GLOBAL TRUST BANK LIMITED Vs. IN RE

JUDGEMENT

(1.) THE present company petition has been field by the petitioner Global Trust Bank Ltd. , a Banking Corporation incorporated under the Companies Act, 1956 (for short "companies Act") against Killick Nixon ltd. , (for short "company") a public limited company, having its registered office at Killick House, Killick Estate, Baji Pasalkar Marg, Chandivali, Mumbai-400 072 (Maharashtra) and thereby invoked the provisions under sections 433, 434 and 439 of the Act with a prayer to wind up the company and appointment of the provisional Liquidator, and or the Official Liquidator, High court, Bombay. The petitioner bank has basically contended that the company has inability to pay the debt of Rs. 13,99,00,377/- and interest thereon, at the rate of 16. 5% P. A. , inspite of due and statutory notice under the Act, dated 23rd July, 2002. Therefore, the present winding up company has been filed on 18-10-2002. As the company neglected and has inability to pay the debt, and therefore, as the Company is insolvent it is just and equitable to pass winding up orders as prayed. In or about 12th September, 1998, Company has availed the bill discount facility and cash credit facility and executed various documents in favour of the petitioner bank and an English mortgage in favour of the petitioner bank of Company's land and building and in respect of movable property under the mortgage deed was executed, dated 19th March, 1999 towards the security. The Company have also executed demand promissory note, deed of hypothecation of immovable property as well as agreement and other security documents, dated 19th March, 1999. In addition to this, the company have also hypothecated its stock book debts. The aforesaid transaction has been guaranteed by Snocem India Ltd. and one mr. Tejkumar Ruia. The Bank had discounted the bills from time to time drawn on the company by Snowcem India Ltd.

(2.) BECAUSE of irregularity in making repayment and as Company were in financial difficulties (one time settlement) OTS proposal was approved in favour of the Killick Group of the Company and as per the total liability under all credit facilities were frozen at 21. 40 crores on 15th December, 2000. As per the OTS proposal, the land which was secured by way of English mortgage was sold and conveyed by the Company to the Bank by deed of conveyance dated 1st June, 2001 for consideration of Rs. 11. 50 crores and the entire proceeds were adjusted and utilised towards the loan outstanding of the Company.

(3.) THE company, thereafter, had also committed defaults in fulfilment of the terms and conditions in terms of OTS and therefore, the petitioner Company by its letter dated 21st June, 2002 terminated the said OTS. On 30th july, 2002, therefore, Rs. 13,57,62,042 amount was due and payable, which includes demand loan and bills discounting, along with interest thereon from 1st Julv. 2002 on contracted rate 16. 5% compounded with monthly rests from 1st July, 2002 and payment till realisation. Therefore, statutory notice dated 23rd July, 2002 was sent for the said amount under sections 433 and 434 of the Act and the respondent company had received the same on 27th July, 2002. The statutory notice and acknowledgment are part of the record. Therefore, the present petition has been filed on 18-10-2002 by the bank. It may be noted here that admittedly, company had not replied the said statutory notice.