MAXLUX GLASS PRIVATE LIMITED Vs. ICICI LIMITED COMPANY

JUDGEMENT

(1.) The brief facts which are necessary for disposal of the instant appeal are that a winding up petition under sections 433, 434 and 439 of the Companies Act, 1956 was filed by ICICI Limited Company (hereinafter referred to as ICICI) for winding up of M/S Maxlux Glass Private Limited (hereinafter referred to as Company). The Company was incorporated under the provisions of the Companies Act, 1956 as a private Company limited by shares. The authorised share capital of the Company is Rs. 100,100,000.00 divided into 10,000,000 share of Rs. 10/- each. The issued and subscribed capital of the Company is Rs. 70,130,360.00 made up of equity shares of Rs. 10/- each fully paid up. The Company carries on business of manufacturing of different kind of glass article. The Company was indebted to the petitioner in the sum of Rs.4,75,03,044/- as on 15th August, 1999 on account of money lent and advanced by the petitioner and not repaid by the Company. The petitioner claimed interest on and from 16th August, 1999 at the agreed rate. The petitioner granted loan to the Company from time to time for the purpose of meeting the cost of the project of the Company for manufacture of glass shell at the Ulberia Industrial Growth Centre, District Howrah, West Bengal. On or about 12th May, 1990 the petitioner along with Industrial Development Bank of India (IDBI) and the Industrial finance Corporation of India Limited (IFCI) entered into a participation loan agreement for granting the Company a rupee loan of Rs.164 lakhs(first loan) being the petitioner's share out of the rupee loans aggregating to Rs. 408 lakhs sanctioned by the petitioner in participation with IDBI and IFCI. The terms and conditions were mentioned in the loan agreement dated 12th December, 1990 as amended from time to time. In pursuance of the terms of the participation agreement the petitioner disbursed the entire loan of Rs.164 lakhs to the Company. The Company appropriated the same to its benefit. Another loan of sum of Rs. 57 lakhs (second loan) was also granted in pursuance of the aforesaid agreement. The Company in pursuance of the said agreement from time to time created securities in favour of the petitioner by executing deeds of hypothecation thereby hypothecating the moveable properties of the Company. The Company also furnished a personal guarantee of one Anup Kumar Saha as security for due repayment of the aforesaid loan in consideration of the loans granted by the petitioner to the Company. The petitioner found the securities created by the Company has since become inadequate to satisfy the claim of the petitioner. In pursuance of this loan agreement the Company was required to repay the principal amount of the aforesaid two loans in accordance with the schedule set out in each of the said two loan agreements and also to pay interest and other charges. However, inspite of repeated requests and demands made by the petitioner and assurance and undertakings given by the Company, the Company failed and neglected to pay the principle, interest and other charges due in respect of the aforesaid two loan agreements. The petitioner by communication dated 21st November, 1996 recalled the entire principal amount of the aforesaid two loans together with interest and all other charges due in respect thereof and called upon the Company to pay the amount which had become due and payable by the Company. Inspite receipt of the aforesaid letter and several other demands the Company failed and neglected to pay the amounts. The petitioner had on their part granted the relief and concession as contained in the letter dated 16th December, 1997 to the Company. However, the Company failed to abide by the terms and conditions to repay as per the schedules to the said two loan agreements. On account of failure of the Company to repay, the concessions which were given to the Company were revoked by the communication dated 3rd August, 1999.

(2.) In this background the present winding up petition was filed by the petitioner and it was prayed that the Company namely Maxlus Glass Private Limited be wound up under the provisions of the Companies Act, 1956 and the official liquidator be directed to take possession of the assets and properties of the Company. In this winding up petition the Company moved an application (C.A. No. 100 of 2000) before the learned single Judge on 5th May, 2000 and prayed that the winding up petition filed by the petitioner be dismissed on the basis that secured creditors are not entitled to recover its debt other than before the Tribunal that is Debt Recovery Tribunal created under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act of 1993) and heavy reliance was placed by the applicant on the recent decision of the apex Court in the case of Allahabad Bank v. Canara Bank reported in (2000) 4 SCC 406 and the decision of this Court in the Case of Durgapur Steel Plant v. Kisan Jaiswal reported in 2000(1) CHN 21.

(3.) The learned single Judge after considering this application held that the winding up petition under the Companies Act is not an application under Recovery of Debts due to Banks and Financial Institution Act, 1993, and therefore the learned single Judge dismissed the application. However, the learned single Judge allowed time to file affidavit in opposition in the winding up petition and the petition for appointment of provisional liquidator. Liberty was also granted to file a reply thereto within two weeks thereafter. Aggrieved against this order passed by the learned single Judge dated 7 the August, 2000 the present appeal has been filed.