The High Court of Karnataka allowed an application to withdraw Company Petition No.203 of 2010. The applicant bank sought withdrawal based on its indemnity agreement terms and lack of funds for the proceeding, finding no prejudice to the respondent.
The applicant is permitted to withdraw Company Petition No.203 of 2010.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON’BLE MR. JUSTICE S.R.KRISHNA KUMAR
COMPANY APPLICATION NO.43 OF 2022 IN COMPANY PETITION NO.203 OF 2010
BETWEEN
THE BANK OF NEW YORK MELLON HAVING BRANCH OFFICE AT 40TH FLOOR, ONE CANADA SQUARE , LONDON, E 14 5AL, ENGLAND. REPRESENTED BY ITS AUTHORISED SIGNATORY
… APPLICANT
(BY SRI ANIND THOMAS, ADVOCATE)
AND
CRANES SOFTWARE INTERNATIONAL LIMITED A COMPANY INCORPORATED UNDER THE CAMPANIES ACT, 1956 HAVING REGISTERED OFFICE AT # 29, 7TH CROSS, 14TH MAIN, VASANTHNAGAR, BENGALURU 560052, KARNATAKA, INDIA.
… RESPONDENT
(BY SRI K S MAHADEVAN, ADVOCATE FOR OL)
THIS COMPANY APPLICATION IS FILED UNDER SECTIONS 433 & 434 OF THE COMPANIES ACT, 1956 R/W RULE 100 OF THE COMPANIES (COURT) RULES, 1959, PRAYING TO PERMIT THE APPLICANT/PETITIONER HEREIN TO WITHDRAW THE PRESENT COMPANY PETITION & ETC.
THIS COMPANY APPLICATION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
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ORDER
C.A. No.43/2022 is filed by the Applicant-Bank seeking withdrawal of the Company Petition in Co. P. No.203/2010.
stated as under:
4. I state that the facts and circumstances leading up to the filing of the instant petition have been set out in detail in the Company Petition and for the sake of brevity, I crave leave of this Hon'ble Court to refer to and rely on the contents of the Company Petition as if they were set out in this Affidavit.
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5. I state that on November 28, 2017, this Hon'ble Court passed an order directing the Respondent to be wound up. Thereafter, pursuant to the applications made before this Hon'ble Court from time to time and in view of the possibility of an amicable settlement between the Respondent and certain holders of the Bonds (the "Instructing Bondholders"), there have been orders issued by this Hon'ble Court staying the operation of its winding up order dated November 28, 2017.
6. I state that pursuant to instructions from the Instructing Bondholders, the Applicant/ Petitioner was instructed to commence the present Company Petition. Pursuant to a deed of indemnity dated December 11, 2009 (the "Deed of Indemnity") between the Applicant/ Petitioner and the Instructing Bondholders, the Instructing Bondholders must provide the Applicant/ Petitioner with funds for, inter alia, the present Company Petition, which the Applicant/ Petitioner shall hold in an account (the "Indemnification Fund Account"). Pursuant to the terms of the Deed of Indemnity, if the balance of the Indemnification Fund Account
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falls below 50% of a specified minimum amount (the "minimum amount") and funds are not deposited by the Instructing Bondholders to replenish the Indemnification Fund Account to the minimum amount within ten (10) business days from a request by the Applicant/ Petitioner, the Applicant/ Petitioner may withdraw the present Company Petition.
7. The Applicant/ Petitioner sent a letter dated August 25, 2021 to the Instructing Bondholders Informing them that the funds in the Indemnification Fund Account have fallen below 50% of the minimum amount and requesting them to deposit funds in the Indemnification Fund Account to restore it to the minimum amount.
8. Despite a period of 10 business days having elapsed from the date of the letter dated August 25, 2021, the Instructing Bondholders have not deposited the funds requested. Accordingly, the Applicant/ Petitioner issued a letter dated September 14, 2021 informing the Instructing Bondholders of its intention to withdraw the present Company Petition. The
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Applicant/ Petitioner has not received any response to the said letter.
9. Further, on August 18, 2021, the Applicant/ Petitioner was notified by Sun Global Investments Limited, who 25.2% of the Bonds, that it does not wish to continue the present Company Petition in the interest of business revival of the Respondent.
10. In the circumstances detailed above, the Applicant/ Petitioner is exercising its rights not to further pursue the present Company Petition and seeks leave of this Hon'ble Court to withdraw the present Company Petition.
11. I state that no prejudice, hardship, or inconvenience would be caused to the Respondent or any other person or entity if the present Application is allowed. However, grave prejudice, hardship and irreparable injury would be caused to the Applicant/ Petitioner if the present Application is not allowed."
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applicant permitted to withdraw Co. P. No.203/2010. In the result, I pass the following:
ORDER
C.A. No.43/2022 is hereby allowed. The
applicant is permitted to withdraw Company Petition No.203/2010.
Sd/JUDGE
AN/-
2 issues framed by the court
Whether the applicant bank is entitled to withdraw the winding up petition filed under Sections 433 and 434 of the Companies Act, 1956.
Whether withdrawal of the petition would cause undue prejudice to the respondent.
2 provisions across 2 enactments
THE BANK OF NEW YORK MELLON
CRANES SOFTWARE INTERNATIONAL LIMITED
S.R. KRISHNA KUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
