NILESH LALIT PAREKH Vs. PRATIBHA INDERJIT KAPUR

JUDGEMENT

(1.) THIS appeal is preferred by a creditor of M/s. Enarai Finance Limited of which the respondent is the Managing Director. In the appellants petition for winding up, consent terms dated 23-5-1998 were recorded and an order was made in terms thereof. Upon the company admitting its liability and agreeing to pay certain instalments, the respondent, who was the Managing Director of the company, agreed to an order guaranteeing the payment of the amounts due. He further agreed for the performance of the consent terms. Upon failure of the company to make payment in accordance with the order of the Company Court recording the consent terms, the appellant applied to this Court on 15-4-1999 for issue of an insolvency notice to the respondent. Upon the Insolvency Register raising an objection to the issue of insolvency notice, the appellant applied on 11-6-1999 to the learned Single Judge of this Court, who rejected the application and upheld the objections of the Insolvency Registrar by an order dated 11-6-1999. This appeal is preferred against that order. Since the original application is for permission to issue a notice of insolvency against the respondent, normally, the proceedings would have been ex parte. However, in this case, the respondent has chosen to appear before the learned Single Judge of this Court to oppose the application for issue of insolvency notice and has been heard there. Likewise, the respondent has also appeared before us. These proceedings are, therefore, not ex parte.

(2.) THE appellant contends that under the consent order of this Court, there is an unequivocal admission of the company of its liability in the sum of Rs. 50. 00 lakhs and that inter alia this Court has ordered the company to pay an amount of Rs. 28,72,315/-, the balance having been paid. Further, the respondent has, in the event of any default by the company, guaranteed payment of all amounts due by the company and also the performance of the consent order. The appellants contention is, therefore, that she is entitled to have an insolvency notice under section 9 of the Presidency Towns Insolvency Act, 1909 (hereinafter referred to as the "act") issued to the respondent. Section 9 of the Act reads as follows :---

(3.) IN the contention of the respondent that the consent order does not contain any direction or order to the respondent to pay any sum of money to the appellant. Such an order, if any, is only against the company. Even if it is against him, it is in his capacity as the Managing Director and not in his personal capacity. The respondent further contends that there is no jurisdiction vested in the High Court while entertaining a company petition for winding up, and, in any case, prior to the commencement of the winding up process, to pass any order directing the company to make payment to a petitioning creditor. Section 634 of the Companies Act does not confer the status of a decree on an order passed by the Company Court and, therefore, such an order cannot be executed in accordance with section 145 of the Code of Civil Procedure.