medical System Gmbh2, has held that the debt must be determined
or a definite sum of money payable immediately or at a future date and that
the inability referred to in the expression "unable to pay its debts" in Section
433(e) of the Companies Act, 1956 should be taken in the commercial sense
(2005) 7 SCC 42
and the machinery for winding up will not be allowed to be utilised merely
as a means for realising debts due from a company. The relevant extract of
the Mediquip Systems (P) Ltd. case is reproduced below:
"18. This Court in a catena of decisions has held that an order under
Section 433(e) of the Companies Act is discretionary. There must be a debt
due and the company must be unable to pay the same. A debt under this
section must be a determined or a definite sum of money payable
immediately or at a future date and that the inability referred to in the
expression "unable to pay its debts" in Section 433(e) of the Companies
Act should be taken in the commercial sense and that the machinery for
winding up will not be allowed to be utilised merely as a means for
realising debts due from a company."
[Emphasis Supplied]
9.1. The statutory notice pursuant to which this Petition was filed also sets
out that what was outstanding and due to the Petitioner was Rs. 35 lakhs
along with interest in in view of the fact that part payment has been made by
the Respondent thereafter the inability to pay its debt may or may not
remain. However, the Settlement Agreement sets out a fresh cause of action
in that behalf.
10. There is no agreement between the parties in the manner as is set out
in the Wall Street Finance case. The Petition was therein also disposed of
and in terms of the same that is what ought to have happened in the present
case as well, however this matter has been kept pending. The judgment in
the case of Wall Street Finance case is thus of no assistance to the
Petitioner.
11. There is another aspect as well. A perusal of the Settlement
Agreement shows that although the Settlement Agreement is signed by the
Respondent, it is not signed by the Petitioner. Thus, the Petitioner has sought
to rely upon an unsigned agreement.
12. In any event and in view of the fact that the Petitioner has admittedly
taken alternate remedies for recovery of the balance amount due under the
Settlement Agreement, this Court deems it apposite to dispose of the matter
in terms of Clause 7 and 8 of the Settlement Agreement.
13. It is clarified that the order passed today will not prejudice the rights
of the Petitioner from taking all appropriate steps to recover the amounts due
from the Respondent in accordance with law.
14. The Petition is accordingly disposed of.
15. The parties shall act based on a digitally signed copy of the order.
TARA VITASTA GANJU, J
MARCH 26, 2025/pa
