LAWS(APH)-2011-12-22

DEUTSCHE BANK AG Vs. PRITHVI INFORMATION SOLUTIONS LIMITED

Decided On December 26, 2011
DEUTSCHE BANK AG Appellant
V/S
PRITHVI INFORMATION SOLUTIONS LIMITED Respondents

JUDGEMENT

(1.) THIS company petition has been taken out by Deutsche Bank AG under Sections 433, 434 and 439 of the Companies Act, 1956 read with Rule 95 of the Companies (Court) Rules, 1959 seeking an order of winding up of Prithvi Information Solutions Limited (in short, 'the respondent-company).

(2.) THE petition averments, in brief, are:- 2(a) THE petitioner carries on business as a banking company and is an Authorised Dealer and a scheduled commercial bank in India. THE respondent-company is a public limited company incorporated and registered under the provisions of the Companies Act, 1956 (in short, the Act) having its registered office at 10 Q3-A1, 10th Floor, Cyber Tower, HITEC city, Madhapur, Hyderabad 500081. THE respondent company is a listed public company. It is engaged in the business to develop, import, export and deal in computer software & hardware, establishing and running data processing and computer centres and offering consultancy, data processing etcetera. 2(b) THE respondent-company approached the petitioner for sanction of multi-purpose trade/cash facilities and agreed to enter into/undertake foreign exchange and derivative transactions (FX and Derivative Transactions) in accordance with the applicable regulations and guidelines of Reserve Bank of India. THE petitioner granted credit facilities to the respondent company up to Rs.25,00,00,000/-. THE respondent-company executed required documents for the facilities sanctioned to it. THE respondent- company placed on record the Resolution dated 5.12.2007 passed by the Board of Directors authorising the company to avail the credit facilities. Pursuant to the sanction of credit facilities, the respondent company availed packing credit facility of Rs.50,000,000 on January 14, 2008, Rs.155,000,000/- on January 25th, 2008 and USD 1, 075,000 on 2nd April, 2008. THE representatives of the respondent-company approached the petitioner on various occasions representing that the respondent-company is not in a position to comply with its obligations under the packing credit facilities. THE representatives of the respondent-company further represented to the petitioner that the company has good business relationships inter alia with T-Mobile USA, Johns Hopkins Hospital, Ovs-Starpoint Solutions LLC, Amdocs, Inc, University of Pittsburgh Medical Centre, PPG Industries, Inc., PNC Bank National Association, Meijer Inc., Mckesson Corporation, Franklin Templeton Companies LLC, Dicks Sporting Goods Inc., Comsys IT Partners Inc., and that it has executed and is executing works for T-Mobile USA, Johns Hopkins Hospital and Starpoint Solutions LLC and in respect of such works, the respondent-company is to receive certain amounts within a short period. On these representations, the respondent-company sought to avail bills purchase/bill discounting facility with the petitioner. 2(c) THE petitioner, in good faith, agreed to allow the respondent Company to avail of the export bills purchase/bill discounting facility up to Rs.30,000,00,000/-. THE respondent-company executed the required documents for availing bills purchase/bill discounting facility. THE Chairman of the respondent company stood as a guarantor for the bill discounting facility and accordingly, executed personal guarantee bond dated 04.12.2008. THE Managing Director of the respondent company also executed guarantee bond dated 12th October 2008. THE representative of the respondent company produced three notices of assignment addressed to the Foreign Purchasers assigning the receivables in supply contracts absolutely in favour of the petitioner and instructing the Foreign purchasers to make payment to the petitioner. THE petitioner allowed post-shipment credit facility against the invoices raised by the company on the above-referred foreign purchasers. As the petitioner did not receive any payments on the respective due dates from the foreign purchasers, it addressed letters to T-Mobile USA, Johns Hopkins Hospital, Starpoint Solutions LLC, calling upon them to make payments in respect of the invoices raised by the company. THE petitioner received letter dated 24-4-2009 from Starpoint Solutions LLC, wherein it is stated that the documentation produced by the company is fraudulent and that it never entered into the business relationship with the respondent company. M/s. Johns Hopkins under letter dated 7-5-2009 denied of entering into contract with the respondent-company. T-Mobile USA orally informed to Deutsche Bank AG, New York office that it has not executed any notice of assignment as projected by the representatives of the respondent-company. THE petitioner, vide its letter dated 29-4-2009 called upon the respondent-company as to why the account of the settlement dues of Rs.100,969,700.00 and export credit facility of USD 195,123.20 and INR 30,57,94,962.84 cannot be classified under wilful default category. 2(d) THE petitioner filed a complaint against the respondent-company and its representatives. THE petitioner also filed original application being O.A.No.403 of 2009 before the Debt Recovery Tribunal, Bangalore against the respondent-company and the guarantors for recovery of the amount due under various credit facilities and obtained an ex parte interim order dated 6-8-2009. THE respondent-company filed a civil suit being O.S.No.4013 of 2009 on the file of the City Civil Judge, Bangalore and obtained ex parte temporary injunction on 27th June 2009 restraining the petitioner from publishing any defamatory statement against it. However, the City Civil Judge, Bangalore refused to stay any recovery proceedings. THE petitioner entered appearance in the said suit and filed various interlocutory applications questioning the very jurisdiction of the Court to entertain the suit. 2(e) THE respondent-company and its representatives obtained the credit facilities by producing forged and fabricated documents in respect of various foreign exchange derivative transactions. THE respondent-company by its letters dated 14-5-2009 and 20-5-2009 admitted its liability on account of foreign exchange derivative transactions and assured to clear the amounts due to the petitioner. 2(f) THE petitioner sent a statutory notice dated 20-8-2009 detailing the amounts due under various credit facilities and calling upon the respondent-company to pay the following amounts:- (a) Rs.315,574, 537.62 together with interest at the rate of 16.5% per annum from the respective dates of discount until date of crystallization amounting to Rs.11,447,046.86 and thereafter, until August 11, 2009 at the rate of 16.5% per annum amounting to Rs.1,77,93,737.71 totalling to Rs.34,48,15,322.19 together with further interest at the rate of 16.5% per annum from August 11 2009 on 315, 574,537.62 till payment and/or realization towards the credit facilities; and (b) USD 2, 117,587.68 (i.e., USD 2,116,208.12+USD 1, 379.56) together with further interest at the Default Rate on USD 2,117,587.68 to be compounded daily, from August 11, 2009 till date of actual payment and/or realization, with regard to the FX and Derivative transactions within 21 days from the date of receipt of the notice by the company, failing which the respondent-company was cautioned that the petitioner shall be constrained to file proceedings for winding up of the company. 2(g) THE respondent-company failed to liquidate its liability despite receipt of statutory notice. THE respondent company is deemed to have become commercially insolvent and is unable to discharge its debts warranting an order of winding up. Hence this petition seeking the prayer stated supra. Para (32) of the petition needs to be noted and it is thus:- THE petitioner states and submits that more than 21 days have passed since the service of the aforesaid statutory notice dated August 20, 2009 on the Company and the Company has wrongfully, purposely, intentionally and with a malafide intention to defraud the petitioner and without any just or sufficient cause and despite having no defence whatsoever failed and neglected to pay to the petitioner its legitimate outstanding dues and have by its letter dated September 16, 2009 raised all false and frivolous contentions which are hereby denied. Copy of the letter dated September 16, 2009 is annexed and marked as Annexure No.44. THE liability of the company to repay its dues is absolute and unconditional, particularly in view of the express acknowledgment. In view of the aforesaid, the petitioner submits that it should be deemed that the Company is unable to pay its debts owned to the petitioner. THE petitioner submits that the Company is, therefore, liable to be and should be wound up, by and under the orders of the Companies Act, 1956. THE petitioner also submits that it is just and equitable to wind up the Company on account of the reasons stated hereinabove.

(3.) HEARD Sri S.Ravi, learned senior counsel appearing for the petitioner and Sri C.Kodandaram, learned Senior counsel appearing for the respondent-company.