COMMERZBANK AQ Vs. ISIBARS LTD

JUDGEMENT

(1.) ADMITTED position is that the petitioner Company has advanced huge amounts to the respondents. Perusal of the agreement dated 22nd September 1999 shows that the respondents admitted and acknowledged that an amount of Rs.12,31,45,872/- is payable by the respondents to the petitioners. It appears that thereafter as the payment was not made, a company petition was filed in this Court which was company petition No.287 of 2000 seeking an order of winding up of the respondent Company. During the pendency of that petition, an agreement was arrived at between the parties dated 30th March 2000 whereby the respondents paid an amount of Rs.3,50,00,000/- to the petitioners and also promised to make further payments. Admitted position is that further payments were not made by the respondents. Therefore, the petitioners issued demand notice dated 13th March 2002 calling upon the respondents to pay an amount of Rs.13,83,35,677/- within a period of 21 days from the receipt of this notice. It was also stated that this notice should be treated as notice under sections 433 and 434 of the Companies Act. Admitted position is that this notice was received by the respondents and the respondents did not send any reply to this notice within a period of three weeks from the date of receipt of this notice. The learned counsel appearing for petitioners submits that it is clear from the documents on record that huge amounts are payable by the respondent Company to the petitioners. Therefore, in terms of provisions of section 434, demand notice was served on the respondents requiring the respondent Company to pay the amounts due to the petitioners. The respondents within three weeks from the date of receipt of this notice did not pay the amount, did not secure it and also did not compound it to the reasonable satisfaction of the petitioners. Therefore, a statutory presumption has arisen that the respondent Company is deemed to be unable to pay its debts. According to the learned Counsel, in this view of the matter, therefore, company petition deserves to be admitted.

(2.) ACCORDING to the respondents, because the petitioners are secured creditors, a winding up petition at the instance of the petitioners is not maintainable. It is further urged that the respondent Company is not in a position to make payments presently because the steel industry in general has suffered a set back. It is further urged that the efforts are on with other financial institutions for revival and restructuring of the respondent Company. It is urged that winding up of the respondent Company will result in causing prejudice to the interest of other creditors as also the workers who are engaged in the factories of the respondents. It is further urged that the petitioners who are secured creditors, have merely stated that the security held by it is inadequate, no valuation report has been submitted. So far as the objection to the maintainability of the petition is concerned, in view of the judgment of Division Bench of this Court in the case of Bharat Overseas Bank Ltd. vs. Shree Arcee Steels Pvt. Ltd., reported in 1985 Company Cases 174, the objection does not survive inasmuch as the Division Bench has in clear terms held that the question whether the secured creditor would be entitled to maintain the petition for winding up is not to be considered at the stage of admission of the petition and that a company petition for winding up at the instance of the secured creditor is maintainable at least at the stage of admission. So far as the other aspect of the matter is concerned, in my opinion, once the company fails to comply with the demand notice served by the Petitioner within the period allowed to it viz. three weeks, a statutory presumption has arisen that the respondent Company is only to pay its debts. In my opinion, whether the security held by the petitioners is enough or not cannot be considered at this stage. In my opinion, there was an occasion for the respondent Company to send a reply to the demand notice of the petitioners stating therein that the security that is held by the petitioner Company is enough and therefore, its interest is secured. Had such reply been sent and had the respondents established to the satisfaction of the Court after giving such reply, then the statutory presumption would not have arisen, but because the respondent Company has failed to send any reply to the demand notice, definitely a statutory presumption arises that the respondent Company is unable to pay its debts. Considering that huge amounts are due to the petitioners from the respondents, in my opinion, the admission of the company petition cannot be postponed only because there are some schemes for restructuring being considered by other financial institutions. The learned counsel appearing for respondents stated before me that a report which was called for by the ICICI Bank has now been submitted and as result of which restructuring would take place and payment can be made to the petitioners. In my opinion, in view of this statement, though the admission of the petition cannot be postponed, the publication of advertisement can be postponed. Therefore, if restructuring comes about and if the respondents pay to the petitioners, then the question of advertisement need not be considered. In my opinion, following order would meet the ends of justice.

(3.) PETITION be advertised in 'Free Press Journal', 'Navshakti' and 'Maharashtra Government Gazette'. Petitioners to deposit a sum of Rs.2,000/- with the Prothonotary and Senior Master of this Court within a period of four weeks from today towards publication charges. Prothonotary and Senior Master and parties to act on the copy of this order duly authenticated by the Company Registrar/ Personal Secretary as true copy. Certified copy expedited.