Calcutta High Court
Aryan Mining And Trading Corporation ... vs Vistra Itcl (India) Ltd on 18 September, 2017
Author: I. P. Mukerji
Bench: I. P. Mukerji
IN THE HIGH COURT AT CALCUTTA
ORIGINAL JURISDICTION
CA No. 429 of 2017
with
CP No. 1012 of 2016
In the matter of:
Aryan Mining And Trading Corporation Pvt. Ltd.
And
Vistra ITCL (India) Ltd.
CA No. 430 of 2017
with
CP No. 637 of 2016
In the matter of:
Aryan Mining And Trading Corporation Pvt. Ltd.
And
Vistra ITCL (India) Ltd.
(formerly known as IL & FS Trust Co.)
Before:
The Hon'ble Justice I. P. MUKERJI
Date: 18th September 2017
Appearance:
Mr. S. K. Kapur, Sr. Advocate
Mr. Ravi Kapur, Advocate
Mr. Sachin Chandrama, Advocate
for petitioning creditor in CP 637/2017
Mr. Ratnanko Banerjee, Sr. Advocate
Ms. Srishti Barman Roy, Advocate
for petitioning creditor in CP 1012/2016
Mr. Dipanjan Choudhury, Advocate
Mr. Suvradal Choudhury, Advocate
Ms. Srija Banerjee, Advocate
for the petitioning creditor in CP 637/2017 & CP 1012/2016
Mr. Pratap Chatterjee, Sr. Advocate
Mr. Jishnu Saha, Sr. Advocate
Mr. Joy Saha, Sr. Advocate
Mr. Anuj Singh, Advocate
Mr. R. Sarkar, Advocate
Mr. Avishek Das, Advocate
Mr. Ashok Kumar Singh, Advocate
for respondent company
Mr. Ranjan Bachwat, Sr. Advocate Mr. Rudraman Bhattacharya, Advocate Mr. Aditya Ginodia, Advocate for Tata Steel Ltd.
The Court: The following prayers have been made in each of the Judge's Summons:
"a. The petitioning creditor be directed to disclose the entire dues as on date jointly and severally payable by the Company and the BRPL as against the Loan and Debenture Agreements;2
b. Upon such debts being quantified and disclosed by the petitioning creditor and acceptance of upfront payment of Rs.15,00,00,000, the Company permitted to pay the balance sums within six months from the date of the order with an installment payable every week from the date of the order until full repayment;
c. Petitioning creditor be restrained by an appropriate order from dealing with, encumbering or in any manner taking recourse to the securities lying with the petitioning creditor in pursuance of the Loan Agreement and/or taking any coercive steps against the Company in the interim period;
d. Such further and other order or orders be made and/or direction or directions given as to this Hon'ble Court may deem fit and proper."
The main company petition is founded on the alleged inability of the respondent company to make payment of a sum of about Rs.17 crores to the petitioning creditor.
It appears from the submissions made at the bar that in the transactions between these two parties including the consortium referred to below there is a claim not less than Rs.600 crores of a consortium comprising of petitioning creditor and five other companies from the company. This has been secured by the petitioning creditor by pledging its shares in Brahmani Rivers Pallets Limited.
It was submitted by Mr. Chatterjee, learned senior advocate for the company that the value of these shares was more than Rs.1,000/- crores.
Mr. Chatterjee also submitted that his client was in a position to make payment of Rs.480 crores within a fortnight and put in a further Rs.80 crores in an escrow account.
3
I accept the contention of Mr. Kapur and Mr. Banerjee that in this winding up petition the prayers that have been sought cannot be granted.
But I do take note of Mr. Chatterjee's further submission that his client had requested the petitioning creditor to sell the shares earlier and that they had taken no steps to do so.
During the course of hearing of these applications, the petitioning creditor wrote to the company giving them one day's notice that they were about to take steps to sell the shares.
It is absolutely true that this Court has got no power to pass orders as prayed for in the Judge's Summons.
Nevertheless I observe that this winding up application was filed against the company, without taking any steps to sell the pledged shares. Neither any Civil Court was approached by the petitioning creditor to recover its loan or to sell the shares. Now, this sudden decision to enforce rights under the pledge is bound to take the respondent Company by surprise.
On 15th September 2017 these applications (CA No. 429 of 2017 with CP No. 1012 of 2016 and CA No. 430 of 2017 with CP No. 637 of 2016) were moved and the following order was passed by this Court:
"The Court: Upon mentioning by Mr. Saha, learned senior counsel at 2 p.m. CA 429 of 2017, CP 1012 of 2016 [Aryan Mining and Trading Corporation Pvt. Ltd. -And- Vistra ITCL (India) Ltd.] and CA 430 of 2017, CP 637 of 2016 [Aryan Mining and Trading Corporation Pvt. Ltd. -And- Vistra ITCL (India) Ltd.] are treated as on the day's list.
It is heard in the presence of the learned counsel appearing for the parties. Mr. Saha submits that his client has received one day's notice from the petitioning creditor that they are about to sell the pledged shares. He submits that when the matters have been directed by this court to appear on 18th September, 2017 as 'New Motion', this kind of 4 a notice is an act of overreaching the court. The court should immediately pass an order restraining the transfer. Mr. Kapoor, learned senior counsel submits that his client is the pledgee of those shares. This pledge also includes transactions, which are not the subject matter of the winding up application. The entire debt of the company towards the petitioning creditor is about Rs.560 crores as submitted by Mr. Kapoor. This court should not pass any restraint order. He confessed that he was not in a position to stop the intended sale of the pledged shares. If the court found that such sale was wrongful it could take action on the returnable date of the said application.
I confess that within this short time this court is unable to appreciate the entire facts of this case. Whether or not this sale of the pledged shares would be wrongful or not cannot be ascertained by this court at this time. If at all the said sale takes place, it would be open to the company to take the point on the returnable date of the application. However, considering the facts before the court, I direct that in the event the petitioning creditor is selling the shares, it will notify the company about the name of the purchaser and the consideration it is expected to receive to enable the company to redeem the pledge or to take such action with regard to the shares as may be available to them. The returnable date of this application remain unchanged i.e. on 18th September, 2017.
All points including the maintainability point are kept open.
This order is passed without prejudice to the rights and contentions of the parties. Issue signed copy." It is submitted today that after the said order was passed the said shares in the dematerialised account of the petitioning creditor described as "pledge" have been transferred to their beneficial account.
Considering the above facts and circumstances, the following order is passed as, in my opinion, it will subserve the ends of justice: 5
(a) The status quo with regard to the shares should be maintained up to 24th October 2017 to enable the company to take such steps as they may be advised.
(b) If it is found by the petitioning creditor that the price of the shares has risen or fallen unusually, they will have the power of selling the shares upon three working day's notice to the company so that the shares are sold at the highest price available or to enable the company to redeem the shares at that price or take any other step that they deem fit and proper.
Before parting with this case I add that Tata Steel Limited represented by Mr. Bachawat will be at liberty to invite the parties for a meeting which the parties will consider in their own wisdom.
This order will not in any way preclude the respondent from making payment of the above dues of the petitioning creditor.
Affidavits were not invited as all the papers were available in the petition. The allegations in the petition are deemed not to be admitted.
These applications are accordingly disposed of. Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(I. P. MUKERJI, J.) R. Bose