Dismissed

The Government of the State of Israel through Consul Generla of Israel v. Earnest Business Services Pvt. Ltd. Cin No. U74999MH1991PTC063880

Bombay HC2 Jul 2018CP/274/2016

Case brief

AI extract

What is this about?

In a company winding-up petition, the Bombay High Court dismissed the application because the petitioner's claim for the security deposit was secured by an interim arbitral order investing funds in a corporate deposit, negating the ground of insolvency.

What did the court decide?

Petition for winding up of the respondent company dismissed on the ground that the petitioner's claim has been secured via an interim arbitral order.

The Government of the State of Israel through Consul Generla of… — Arbitration | Bombay HC (2018)

¶1

31.CP-274-2016.doc

¶2

1/3

¶3

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

¶4

COMPANY PETITION NO.274 OF 2016

¶5

The Government of the State of Israel (Through the Consul General of Israel)

¶6

….Petitioner

¶7

Vs.

¶8

Earnest Business Services Private Limited ….Respondent

¶9

Ms. Shruti Maniar a/w. Ms. Simantini Mohite I/b. Solomon and Co. for petitioner.

¶10

Mr. Sharan Jagtiani a/w. Mr. Mutahhar Khan and Ms. Eram Quraishi I/b. Kartikeya and Associates for respondent.

¶11

CORAM : K.R.SHRIRAM, J. DATE : 2^nd JULY 2018

¶12

P.C.:

¶13

1 This petition is for winding up of respondent company - Earnest Business Services Private Limited (the company) under the provisions of the Companies Act, 1956 on the ground that the company is unable to discharge its debts and is commercially insolvent.

¶14

2 The underlying dispute is an agreement to provide business center facilities and agreement for support services, both dated 2^nd March 2010. Under these agreements, petitioner was occupying the business center area provided by the company. As per the agreements, petitioner had given an interest free refundable security deposit of Rs.64,80,000/- plus Rs.52,20,000/ - totaling to Rs.1,17,00,000/-. These amounts were to be returned upon completion of the term of the agreements or upon earlier termination. It is petitioner's case that the agreements came to an end and

Gauri Gaekwad

31.CP-274-2016.doc

2/3

the company has not returned this amount of Rs.1,17,00,000/-. It should also be noted that the term of the agreement was extended. The short point is, it is petitioner's case that this amount of Rs.1,17,00,000/-, which is an admitted amount, has not been returned and hence the company is unable to discharge its debts, is commercially insolvent and should be wound up.

¶19

3 Both the agreements provided for arbitration and on an application filed by petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), this Court was pleased to appoint an Arbitrator by its order dated 14^th September 2016. No order was passed under Section 9 but the Learned Arbitrator was directed to consider the petition under Section 9 as a petition under Section 17 of the Arbitration Act. The application under Section 17 has been heard by the Arbitrator and by an order dated 20^th December 2016 read with order dated 15^th September 2016, the Arbitrator has secured petitioner's claim to the extent of Rs.1,17,00,000/-. This amount of Rs.1,17,00,000/- is invested in Corporate Deposit with one Frank Merchant Bankers, a group entity of respondent company. Petitioner has not challenged the Arbitrator's order and the interim order has attained finality. The arbitral proceedings have also progressed thereafter, evidence has been recorded and the matter is placed for final arguments today.

Gauri Gaekwad

31.CP-274-2016.doc

3/3

4 Therefore, since petitioner's claim has been secured, petitioner is satisfied with the security and not having challenged the orders passed under Section 17 of the Arbitration Act, I am unable to gather myself to come to a conclusion that the company is unable to discharge its debts, is commercially insolvent and requires to be wound up.

¶24

5 Therefore, petition dismissed. It is clarified that this Court has

¶25

not made any observation on the merits of the claim in the petition.

¶26

(K.R. SHRIRAM, J.)

¶27

Gauri Gaekwad

The Government of the State of Israel through Consul Generla of Israel v. Earnest Business Services Pvt. Ltd. Cin No. U74999MH1991PTC063880

Case brief

What is this about?

What did the court decide?

The Government of the State of Israel through Consul Generla of Israel v. Earnest Business Services Pvt. Ltd. Cin No. U74999MH1991PTC063880

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

Similar cases

Arun Mulji Mehta Vs M/S Varun Resources Ltd. Cin No. U61200MH2010PLC208659

Hypo Alpe-Adria Bank International Ag. Vs M.V. Glory -I, and 5 Ors.

The Hongkong and Shanghai Banking Corporation Ltd. Vs Alok Industries Ltd. Cin L17110DN1986PLC000334

Deepak Gorakhnath Gawade Vs the Official Liquidator of Patheja Brothers Forging and Stamping Ltd.

Asset Care and Reconstruction Enterprise, Vs Lavasa Corporation Limited Cin No. U55101MH2000PLC187834

Asset Care and Reconstruction Enterprise, Vs Hindustan Construction Company Limited Cin No. L45200MH1926PLC001228