A winding up petition can be admitted if the debt is undisputed, and the defense lacks substance. The Court can restrain the company from dealing with its assets.

JUDGMENT

(Prayer: Petition filed under Section 433 (e) and (f), 434 (1)(a) and 439(1)(b) of the Companies Act for winding up the respondent company.)

1. The Company petition filed as early as in the year 2011 which has travelled back and forth between the NCLT and this Court was taken up for hearing by me on various dates starting from 31.01.2020 and orders were reserved on 27.02.2020. The brief facts necessary for considering the petition is herein below narrated.

Pleadings:

2. The Respondent company which is engaged in generating power from wind, had issued an offer circular on 13.12.2007 announcing the issue of USD 30,000,000 2.5% Convertible Bonds due 2012 otherwise called the Foreign currency Convertible Bonds. The bonds were to mature on 22.12.2012 and were to bear interest @2.5% per annum payable semi-annually in arrears on the 6th and 12th month of each calender year after the issue date. ie.21.12.2007. The offer letter further stated that unless previously converted, redeemed or repurchased and cancelled the issuer. ie. the respondent, will redeem each bond in US Dollars at US$128.50158% of the principal amount on the date of maturity. The Bond holders were given an option to convert their bonds into fully paid-up equity shares of the respondent.

3. In pursuance of the above offer letter, the respondent had issued the aforesaid bonds to the Bond holders and the petitioner, as the Trustee of the Bond holders and the respondent, as the Issuer, had entered into a Trust Deed on 21.02.2007. The terms and conditions of the Bond formed a part of the Trust Deed and was set out as Schedule-2 to the Trust Deed.

4. It is the case of the petitioner that from the 2nd semi-annual interest due on 21.12.2009, the respondent had not paid the interest that had become due and payable on the scheduled dates. Since the default continued for over 5 days in each of the instances, it became an event of default as per condition No.10 of the Bond. As on 06.04.2011, the respondent therefore, was due in the amount of $38,098,737.85. The petitioner as Trustee therefore, issued a notice of default dated 06.04.2011 calling upon the respondent to remit the early redemption amount together with the accrued and unpaid interest as contemplated under condition No.10 of the Bond.

5. The Respondent has sent a reply dated 19.04.2011 stating that they had attempted to restructure the Bonds in the year 2009. They therefore, contended that since the Bond holders were put an notice about the restructuring, an event of default had not occurred. It is the contention of the petitioner that till the date of filing this winding up petition, the formal restructuring had not taken place. Therefore, the respondent is bound by the terms of the Bond and the objectives under the Trust Deed. The petitioner would therefore, submit that there was no bona-fide dispute to the respondent’s liability to the Bond holders.

6. Since there was no positive response from the respondent, the petitioner had issued a Statutory notice under Section 434(1) (a) of the Companies Act, (hereinafter called as ‘the Act”) calling upon the respondent to pay the sums due by them within a period of 21 days failing which the respondent was put on notice that a Winding up petition would follow.

7. The respondent, who had sent a reply on 01.06.2011, had not disputed the liability or its failure to make the payment post December, 2009. To this, the petitioner had sent a re-joinder dated 30.09.2011 putting the respondent on notice that the winding up petition, as alerted in the notice dated 18.05.2011, would be filed as it has to be deemed that the respondent is unable to pay its debts.

8. The petitioner would further submit that the proposal for restructuring was turned down by the majority of the Bond holders and the said decision was also communicated to the petitioner under cover of E-mail dated 17.08.2011. As on 31.08.2011, the respondent was due and owing a sum of $40,319,149.50.

9. The petitioner would furt