Allowed

Gsd Properties and Trading Pvt.Ltd. v. Dr.Purnima Skin Care Pvt.Ltd, Cin NO.U85100MH2007PTC172335

Bombay HC13 Oct 2014CP/507/2013

Case brief

AI extract

What is this about?

The petitioner sought winding up of the respondent company for failure to pay an admitted decretal debt. The company admitted liability via a prior consent decree but failed to pay, citing inability due to losses. The High Court held the company was commercially insolvent and allowed the winding up petition.

What did the court decide?

The respondent company is to be wound up; the Official Liquidator is to be appointed as Liquidator with all powers under the Companies Act, 1956.

Gsd Properties and Trading Pvt.Ltd. Vs Dr.Purnima Skin… — Company and Corporate | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY PETITION NO.507 OF 2013

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GSD Properties and Trading Pvt. Ltd. … Petitioner versus Dr. Purnima Skin Care Pvt. Ltd. … Respondent

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Mr. Akshay Patil i/by M/s. India Law Alliance, for Petitioner. Mr. Chirag Mody i/by M/s. Divya Shah Associates, for Respondent.

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CORAM: S.J. KATHAWALLA, J.

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DATE: 13^th OCTOBER, 2014

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P.C.:

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By the above Company Petition, the Petitioner seeks the winding up of Dr. Purnima Skin Care Private Limited (‘the Company’) under Sections 433 (e) and (f) read with 434 (1) (a), 434 (1) (b) and Section 439 of the Companies Act, 1956 (‘the Act’). The Petition is taken up for hearing and final disposal.

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According to the Petitioner, the Petitioner had on 13^th December, 2010 filed a Summary Suit against the Company bearing No. No. 1455 of 2011

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for an order and decree against the Company to pay a sum of Rs. 1,01,68,569.31/-. The circumstances under which the said amount became due and payable to the Petitioner from the Company is set out in detail in the Plaint filed in Suit No. 1455 of 2011 and repeated in the above Company

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Petition. On 1^st July, 2011 the Suit was disposed of in terms of the Consent Terms filed by the Petitioner and the Company. By the said Consent Terms, the Company agreed, declared and confirmed that the Plaintiff had advanced an amount of Rs. 70,00,000/- to the Company with lump sum interest of Rs.50,00,000/- for facilitating the smooth functioning and operation of the Company, and in pursuance of the settlement arrived at between the Parties, the Company would repay an aggregate sum of Rs.1,20,00,000/- to the Plaintiff in installments as set out in the Consent Terms.

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The Company admittedly committed default in the payment of installments. The said Summary Suit therefore stood revived and appeared before this Court on 23^rd January, 2013 when by consent of the Parties i.e. the Petitioner and the Respondent herein, the Suit was decreed as prayed. The Company admittedly failed to pay the decretal amount to the Petitioner.

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In view thereof, the Petitioner through their Advocate served the statutory notice on the Company calling upon the Company to pay the decretal amount of Rs. 1,01,68,569.31/- together with interest of Rs. 45,86,721/- from the date of filing of the Suit till 8^th December, 2012 and further interest at the rate of 16% p.a. from the date of revival of the Suit till realization of the same within 21 days from the date of receipt of the statutory notice. The Company by its reply dated 4^th June, 2013 inter alia stated that the business of the

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Company had worsened and the Company was running in losses. The Company through its Advocate requested the Petitioner to have faith and trust in the Company and promised to pay the sum due to the Petitioner from time to time upon the Company improving its business. The Company has not paid any amount to the Petitioner by installments or otherwise.

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The Petitioner, therefore, filed the above Petition seeking winding up of the Company. At the stage of admission of the Petition, it was submitted on behalf of the Petitioner that the Company obtained the decree by consent. The Company is unable to pay its admitted decretal debt to the Petitioner. The Company has in response to the statutory notice agreed to pay its debt to the Petitioner in installments upon the Company improving its business. It was submitted that the Company is commercially insolvent and deserves to be wound up.

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The Company at the stage of Admission of the above Petition, filed its reply to the present Petition, wherein it contended that the Petitioner has no right to file the Company Petition and at the highest the Petitioner can execute the decree. It is submitted that it is a settled position of law that the winding up proceedings are not recovery proceedings for recovery of debts due to the party.

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The Petition was admitted by an order dated 18-07-2014 and was

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directed to be advertised. Paragraph Nos.7 and 8 of the said order are relevant and reproduced hereunder : -

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“7. I have considered the submissions advanced on behalf of the Company. The Company has in the Consent Terms filed before this Court in Summary Suit No. 1455 of 2011 admitted its liability to pay to the Petitioner an amount of Rs. 1,20,00,000/- in installments. The Company failed to pay the admitted dues of the Petitioner as agreed in the Consent Terms. In view thereof, the Summary Suit was revived and the Company by consent submitted to a decree in favour of the Petitioner as prayed in the said Suit. The Company failed to pay its admitted decreetal debt payable to the Petitioner. In response to the statutory notice, the Company admitted its inability to pay the amount as agreed under the consent decree. The Company also agreed to pay its admitted dues to the Petitioner in installments upon the Company improving its business. However, the Company has even failed to pay any sum thereafter. In view thereof, the decretal amount/debt is admittedly due and payable by the Company to the Petitioner. The Company is unable to pay the said decretal amount/debt to the Petitioner. The Company has therefore failed to pay its debt admittedly due to the Petitioner. The Petitioner has filed the present Company Petition to recover its debt, which is admittedly due and payable by the Company to the Petitioner. The Company cannot now be heard to argue that the Petitioner is trying to pressurize the Company to make payments or the Company Petition should not

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be entertained since through the said Company Petition the Petitioner is trying to recover its debt from the Company. It is true that winding up proceedings cannot be initiated against a Company to recover a debt which is bonafide disputed by the Company. The present Petition is filed by the Petitioner against the Company on the basis of an admitted debt which the Company is unable to pay to the Petitioner.

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8. The Petitioner is therefore, entitled to file the above Company Petition seeking winding up of the Company. Hence, the following order............”

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Pursuant thereto, the Petition has been advertised. Affidavits

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proving publication dated 28-08-2014 and 09-10-2014 are on record. Notice under Rule 28 of the Company Court (Rules), 1959 stood waived at the time of admission of the Petition.

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The only submission now advanced by the learned Advocate for the Respondent is that the Court should take cognizance of the conduct of the Petitioner Company. This Court informed the Advocate for the Respondent that the Company having admitted the claim of the Petitioner in Summary Suit No.1455 of 2011 and having obtained a Consent decree as prayed by the Petitioner, the Company now cannot be heard to say that the Court should consider the conduct of the Petitioner prior to the parties obtaining a decree by consent. The Advocate appearing for the Company fairly stated that he has

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nothing to submit qua the conduct of the Petitioner after the Company obtained a decree by consent and agreed to pay Rs.1,20,00,000/- to the Petitioner in installments. The Advocate for the Company also submitted that

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the Company is not in a position to pay the admitted amount of Rs.1,20,00,000/-. In view of the above, it is established that the Company is unable to pay its debts. For reasons set out in the order dated 08-07-2014 and herein, I am satisfied that the Company is commercially insolvent and deserves to be wound up. The Company Petition is therefore, allowed in terms of prayer clauses (a) and (b), which are reproduced hereunder :

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(a) that the Respondent Company Dr. Purnima Skin Care Pvt. Ltd., registered under the provisions of Companies Act, 1956, having its registered office at Amar Deep Jyoti Co-opl. Housing Society, Flat No.1, 1^st Floor, Plot No.537, above Adidas Showroom, Linking Road, Bandra (W), Mumbai – 400 052, be wound up by and under the orders and directions of this Hon'ble Court and the Official Liquidator attached to this Hon'ble Court be appointed Liquidator of the Respondent Company with all its assets, business, affairs, books of accounts, papers, bank books, vouchers, files, etc., with all powers under the provisions of the Companies Act, 1956;

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(b) that the Official Liquidator attached to this Hon'ble Court be appointed as Liquidator or some other fit and proper person be appointed the provisional Liquidator of the Respondent Company together with all powers to take charge

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of all its assets, business, affairs, books of accounts, papers, bank books, vouchers, files, documents, etc., with all powers under the provisions of the Companies Act, 1956; is Hon'ble Court be pleased to appoint the Official Liquidator attached to the High Court of Bombay or some other fit and proper persona s the Liquidator of the said Company with all powers under the provisions of the Companies Act, 1956 and in law generally.

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The Official Liquidator shall forthwith act on a copy of this order without waiting for any Notification.

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The Company Petition is accordingly disposed of.

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( S.J.KATHAWALLA, J. )

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Gsd Properties and Trading Pvt.Ltd. v. Dr.Purnima Skin Care Pvt.Ltd, Cin NO.U85100MH2007PTC172335

Case brief

What is this about?

What did the court decide?

Gsd Properties and Trading Pvt.Ltd. v. Dr.Purnima Skin Care Pvt.Ltd, Cin NO.U85100MH2007PTC172335

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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