PRATIBHA INERJIT KAPUR Vs. NILESH LALIT PAREKH

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 appellant's petition for winding up, consent terms dated May 23, 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 April 15, 1999, for issue of an insolvency notice to the respondent. Upon the Insolvency Registrar raising an objection to the issue of insolvency notice, the appellant applied on June 11, 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 June 11, 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 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 appellant's 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. Sec. 9 of the Act reads as follows :

(3.) According to the appellant, the consent order of this court amounts to a decree and is executable against the respondent by virtue of section 634 of the Companies Act, 1956, read with section 145 of the Code of Civil Procedure, 1908. Sec. 634 of the Companies Act reads as follows :