ENERNORTH INDUSTRIES INC Vs. VBC FERRO ALLOYS LTD

JUDGEMENT

(1.) THIS company petition is filed by the petitioner ? Enernorth Industries Inc. , Canada, under Sections 433 (e) and (f), read with Section 434 (1) (a) of the Companies Act, 1956 (hereinafter referred to as the 'the Act') seeking to pass an order of winding up against the Respondent Company - VBC Ferro Alloys Limited, Hyderabad, as the Respondent Company was unable to clear the amounts to the petitioner company, along with the amounts payable to other various creditors.

(2.) IT is stated that the petitioner is a Company incorporated under the laws of Canada, having its registered Office at 2, Adelaide Street West, Suite 301, Toronto, Ontario, M5h1l6, Canada. The petitioner company was originally known as 'energy Power Systems Limited', and its name has been changed to Enernorth Industries Inc. , as per the amendment dated 11. 02. 2003 issued by the Ministry of Consumer and Business Services, Ontario, Canada. The Respondent Company was incorporated under the Act on 03. 10. 1981, as a Limited Company and having its registered office at Progressive Towers, 3rd Floor, 6-2-913/9/4, Khairatabad, Hyderabad. The authorized share capital of the Respondent Company is Rs. 20,00,00,000/- divided into two crores equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the Respondent Company is Rs. 4,04,43,000/- divided into 40,44,300 equity shares of Rs. 10/- each. The respondent company was incorporated mainly with an object to take over the Registrations and Licenses obtained and to be obtained by M/s. Vizag Bottling Company Private Limited, for the establishment of Ferro Silican Factory and doing all such other things as are incidental or conducive to the attainment of the above object. The other objects of the company are more specifically stated in Para-4 of the Company petition. It is stated that in and around 1995, one Oakwell Engineering Limited, No. 8, Aluunid Ave. 3, Oakwell Building, Singapore 389933, participated in the tenders floated by Andhra Pradesh State Electricity Broad (now known as and hereinafter referred to as APTRANSCO) and being the successful bidder in those tenders, it secured two letters of intent to establish to barge Mounted Power Projects of 100 MW each at Kakinada, Andhra Pradesh. Thereafter, the said Oakwell Engineering Limited incorporated a company, known as EPS Oakwell Engineering Limited with 100% foreign equity, to establish, control and manage the said two power projects. The petitioner herein and the above named Oakwell Engineering Limited had entered into a number of agreements, including Cooperation Agreement, dated 17. 10. 1997, Shareholders Agreement dated 17. 10. 1997, and Settlement Agreement, date 29. 12. 1998, whereunder the total control and management of the above referred EPS Oakwell Power Limited (now known as Konaseema EPS Oakwell Power Limited ? KEOPL) was acquired by the petitioner herein.

(3.) SUBSEQUENT to the above, the respondent had entered into various agreements with the petitioner herein, whereby the respondent and its group companies have acquired and are continuing to hold controlling interests in KEOPL. In view of non-performance of obligations by the Respondent Company under Various agreements entered into with the petitioner, number of disputes including transfer of shares and payment of various amounts to the petitioner had arisen between the parities. The said disputes were referred to the Arbitral ,tribors. The disputes relating to the purchase/transfer of the shares were duly resolved between the parties as per the agreement dated 16. 09. 2003, and thereupon a request was made by the parties to the Arbitral Tribunal for passing a consent award, with record to the sale/purchase of the shares of KEOPL, and accordingly, the Arbitral Tribunal gave its Award on 11. 10. 2003. In terms of the said Award, the respondent was required to buy 1,13,48,200 shares of KEOPL from the petitioner on or before the earlier event of 60 days after the first disbursal on financial closure (as per PPA) and 31. 3. 2004, and pay the petitioner the purchase consideration of INR 113,482,000 by tele-transfer in equivalent US Dollar on or before 31st March 2004. The said award further directed that in the vent of the respondent's failure to pay the value of the said shares to the said shares to the petitioner, the respondent shall be liable to pay interest on the said amount at the rate of 12% per annum. According to the petitioner, after the said arbitral award, a letter dated 28. 02. 2004 had addressed to the respondent intimating the fast approaching of deadline and that the petitioner is ready and willing to lodge the shares referred to in the arbitral award, which are to be purchased by the respondent and Mrs. Rita Mukerji has been authorized by the petitioner to take all and or any such actions as may be needed for the purpose and the petitioner was asked to contact the said person of the purpose for the purpose of getting the shares transferred while affecting the payment for the shares as per the Award. However, it is stated that the respondent did not fulfill the terms of the arbitral award. Therefore, the petitioner issued a legal notice dated 17. 08. 2004 demanding the payment. But, the respondent though received the said notice neglected and failed to pay the amount due to the petitioner, within the period of three weeks from the date of the receipt of the said notice. Therefore, it is stated that the respondent is unable to pay the amount due to the petitioner. Hence, the Respondent Company is liable to be wound up in accordance with the provisions of the Act. It is also further stated that the petitioner came to know that the respondent has failed to pay the amounts that it legally owes to various creditors and created various charges of its properties and assets for the loans and other advances taken by the respondent, and as such the respondent is not in a position to discharge the debts. Hence, the present petition.