Madhya Pradesh High Court
The Hongkong And Shanghai Banking ... vs Chairman Cum Managing Director Zoom ... on 20 November, 2014
1
HIGH COURT OF MADHYA PRADESH: BENCH:
INDORE
(SINGLE BENCH: HON.MR.JUSTICE PRAKASH
SHRIVASTAVA)
COMPANY PETITION NO.3/2010
Hongkong & Shanghai Banking Corporation (HSBC Bank)
Vs.
Zoom Developers Pvt. Ltd
Shri.D.S.Panwar, learned counsel for the petitioner.
Shri S.C.Bagadiya, learned Sr.Counsel with Shri
Dharmendra Jain, learned counsel for the respondent.
Shri V.P. Khare, learned counsel for proposed
intervener Punjab National Bank.
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Whether approved for reporting:-
ORDER
(Passed on 20th November, 2014) The petitioner Hongkong & Shanghai Banking Corporation has filed the present Company Petition u/S.433 and 434 of the Indian Companies Act, 1956 for winding up of the respondent company. [2] The case of the petitioner company is that the the petitioner had sanctioned a domestic factoring facility with limit of Rupees 500 lakhs and overdraft facility and export facility for projects/negotiation of documents against acceptance with a combined limit of Rs.250 lakhs to Ismart Global Private Ltd (IGPL) which is the sister concern of the respondent company. Various documents such as agreement for overdraft/loan against hypothecation of book of debts, letter of continuity for overdraft/cash credit, demand promissory note etc. 2 were executed in favour of the petitioner. The respondent company had stood as the corporate guarantor. Board of directors of the respondent company had resolved to extend the corporate guarantee for Rupees 750 lakhs in favour of the petitioner to secure the above credit facilities extended to IGPL and the authorised Director of the respondent company had executed the corporate guarantee in favour of the petitioner.
[3] Further case of the petitioner is that various amounts were disbursed to IGPL in pursuance to the above credit facilities and IGPL had defaulted in repayment of the amount. Inspite of the commitment by the IGPL the entire repayment was not done. The petitioner on account of constant over dues in the overdraft and factoring facilities and breach of financial covenance by the IGPL had withdrawn the facility with immediate effect vide its letter dated 12th May, 2009 and had asked the IGPL to clear all the outstanding along with the interest. Since the payment was not done the petitioner was constrained to invoke the corporate guarantee of the respondent company vide letter dated 20th July, 2009 for the repayment of the outstanding amount of Rs.3,60,57,940/- along with interest of Rs.3,23,001/-. According to the petitioner the liability was accepted by the respondent in the letter dated 31st July, 2009. The petitioner had served the statutory notice u/S.434(1)(a) of the Act dated 6th October, 2009 to the respondent company. The reply dated 22nd October, 2009 was sent by the respondent company admitting the liability and praying for extension of time to repay the outstanding amount but the amount was not paid, therefore, the petitioner had filed the present winding up petition along with IA No.383/2010 for appointment of official liquidator as provisional liquidator. [4] The respondent had initially filed the preliminary reply dated 27/7/2010 stating that the current assets of the company as on 30th 3 September, 2009 are more than its liability and that the petitioner has already approached the Mumbi Debt Recovery Tribunal by filing OA No.66/2010. The further reply dated 12/9/2011 was filed by the respondent stating that the respondent has filed suit for damages being Suit No.201/2011 against Punjab National Bank and 27 other banks. The respondent then filed the additional affidavit dated 25/2/2014 stating that a non fund based credit limit of 2510 crores was sanctioned to the respondent by "PNB Consortium" consisting of 25 banks and respondent had also availed the credit facilities from the members of the consortium banks and other banks for its various projects outside the consortium by offering separate collateral securities. Some of the members of the consortium have initiated proceedings against the respondent bank under the SARFAESI Act by issuing notice u/S.13(2) of the Act and have taken measures by issuing the possession notices in respect of all the mortgaged properties. The possession of the mortgaged properties has been taken and the auction notice was also issued. The respondent has also filed the affidavit dated 17/2/2014 declaring assets of the respondent company stating that all the members of the consortium bank have initiated proceedings under the SARFAESI Act against the mortgaged properties and have also initiated recovery measures by way of filing Original Application before the DRT, Mumbai. It has further been stated that the respondent has suffered huge losses and its business has disrupted and ceased and huge losses have been suffered on account of the acts of the petitioner and consortium banks. It has further been stated that after stoppage of the work in November, 2009, all its employees have left the company for want of payment of salaries and office infrastructure facilities have been confiscated by the landlords due to non payment of rent. The hardware and software including valuable assets have been seized/taken away by the 4 employees/landlords. It has further been stated that all its movable assets were confiscated/eroded and no assets have been left except the assets, the details of which have been disclosed in Annexure-2 of the affidavit. It has also been stated that the petitioner as a secured creditor has taken separate steps for recovery of dues by filing an Original Application before the DRT, Mumbai against Smart Global Pvt. Ltd as well as the respondent.
[5] The Punjab National Bank has filed an application for intervention being IA No.3007/2011 as also the reply to the Company Petition stating that consortium comprising of 26 banks with Punjab National Bank as its lead bank had allowed bank guarantee and other facilities to the respondent in which the respondent had committed default, therefore, the action has been initiated by the members of the consortium bank under the SARFAESI Act and Punjab National Bank has also filed the Original Application in DRT, Mumbai for recovery of 484.78 crores, therefore, the winding up order in the present matter will prejudicially affect the interest of the consortium banks.
[6] Having heard the learned counsel for parties and on the perusal of the record, it is found that the respondent company had stood as the corporate guarantor for domestic factoring facility and over draft facility and export facility which was extended by the petitioner to Smart Global Pvt. Ltd (IGPL), a sister concern of the respondent company. The record also reveals that the IGPL had committed default in respect of the repayment and the outstanding amount as per letter dated 20th July, 2009 sent by the respondent company invoking the corporate guarantee was to the tune of Rs.3,60,57,940/- along with interest of Rs.3,23,001/-. The petitioner has invoked the corporate guarantee of the respondent vide its letter dated 20th July, 2009. The service of notice in terms of Sec.434(1)(a) of the Act on 5 the respondent is also not in dispute. The outstanding amount is more than the statutory requirement as per Sec.434(1)(a) . The company has no substantial defence nor any cogent material as prima facie proof of defence has been proved. The allegation of the respondent company is that on account of the acts and deeds of the petitioner, the respondent company had suffered the loss. Admittedly the work of the respondent company has ceased. Its employees have left and even its movable assets have been taken away by the employees and landlords. Thus a case for admitting the company petition is made out. [7] The Punjab National Bank has raised an issue before this Court that the consortium of the bank who had extended the credit facility to the respondent have already approached the DRT and that the petitioner has also invoked the provisions of SARFAESI Act and approached the DRT, therefore, the present company petition is not maintainable. This issue has been elaborately dealt with in the connected Company Petition No.9/2011. In view of the detailed order passed in the connected company petition No.9/2011 also a case is made out for admitting the present company petition.
[8] Accordingly, the company petition is admitted. Let the petition be advertised in accordance with the rules. Since in the connected petition, this court has already passed an order for winding up of the respondent company and has also appointed the Official Liquidator, therefore, no separate order in this regard in the present petition is required. The connected company petition No.9/2011 will be treated as lead petition in the further proceedings.
[9] List on 26/2/2015.
(Prakash Shrivastava) Company Judge VM