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2018 Supreme(Bom) 301
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NARESH H. PATIL, G.S. KULKARNI, JJ.
Vandana Global Limited - Appellant
Versus
IL & FS Financial Services Limited - Respondent
Appeal (Lodg) No. 27 of 2018 in Company Petition No. 923 of 2015 with Notice of Motion (Lodg) No. 37 of 2018
Decided On : 12-03-2018
Advocate Appeared:
For the Appellant : Fredeen Devitre, Sachin Mandlik, Pranav Sampat, Zacarias Joseph, Anushka Merchant i/b. Khaitan & Co.
For the Respondent: Dinyar Madon, Dr. Birendra Saraf, Vivek Dwivedi, Sachin Chandarana i/b. Manilal Kher Ambalal & Co.
Headnote:
Companies Act, 1956 - Sections 433(e), 434 read with 439 - Winding up - Mutually confirmed prior to disbursement - Amalgamations and acquisitions - Appellants associate company namely Limited had approached respondent a non-banking financial institution for financial assistance of crores - An offer letter October was issued by respondent enclosing terms and conditions for said term loan facility being Rupee Term Loan facility - Usage of term loan was to part fund for infusion of equity into power project namely Ltd. (VVL) floated by promoters/promoters group and associate companies of the borrower Ltdfor setting up a megawatt power project at Village District - Held, Once having agreed to above conditions of termination it was not open to appellant to contend that appellants liability had ceased to exist in view of a purported termination ofs option agreement and that civil proceedings were required to be filed by respondent to seek specific performance of said agreement - In court opinion by agreeing to Article IV (termination clause) and accepting that agreement will be terminated only on happening of said two events it can certainly be said that appellant had waived right if any to terminate contract - Submission as urged on behalf of appellant that by their letter March option agreement was terminated if is accepted then consequence is that Article IV(Termination Clause) of option agreement itself would be rendered nugatory and meaningless - Whole intention of parties to incorporate termination clause as contained in Article IV is to bind parties only in stipulated and agreed mode of termination and in no other form or method – Appeal disposal of
G.S. Kulkarni, J.
1. This appeal arises against the order dated 5 January 2018 passed by the learned Single Judge in Company Petition No.923 of 2015 whereby the learned Judge has admitted the respondent's Company Petition filed under Sections 433(e), 434 read with 439 of the Companies Act, 1956 and has further directed that the winding up petition be advertised in two local newspapers.
FACTS:
2. The appellant's associate company namely Vandana Udhyog Limited had approached the respondent a non-banking financial institution for financial assistance of Rs.100/- crores. An offer letter dated 16 October 2011 was issued by the respondent enclosing the terms and conditions for the said term loan facility being Rupee Term Loan facility. The usage of the term loan was to part fund for infusion of equity into the power project namely “Vandana Vidhyut Ltd. (VVL)” floated by the promoters/promoters group and associate companies of the borrower Vandana Udhyog Ltd., for setting up a 540 mega watt power project at Village Salora, Katghora, District Korba and Chhattisgarh. Some of the relevant terms and conditions on which the parties have addressed the Court reads thus:
“Principle Terms & Conditions for Rupee Term Loan facility of upto Rs.1000 mn to Vandana Group.
1
Borrower
Vandana Udhyog Ltd.
7
Tenor
36 Months from date of first disbursement
8
Put/Call Option
The Lender & Borrower will have Put/Call option at the end of 12/24 months with a prior written notice of 45 days.
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13
Repayment
In 4 equal quarterly installment at the end of 27th, 30th, 33rd and 36th month from the date of first disbursement
14
Security
The facility shall be secured by:
(a) Pledge of fully paid up, dematerialised, unencumbered, freely transferable equity shares of Vandana Vidhyut Ltd (VVL), which shall provide a cover of 2.50x, subject to the minimum pledge of 26% of the entire paid up equity of VVL throughout the currency of the Facility;
(b) Corporate Guarantee of Viconic Vyapar Pvt. Ltd.
(c) Personal Guarantee of Mr. Vinod Agrawal, Subhash Agrawal, Mr. Ashok Agrawal, Mr. Gopal Prasad Agrawal, Mr. Prahlad Agrawal and Mr. Vijit Kumar Agrawal
(d) PDCs for Principal & Interest
(e) Demand Promissory Note (DPN)
Note: Equity valuation with respect to the pledge of VVL shares to be undertaken on DCF/other methodology acceptable to IFIN. Present indicative valuation is in the range of Rs.,8000-8,500 mn which will be mutually confirmed prior to disbursement.
The valuation shall be reviewed on annual basis based on the financials of VVL & progress in the implementation of the Project and top up be provided for any shortfall so as to maintain minimum stipulated cover of 2.50x subject to minimum pledge of 26%. First such review shall be carried out in October 2012.
15
Put Option
On the Put/Call dates, maturity and trigger of any event of default (EoD) IFIN shall have the unconditional right to sell the RTL, through transfer/assignment to Vandana Global Ltd. (VGL) and Vandana Ispat Limited (VIL) and realize all the outstanding dues under the Loan Agreement. The unconditional commitment of VGL and VIL to buy the RTL on the exercise of above right by IFIN will be backed by their respective Board Resolution, in compliance with Sec.295 of the Companies Act.
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20
Security Review
The security package shall be reviewed on an annual basis based on project progress of each SPV
Other Rights
(a) Drag along Rights In the event of default and consequent enforcement of security, IFIN shall have the right to sell the shares in VVL pledged to it to any third party and drag the promoters to offer such number of sh
