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2014 Supreme(Del) 1989
High Court of Delhi
VIBHU BAKHRU, J.
Small Industries Development Bank of India
Versus
Nirmaan Bharati Samajik & Arthik Vikas Sangathan
Co. Pet. No. 107 of 2011 & CA. No. 363 of 2011
Decided on : 25-08-2014
For the Petitioner:Dinesh Agnani, Sr. Advocate with Leena Tuteja & Dolly Sharma, Advocates.
For the Respondents:Aakarsh Kamra, Advocate.
The court established that the dispute over the obligation to provide further assistance for rehabilitation did not preclude the petitioner bank from maintaining the winding up petition.
Headnote:
Companies Act - Winding Up Petition - Sections 433(e) and 434 - Summary of Acts and Sections: Companies Act, 1956 - Sections 433(e), 434; Small Industries Development Bank of India Act, 1989 - Section 38 - The court discussed the petitioner bank's grounds for winding up the respondent company, the respondent company's inability to repay the loans, and the dispute over the obligation of the petitioner bank to provide further assistance for rehabilitation.
Fact of the Case:
The petitioner bank filed a winding up petition against the respondent company for failing to repay a substantial loan amount. The respondent company claimed financial difficulties and sought further assistance for rehabilitation.
Finding of the Court:
The court found that the respondent company owed substantial debt to the petitioner bank and was unable to pay, but the dispute over the obligation of the petitioner bank to provide further assistance did not preclude the winding up petition.
Issues: The main issue was whether the petitioner bank could maintain the winding up petition despite the dispute over the obligation to provide further assistance for rehabilitation.
Ratio Decidendi: The court held that the petitioner bank's entitlement to maintain the winding up petition was not precluded by the dispute over further assistance for rehabilitation, and the respondent company's inability to pay its debts was undisputed.
Final Decision: The petition was admitted, and the petitioner bank was directed to advertise the petition for a hearing. The court did not appoint a provisional liquidator but imposed restrictions on the respondent company's financial activities.
Vibhu Bakhru, J.
1. The present petition has been filed by the petitioner bank under Sections 433(e) and 434 of the Companies Act, 1956 (hereinafter referred to as the ‘Act’) inter alia praying for winding up of the respondent company on the ground that the respondent company had failed and neglected to pay a sum of Rs.6,28,31,972/- along-with interest, which was claimed as due and payable by the respondent company on account of the loan agreements dated 06.03.2007 and 20.02.2008 for Rs.50 lacs and Rs.600 lacs respectively.
2. Briefly stated, the relevant facts are that the respondent company applied to the petitioner bank for financial assistance in form of a term loan of Rs.50 lacs and capacity building grant of Rs.17 lacs (hereinafter referred to as ‘Loan I’) under Micro Credit Scheme of the petitioner bank. The said application was considered by the petitioner bank and by a letter of intent dated 02.03.2007, it granted the same to the respondent company. Thereafter on 06.03.2007, a loan agreement was executed for the same. The respondent company again applied to the petitioner bank for financial assistance in form of a term loan of Rs.600 lacs and capacity building grant of Rs.15.75 lacs (hereinafter referred to as ‘Loan II’) under Micro Credit Scheme of the petitioner bank. The said application was considered by the petitioner bank and by a letter of intent dated 13.02.2008, it granted the same to the respondent company. Thereafter on 20.02.2008, a loan agreement was executed for the same. Loan II was secured by an exclusive charge by way of hypothecation of book debts and underlying assets.
3. The interest with respect to Loan I was due 01.04.2007 and the first installment for the same was due on 01.12.2007. The interest with respect to Loan II was due 01.03.2008 and the first installment for the same was due on 01.09.2008.
4. The petitioner bank claims that the respondent company made regular payments of interest due on both the loans up to 10.08.2009 and defaulted in payment of installments with respect to both the loans from 10.03.2009 onwards and interest with respect to both the loans from 10.09.2009 onwards.
5. The petitioner bank states that in order to enable the respondent company to repay the loans, the petitioner bank restructured the account of the respondent company by way of reschedulement of repayment and communicated the revised payment schedule to the respondent company by letters dated 26.02.2009 and 07.12.2009, however, the respondent company did not accept the same as the pacakage was conditional on infusion of additional funds by the promoters for proposed loans, furnishing personal guarantee by the promoters and submission of post dated cheques etc.
6. The petitioner bank, by legal notice dated 18.5.2010 sent at respondent company’s Lucknow address, recalled the entire principal amount of the two loans along with interest, liquidated damages and other charges, amounting to Rs.5,97,95,040/-. The petitioner bank contends that the respondent company by its reply dated 07.06.2010 and additional response dated 24.06.2010, admitted that the respondent company was not in a position to pay the loans taken from the petitioner bank and requested for re-phasing of the loans, comprehensive rehabilitation and sanction of further funds for making the respondent company successful and viable.
7. On 19.10.2010, the petitioner bank sent another legal notice at the registered office of the respondent company, being the statutory notice under the Act, calling upon the respondent company to pay Rs.6,28,31,972/- with interest at the rate of 10.5% per annum on loan I and at the rate of 11.75% per annum on loan II, within three weeks.
8. The petitioner bank states that despite the aforementioned recall notices, the respondent company failed to repay the outstanding loan amounts and the petitioner bank, having no other alternative, filed the present Petition.
9. The respondent company claims that it had been
