Calcutta High Court
Jmd Medicare Limited vs Siemens Aktiengasellschaft on 15 May, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
P r e s e n t :-
The Hon'ble Mr. Justice PINAKI CHANDRA GHOSE
A n d
The Hon'ble Mr. Justice SANKAR PRASAD MITRA
A.C.O. No. 33 OF 2007
A.P.O.T. No. 19 OF 2007
A.C.O. No. 13 OF 2007
C.P. No. 470 OF 2004
JMD MEDICARE LIMITED
VERSUS
SIEMENS AKTIENGASELLSCHAFT
For the Appellant : Mr. P. C. Sen, Senior Advocate,
Mr. Utpal Bose, Advocate,
Mr. R. Sen, Advocate,
Mr. S. Gangully, Advocate.
For the Respondent : Mr. Satyabrata Mukherjee, Senior Advocate,
Mr. Pratap Chatterjee, Senior Advocate, Mr. Anirudha Roy, Advocate, Ms. Sudeshna Bagchi, Advocate.
Heard on : 18-3-08, 15-4-08, 23-4-08 and 24-4-08.
Judgment on : 15th May, 2008.
Pinaki Chandra Ghose, J.: This appeal is directed against an order dated 10th January, 2007 whereby the Hon'ble Company Judge was pleased to direct that the JMD Medicare Limited is to be wound up in accordance with the provisions of the Companies Act, 1956.
It is to be noted that such order was passed after the appearance before the Hon'ble Court and after the advertisement was published in terms of an earlier order dated July 7, 2005 admitting the winding up petition filed by the petitioning creditor. The Hon'ble Court at that point of time came to the conclusion that the Company was unable to pay its debts and the claim of the petitioning creditor was indisputable. The Hon'ble Court was also pleased to grant liberty to the Company to pay the said sum or the sum equivalent in Indian currency to the petitioning creditor in 48 equal monthly instalments commencing from 1st August, 2005. An appeal was preferred from the said order dated July 7, 2005 which was dismissed as not pressed by the Company.
The present proceeding started after the advertisement was published and after giving further chance to the Company to file their affidavit before the impugned order was passed.
Admittedly, the facts reveals that Siemens AG sold and delivered one Magnetom Harmony Magnetic Resonance Imaging System (MRI) to the Company JMD Medicare Ltd./the appellant herein on May 5, 1998 in pursuance to a written agreement made between the parties.
When in the agreement dated May 5, 1998, the Company agreed to hypothetic the said MRI System in favour of Siemens to secure the balance sum payable on deferred payment basis. The MRI System is a highly sophisticated equipment and the Company had initially faced problems in several occasions with the result that the first image was charmed out on January 15, 1999. According to the Company, there were initial problems and the equipment was ready for regular use only in June, 1999.
It further appears that the Company made default in payment of the purchase price and the initial schedule of payment was required to rework and the payment schedule balance had to be revised on several occasions on the ground of default made by the Company in payment of the purchased price.
It is also admitted that the Company on several occasions requested and made assurances that the payment should be made to the petitioning creditor. It further appears that the Company took various pleas to explain its inability to pay the price of the MRI equipment. Some cheques were issued by the Company which were dishonoured on presentation. The plea of the Company was that the Company was facing financial crunch.
It further appears from the facts and the correspondences exchanged between the parties that the company repeatedly assured Siemens that payment would be made in accordance with the Schedule revised from time to time.
We have also considered the letters dated 3rd December, 2001; 12th June, 2002; 7th August, 2002; 11th October, 2002 and 24th October, 2002; 5th September, 2003 and 9th September, 2003 and after summarizing the facts stated in the said letters it appears to us that the claim of the petitioning creditor was undisputed and the Company repeatedly asked for time to pay such dues. The said fact would be evident from the said letters.
Mr. Sen, Learned Senior Advocate in support of this appeal contended before us that the Court should not pass such order and the Company has raised a bona fide dispute in respect of the claim of the petitioning creditor and further counter-claim and hence the Company has filed a suit. It is also to be noted that admittedly the said suit was filed even after the winding up order was passed by the Court.
According to Mr. Sen, the non-payment of the amount in terms of the agreement cannot give a right to the petitioning creditor to file such application for winding up of the Company in question. He further pointed out that the petitioner was a secured creditor and the petitioning creditor has a right to release its dues by selling the said equipment and in support of such submission, he relied upon the decisions reported in 24 Company Cases 473 (Mediqup Systems Pvt. Ltd. -Vs.- Proxima Medical System Gmbh); 2005 (4) CHN 343 [SRC Steel (P) Ltd. -Vs. - Bharat Industrial Corporation Ltd.]; 49 C.W.N 246 (Sm. Kiranmoyee Dasi & Anr. -Vs. - Dr. J. Chatterjee); AIR 1977 Supreme Court 577 (M/s. Mechalec Engineers & Manufacturers -Vs.- M/s. Basic Equipment Corporation) and 1999 (1) All ER 374 (In Re : Bayoil SA Seawind Tankers Corp -Vs.- Bayoil SA) and submitted that a Company had a genuine and a serious cross-claim.
Therefore, according to him, the Court should not have passed the said order. On the contrary, it was submitted by Mr. Mukherjee, Learned Senior Advocate appearing on behalf of the respondent that even a secured creditor can apply for winding up of a petition and hence he drew our attention to Sections 439(1)(b) and 439(2) of the Companies Act.
Mr. Mukherjee further submitted that the petitioning creditor has specifically stated in paragraph 64 of the winding up petition that the petitioner has reason to believe and apprehend that the value of the system is inadequate to meet the petitioning creditor's present dues. He also drew our attention to the order passed by the Hon'ble Court on July 7, 2005 admitting the winding up petition. It further appears from the said order that the Hon'ble Company Judge was convinced that the Company is unable to pay its dues at least prima facie. He was also convinced that there is no bona fide dispute raised by the company to evade the payment of the dues. The facts brought out by the Company as and by way of defence would otherwise show that the Company is in involved circumstances.
Hence, Mr. Mukherjee pointed out that the company failed to give the dues even for 4 years.
He further drew our attention to the Memorandum of Appeal and to the grounds therein being Ground Nos. (B), (I), (J) and (N) where the Company has contended that the Hon'ble Court should have given reasonable instalments to the Company to pay all the dues.
He further submitted that the Company has asked for leave to pay the dues in such instalments which was opposed by the petitioning creditor. Therefore, the Company cannot have any grievances against the impugned order.
Hence, Mr. Mukherjee submitted that the Company approached the petitioning creditor to pay the dues in instalments which would be evident from the letters addressed by the Company. Therefore, there cannot be any dispute with regard to the petitioning creditors' claim.
He further submitted that the appellant has no ground to press this appeal. He also relied upon the decisions reported in (1999) 97 Company Cases 683 (Haryana Telecom Ltd. Vs. Sterlite Industries (India) Ltd.) and 1966 SC 1707 (Harinagar Sugar Mills Co. Ltd., Bombay Vs. Court Receiver) at page 1709 where the Hon'ble Supreme Court has approved the passage of the Palmer's Company Precedents, Part-II, 17th Edition, page 25 where it has been specifically held that that it is a well-known proposition of law that winding up petition is an equitable mode of execution of just and undisputed debts. Therefore, according to him, the Court has power to pass such order.
He further submitted that the Company had cited 3 cases namely, a) (1999) 1 All E R 374; b) (2005) 4 CHN 343; and c) (2005) 124 Company Cases 473 on the plea of counter claim being a defence to a winding up petition. The proposition is not disputed but the so-called plea of counter claim has not been raised in the pleadings nor in the Memorandum of Appeal. It has been casually stated in course of arguing the appeal that the company has recently filed a suit (obviously after the winding up order was passed) making a claim against the petitioning creditor. It is submitted that this is an afterthought and without any basis and no credence should be given to the same.
Hence, in these circumstances, he submitted that the appeal should be dismissed. After considering the facts and circumstances of the case and after going through the materials on record placed before us and after analysing the law laid down in the decisions cited at the Bar, we do not find that there is any reason to interfere with the order so passed by the Hon'ble Company Judge. It is well-settled that an order under Section 433(e) of the Company Act is a discretionary one and there must be a debt due and the Company must be unable to pay the same.
Hence, it appears from the facts and circumstances in the present case that the Company is unable to pay its dues and the debt has already been determined and the amount is also payable. Hence, in our opinion, it is well-settled law that a winding up petition is a perfect remedy for enforcing payment of a just debt.
The Hon'ble Supreme Court has opined in the case of Harinagore Sugar Mills, reported in 1966 (36) Company Cases 426 that although winding up petition is not a normal alternative for the realisation of debts yet it is a form of equitable execution.
The suit which has been filed by the petitioner is nothing but a counter blast and the same was filed even after the winding up petition at the first stage.
Therefore, after perusing all these facts and circumstances of the instant case, we find that the Hon'ble Company Court has correctly came to the conclusion and passed the said order.
Hence, we do not find that there is any reason to interfere with the said order and we affirm the judgement and/or the order so passed by the Hon'ble Company Judge and hence, in our considered opinion, for the reasons stated hereinabove, the appeal is dismissed.
( PINAKI CHANDRA GHOSE, J. ) (SANKAR PRASAD MITRA, J.)