Allowed

M/S. Gupta Synthetics Limited v. SBI Global Factors Ltd.(Formerly Known as M/S/ Global Trade Finance Ltd)

Bombay HC2 Feb 2012APP/99/2012

Case brief

AI extract

What is this about?

The High Court of Bombay allowed an appeal against an interim order directing the appellant company to deposit ₹1 crore. The Court set aside the order, directing the appellant instead to pay monthly installments to the respondent-cum-creditor until March 2012. Admission of the winding-up petition is subject to compliance with payment terms.

What did the court decide?

Impugned order to deposit ₹1 crore set aside. Appellant directed to pay ₹25 lakhs/month respondent until March 31, 2012; default in any two installments leads to admission of winding-up petition.

M/S. Gupta Synthetics Limited Vs SBI Global Factors… — Company and Corporate | Bombay HC (2012)

appl 56.12

SSK/903

IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J.

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APPEAL (LODGING) NO. 56 OF 2012 IN

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COMPANY PETITION NO. 207 OF 2010

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M/s. Gupta Synthetics Limited ....Appellant Versus SBI Global Factors Ltd. ...Respondent

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Mr. Gaurang R Joshi with Ms. Rajni Diwakar & Mr. Niraw Shah i/b. M/s. Little & Co., advocate for the appellant.

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Ms. Rajni Iyer, senior counsel with Mr.Chirag Balsara and Ms.Priyanka Desai i/b. M/s. K. Ashar & Co., advocate for the respondent.

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CORAM : MOHIT S SHAH, C.J. & RANJIT MORE, J.

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DATED :2^nd February, 2012.

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P.C.:

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This appeal is directed against the Order dated 23^rd December, 2011 of learned Company Judge in Company Petition No.207 of 2010 directing the appellant-company to deposit a sum of Rs.1,00,00,000/- on or before 2^nd February, 2012, failing which, the Court will proceed to pass an order admitting the petition and appointing a Provisional Liquidator so as to take charge of the assets and properties of the company. Learned counsel for appellants, invited our attention to the Order dated 27th October, 2010 of the learned Company Judge by which the appellant-company was required to deposit the amounts as per the following schedule :

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i. The Company shall pay an amount of Rs.50,00,000/-

appl 56.12

SSK/903

(Rupees Fifty Lacs only) to the Petitioners within a period of 8 weeks from the date of this order.

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ii. Out of the said amount of Rs.50 lacs, the Petitioners shall appropriate Rs.34 lacs towards the principal amount due from the Company and Rs.16 lacs towards interest.

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iii. The Company shall, commencing from November, 2010, pay monthly installments of Rs.25,00,000/- (Rupees Twenty Five Lacs only) to the Petitioners for a period of six months. The first installment shall be paid on or before 15^th November, 2010 and the subsequent five installments shall be paid on or before the 15^th day of each succeeding month.

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iv. Out of the said monthly installments of Rs. 25 lacs each, the Petitioners shall appropriate Rs.17 lacs towards the principal amount due from the company and Rs.8 lacs towards interest.

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Learned Company Judge also restrained the company from selling, parting with possession or creating third party rights, or encumbering any of its immovable assets except with prior permission of the Court.

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Learned counsel for the appellant states that the appellant has complied with the above conditions by making the deposit of Rs.25,00,000/p.m. not only for a period of six months as directed by learned Company Judge, but till November, 2011. Learned counsel further states that the appellant-company is ready and willing to pay the amounts

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appl 56.12

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SSK/903 3

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@ Rs.25,00,000/- p.m. for the months of December, 2011 and January, 2012 as well, and thereafter, for the months of February and March, 2012 @ Rs. 25,00,000/- p.m.. It is submitted that since there are about 650 workmen who along with their family members are dependent on the wages received from the company for their livelihood and appellant-company has a turnover of Rs.300 crores p.a. and the appellant-company is also paying substantial amount of excise-duty and other taxes to the State Exchequer, admission of winding-up petition would paralyze the commercial operations of the company, as no suppliers would supply goods, raw materials on credit and it would be impossible for the appellant to run the company which would not only result into loss of employment of 650 workers and also loss to the State-Exchequer as indicated above. It is further submitted that the appellant-company is in the process of restructuring the debts of the secured creditors for which IDBI has already made a study and submitted a report.

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4 . On the other hand, Mrs. Rajni Iyer, learned counsel for the petitioning creditor/respondent herein, has opposed the appeal and submitted that as per the finding given by learned Company Judge, the appellant-company still owes the petitioning creditor, more than Rs.7,00,00,000/- and that in view of the admitted liability, learned Company Judge was justified in passing the impugned order. A reference is also

appl 56.12

SSK/903

made to the state of affairs of the appellant-company as indicated by learned Company Judge in Para 4 of the impugned order.

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Having heard learned counsel for the parties, we are of the view that since learned Company Judge had while passing Order dated 27th October, 2010, stipulated certain conditions and directed the appellantcompany to pay monthly installments of Rs.25,00,000/- for a period of six months and the appellant-company continued to make payments of the monthly installments even beyond the period of six months, and learned Company Judge had observed that if the respondent-company makes payment to the petitioning creditor as per the directions in the said Order dated 27th October, 2010, the company petition will appear before the Court for admission and the Company Court shall review the progress of the company and pass appropriate orders, it would be in the fitness of things to set-aside the impugned order directing the appellant-company to

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deposit a sum of Rs.1,00,00,000/- on or before 2 nd February, 2012 and providing for consequences of default i.e. an order admitting the winding-up petition and appointment of Provisional Liquidator. This shall, however, obviously be subject to the condition that the appellant-company shall comply with the statement made at the hearing of this appeal and pay the petitioning creditor/respondent herein, installments of Rs.25,00,000/- each for four fortnights i.e. 15 th February, 2012,

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SSK/903

th t h th 29 February, 2012, 15 March, 2012 and 30 March, 2012 so as to cover the monthly installments of Rs.25,00,000/- each for the period up to

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31s t March, 2012. If the payments are made as aforesaid, the company petition shall be listed for admission before learned Company Judge on

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t h 9 April, 2012 and learned Company Judge will review the progress of the company and pass appropriate orders. In case of default in payment of any two installments as indicated above, the company petition shall stand admitted. The appeal is, accordingly, allowed and is disposed of as such.

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(CHIEF JUSTICE)

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(RANJIT MORE, J.)

M/S. Gupta Synthetics Limited v. SBI Global Factors Ltd.(Formerly Known as M/S/ Global Trade Finance Ltd)

Case brief

What is this about?

What did the court decide?

M/S. Gupta Synthetics Limited v. SBI Global Factors Ltd.(Formerly Known as M/S/ Global Trade Finance Ltd)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Parties & counsel

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