Karnataka High Court
Healingcross Pharma Private Limited vs Avesta Biotherapeutics And on 13 December, 2024
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF DECEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE ASHOK S.KINAGI
COMPANY PETITION NO. 34 OF 2012
A/W
COMPANY APPLICATION No.376/2022,
COMPANY APPLICATION No.427/2012,
COMPANY APPLICATION No.429/2024,
COMPANY APPLICATION No.430/2024 &
COMPANY APPLICATION No.432/2024,
IN COP No. 34/2012
BETWEEN:
Digitally signed
HEALINGCROSS PHARMA PRIVATE LIMITED
by B VEENA A COMPANY INCORPORATED UNDER
KUMARI THE INDIAN COMPANIES ACT, 1956 AND
Location: HIGH HAVING ITS REGISTERED OFFICE AT 10,
COURT OF SHIRIN MANZIL, 18/24. ST.MARY ROAD,
KARNATAKA
MAZAGAON, MUMBAI - 400 010
REP. BY AUTHORISED
SIGNATORY MR. ATHIPOTTA PARMESWARAN RAMAN
...PETITIONER
(BY SRI. VIVEK HOLLA, HOLLA AND HOLLA
R.U. BURLI, NAMAN JHABAKH & VINEETH REDDY, ADVOCATE)
AND:
AVESTA BIOTHERAPEUTICS AND
RESEARCH PRIVATE LIMITED
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956
HAVING ITS REGTD. OFFICE AT DISCOVERER,
9TH FLOOR, INTERNATIONAL TECH PARK,
WHITEFIELD ROAD,
BANGALORE - 560066
...RESPONDENT
(BY SRI. HARSHA SWAROOP P SHAILA N, ADVOCATE
K.S. MAHADEVAN, FOR OL)
THIS COMPANY PETITION IS FILED UNDER SECTION 433
(E) AND (F) AND 434 OF THE COMPANIES ACT 1956 PRAYING
TO THAT THE COMPANY, VIZ, AVESTA BIOTHERAPEUTICS AND
RESEARCH PRIVATE LIMITED BE ORDERED TO BE WOUND UP
BY AND UNDER THE DIRECTIONS OF THIS HON'BLE COURT
UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND
ETC.
IN CA No.376/2022
BETWEEN
THE OFFICIAL LIQUIDATOR OF
ATTACHED TO HIGH COURT OF KARNATAKA
AS THE LIQUIDIATOR OF
M/S AVESTA BIOTHERAPEUTICS AND RESEARCH PRIVATE
LIMITED (IN PROV. LIQN)
CORPORATE BHAVAN, 12TH FLOOR
RAHEJA TOWERS, M.G. ROAD
BANGALORE 560 001
...APPLICANT
(BY SRI. VIVEK HOLLA, HOLLA AND HOLLA
R.U. BURLI, NAMAN JHABAKH & VINEETH REDDY, ADVOCATE)
AND
1 . SRI. WENTIK JAN KOENRAAD
S/O J G H WENTINK
WINDSOR VILLA,
APT NO. 5,89,
DEFENCE COLONY
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
2ND MAIN, 2ND CROSS
INDIRA NAGAR
BANGALORE - 560038
ALTERNATIVE ADDRESS:
SRI WENTINK JAN KOENRAAD
DISCOVERER, 9TH FLOOR
INTERNATIONAL TECHNOLOGY PARK
WHITEFIELD ROAD
BANGALORE 560066
SRI. WENTINK JAN KOENRAAD
NO.446, RANKA COURT
18 CAMBRIDGE ROAD, ULSOOR
BANGALORE 560008
2 . SMT. PATELL MORAWALLA VILLO
D/O DARA DINSHAW MORWALA
8 A REGENCY HEIGHTS
NO 3 CLEELAND ROAD, FRAZER TOWN
BANGALORE 560 005
....RESPONDENTS
(BY SRI. HARSHA SWAROOP P SHAILA N, ADVOCATE)
THIS COMPANY APPLICATION IS FILED UNDER RULE 6 &
9 OF COMPANIES (COURT) RULES 1956, PRAYING TO DIRECT
THE DIRECTORS S.NO.1 & 2 TO REIMBURSE THE
PROFESSIONAL FEE PAID TO M/S RAMRAJ & CO CHARTEREED
ACCOUNTANT FOR THE PURPOSE OF INVESTIGATION INTO
THE AFFAIRS OF THE COMPANY VIDE THEIR INVOICE
LETTER/BILL OF FOR AN AMOUNT OF Rs. 8,55,000/- AND DUE
INCIDENTAL EXPENSES OF Rs.1,50,000/- APPROXIMATELY
RELATED TO PROVISIONAL WINDING UP OF THE COMPANY
SINCE JULY 2013 AND ETC.,
IN CA No.427/2012
BETWEEN
HEALINGCROSS PHARMA PRIVATE LIMITED
HAVING ITS REGISTERED OFFICE AT 10,
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
SHIRIN MANZIL, 18/24,
ST MARY ROAD, MAZAGAON,
MUMBAI 400 010
...APPLICANT
(BY SRI. VIVEK HOLLA, HOLLA AND HOLLA
R.U. BURLI, NAMAN JHABAKH & VINEETH REDDY, ADVOCATE)
AND
AVESTA BIOTHERAPEUTICS AND
RESEARCH PRIVATE LTD.,
HAVING ITS REGISTERED OFFICE AT DISCOVER
9TH FLOOR, INTERNATIONAL TECH PARK
WHITEFIELD ROAD,
BANGALORE 560066
....RESPONDENT
(BY SRI. HARSHA SWAROOP P SHAILA N, ADVOCATE)
IN CA No.429/2024, CA No.430/2024 &
CA No. 432/2024
BETWEEN
M/S AVESTA BIOTHERAPEUTICS AND
RESEARCH PRIVATE LIMITED
DISCOVER, 9TH FLOOR
INTERNATIONAL TECH PARK
WHITEFILED ROAD
BENGALURU 560066
REP. BY ITS DIRETOR
....COMMON APPLICANT
(BY SRI. HARSHA SWAROOP P SHAILA N, ADVOCATE)
AND
M/S HEALINGCROSS PHARMA PRIVATE LIMITED
NO 10, SHRINMANZIL
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
18/24, ST. MARY ROAD
MAZAGAON
MUMBAI 400010
REP. BY ITS MANAING DIRECTOR
....COMMON RESPONDENT
(BY SRI. VIVEK HOLLA, HOLLA AND HOLLA
R.U. BURLI, NAMAN JHABAKH & VINEETH REDDY, ADVOCATE)
CA No.429/2024 IS FILED UNDER RULE 6 AND 9 OF THE
COMPANIES (COURT) RULES, 1959 FOR RECALLING THE
ORDER DATED 28.03.2024 TO THE EXTENT IT RECORDS IN
POINT No.3 THAT "AN AFFIDAVIT OF THE MANAGING
DIRECTOR OF THE RESPONDENT COMPANY WOULD BE FILED
BY THE NEXT DATE OF HEARING, UNDERTAKING TO MAKE
PAYMENT OF THE AMOUNTS CLAIMED BY THE PETITIONER
WITHIN SIX MONTHS FROM TODAY, I.E., BY 30.09.2024". AND
TO DIRECT THAT THE SUBMISSIONS RECORDED IN POINTS
No.1 AND 2 OF THE ORDER SHEET, REGARDING THE
MONETIZATION OF BIOSIMILARS, BE GIVEN DUE
CONSIDERATION IN ASSESSING THE FINANCIAL CAPABILITIES
OF THE APPLICANT AND ETC.,
CA No.430/2024 IS FILED UNDER RULE 6 AND 9 OF THE
COMPANIES (COURT) RULES, 1959 PRAYING TO DISMISS THE
COMPANY PETITION No.34 OF 2012 AS NOT MAINTAINABLE
AND AWARD COSTS IN FAVOR OF THE RESPONDENT AND ETC.
CA No.432/2024 IS FILED UNDER RULE 6 AND 9 OF THE
COMPANIES (COURT) RULES, 1959 PRAYING TO PERMIT THE
WITHDRAWAL OF THE MEMO DATED 21.11.2024 FILED BY THE
APPLICANT/RESPONDENT AND ETC.
THESE COMPANY PETITION AND COMPANY
APPLICATIONS, COMING ON FOR ORDERS, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
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COP No. 34 of 2012 A/W
CA No.376/2022 AND OTHER 4
CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI
ORAL ORDER
This petition is filed under Sections 433 and 434 of Companies Act 1956.
2. Brief facts leading rise to filing of this petition are as follows:
The settlement of agreement was executed between Avesthagen limited (formerly known as Avestha Gengraine Technologies Pvt., Ltd.,), Avesta Biotherapeutics and Research Pvt., ltd., (ABRPL) and respondent herein under the laws of Singapore i.e., ABRPL Singapore, CIPLA Pvt., Ltd., i.e., CIPLA, Meditab Specialists Private Limited, i.e., MEDITAB, ABRPL agreed to make payment to MEDITAB a sum of Rs.30,77,00,800/- . MEDITAB had assigned the said amount in the form of Inter Corporate Deposit (ICD) to the petitioner herein and the petitioner have issued a notice on 25.11.2011 calling upon to make a payment of the aforesaid amount through ABRPL - respondent -7- NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 acknowledges the said amount, payment having not been made petitioner is before this court for winding up.
3. The respondent filed a statement of objections contending that in term of Clause 11 of the aforesaid settlement agreement dated 07.08.2010, agreement had automatically terminated within a period of one year on the count of Avesthagen and ABRPL not making the payment to CIPLA and MEDITAB and on such termination only recourse, which is available to the petitioner is the right to initiate arbitration proceedings or suit for recovery of the money. They cannot rely upon any assignment as contended in the petition.
4. It is also contended that the respondent went through a challenging period of time on the count of relapse of Lehman Brothers which resulted in global financial market melt down which came in the way of respondent and as such respondents were forced to sign the agreement dated 07.08.2010 by CIPLA and MEDITAB who demanded the payment.
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5. Clause 11 of the agreement is reproduced hereunder for reference:
"All payments to be made to Cipla and/or Meditab under this Agreement shall be made in full within one year from the execution of this Agreement. It is agreed that time is of the essence in entering into this Agreement and the payment being made within such specified time is a material inducement and reason for Cipla and Meditab to enter into such Agreement. In the event, that the said payments are not made, in full, within such specified time, the present Agreement shall stand automatically terminated and its provisions null and void. Cipla and Meditab shall then be entitled to pursue all their claims in full both by Arbitration as set out herein below and by pursuing such other remedies as are available to them in law. Not withstanding the termination of this Agreement, AVESTHAGEN and ABRPL shall continue to remain liable to make payment of all amounts mentioned in this Agreement."
6. A perusal of the Clause 11 would indicate that time fixed in the said agreement was the essence of agreement for CIPLA and MEDITAB to enter into and not for ABRPL or Avesthagen. In terms of the said agreement, if the amounts were to be paid within the specified time, then, the consequences thereof for other agreements entered into by CIPLA and Avesthagen to be cancelled. Avesthagen and ABRPL continued to be liable to make the -9- NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 payment of due amount. The CIPLA and MEDITAB agreed to enter into an agreement on the basis of specific material inducement that the payment could be made within time. The Automatic termination stated in Clause 11 is in the benefit of CIPLA and MEDITAB and not for the benefit of Avesthagen. Hence, prayed to dismiss the petition.
7. The petitioner filed a rejoinder to the statement of objections filed by the respondent and prayed to allow the petition.
8. Heard the learned counsel for the petitioner, learned counsel for the respondent.
9. Learned counsel for the petitioner submits that there was an agreement between Avesthagen Ltd., Avesta Biotherapeutics and Research Private Limited and the respondent herein, under the laws of Singapore. The respondent agreed to make payment to MEDITAB a sum of Rs.30,77,00,800/-. It is contended that the MEDITAB
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 assigned the said amount in the form of ICD to the petitioner. Petitioner issued the notice to the respondent for making a payment of the said amount. Despite service of notice respondent did not pay the amount. Hence, on these grounds he prays to allow the petition.
10. Per contra, learned counsel for the respondent submits that time was fixed in the said agreement and time was essence of the agreement for CIPLA and MEDITAB to enter into and not for ABRPL or Avesthagen. He stated that the automatic termination stated in Clause 11 is for the benefit of CIPLA and MEDITAB and not for the benefit of Avesthagen. There is an automatic termination of agreement, hence, the petitioner is not liable to pay the amount. Hence, on this ground prays to allow the petition.
11. Perused the records and considered the submission of the learned counsel for the parties.
12. Admittedly there is an agreement between the parties and MEDITAB had assigned the said amount in the
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 form of ICD to the petitioner. Petitioner issued a notice on 25.11.2011 calling upon to make a payment of the said amount through respondent. The respondent has not paid the amount. Admittedly, Clause 11 of the agreement provides for termination of the agreement.
13. From the perusal of the Clause 11 would indicate that time was fixed in the said agreement was essence of agreement for CIPLA and MEDITAB to enter into and not for respondent. In terms of the said agreement, if the amount were to be paid within specified time, consequences thereof, were of the other agreements entered into by CIPLA and Avesthagen to be cancelled. Admittedly, Avesthagen and ABRPL continued to be liable to make payment of the due amounts.
14. It is the case of the respondent that there was an automatic termination of agreement in terms of Clause 11 of the agreement. So far as the automatic termination of agreement, CIPLA and MEDITAB are started to be entitled to pursuant of all their claims in full and
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 notwithstanding the termination of the agreement and continued to remain liable to make payment of all the amounts mentioned in the agreement.
15. Further, this Court vide order dated 28.03.2024, which is reproduced here as under:
ORDER "1. Learned counsel for the petitioners, on instructions, submits that his clients are not agreeable to receive three biosimilars said to have been developed by the company in discharge of the debt due and liable to be paid by the respondents to the petitioner. He further submits that the petitioners have grave apprehension as to whether the respondents would be able to monetize the biosimilars within six months and make payment of the due amounts. In this regard, he submits that several such submissions have been made earlier, the respondents have not established any bonafide by making payment of any amount.
2. I am of the considered opinion that the matter having been pending from the year 2012, the request made by the respondents being for a period of six months, one last and final opportunity is required to be granted to the respondents to try and monetize biosimilars which are alleged to be valuable by the learned counsel for respondents.
3. Counsel for the respondents submits that an affidavit of the Managing Director of the respondent-company would be filed by the next date of hearing undertaking to make payment of the amounts claimed by the petitioner within six months from today i.e. by 30.09.2024 and also undertaking that in the event of the said amount
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 not being paid, the respondents will not object to the above petition being allowed.
4. Relist on 16.10.2024."
(Emphasis supplied)
16. From the perusal of the paragraph No.3 of the order dated 28.03.2024 the learned counsel for the respondent submitted that an Affidavit of the Managing Director of the respondent company would be filed by the next date of hearing, undertaking to make the payment of the amounts claimed by the petitioner within six months from 30.09.2024, and also undertaking that in the event of the said amount was not paid, the respondent will not object the petition being allowed.
17. Respondent company did not comply with the order 28.03.2024. That the Managing Director of the respondent company did not file an affidavit of undertaking to make the payment of the amounts claimed by the petitioner. The respondent company went on changing the Counsel one after the another. This Court has made it very clear on 28.03.2024, in case, if,
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 respondent Managing Director fails to file an affidavit of undertaking to make the payment, respondent will not object to the petition being allowed. The petitioner has made out a ground to allow the application and allow the petition. In view of the above discussion, I proceed to pass the following:
ORDER i. Accordingly, petition is allowed, the respondent company namely Avesta Biotherapeutics and Research Private Limited is ordered to be wound up.
ii. The winding up order to be advised by way of publication in the Newspaper "The Hindu" English Daily Newspaper and "Vijaya Vani"
Kannada Daily Newspaper in terms of Rule 113 of the Companies (Court) Rules (1999) within 15 days from the date of receipt of copy of this order by the petitioner and the
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NC: 2024:KHC:53266 COP No. 34 of 2012 A/W CA No.376/2022 AND OTHER 4 petitioner may take up the publication on sharing the cost.
iii. The Official Liquidator attached to this Court shall take the charge of the assets of the respondent company and proceed in accordance with law.
iv. In view of the disposal of the
petition, C.A.Nos.427/2012
376/2022, 429/2024, 430/2024,
432/2024, other OLRs and
applications, if any, do not survive for consideration and accordingly they have become infructuous.
Sd/-
(ASHOK S.KINAGI) JUDGE BVK