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Judgment
In this application, the petitioning creditor has prayed for winding up of the Company, namely M/s. Paper Trade & Industries Pvt. Ltd. (hereinafter referred to as "the Company") under section 433 (e) of the Companies Act, 1956 (in short, "the Act of 1956").
A copy of this application was served upon the Company and it was also granted an opportunity to file its affidavit in opposition. However, the Company did not file its affidavit in opposition and when the application was taken up for hearing it remained unrepresented.
The petitioner is a Company duly registered with the Reserve Bank of India as an Asset Reconstruction Company in terms of section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act"). The petitioner is also a "financial institution" as defined in section 2(h) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act of 1993"). As mentioned hereinafter, the petitioner is the assignee of all debts due by the Company in favour of Indian Overseas Bank (hereinafter referred to as "the said bank"), a Banking Company within the meaning of section 5(c) of the Banking Regulation Act, 1949.
It is the case of the petitioner that in course of its business the company obtained financial facilities with an overall limit of Rs.9 crores from the said bank, comprising Cash Credit facilities of Rs.2 crores and Letter of Credit amounting to Rs.7 crores. The terms and conditions under which the company obtained the said financial facilities are recorded in the sanctioned letter dated October 16, 2007 issued by the bank and duly accepted by the company. As the consideration for obtaining such financial facility the company executed demand promissory notes, one for Rs. 2 crores and the other for Rs.7 crores in favour of the said bank. The company had also hypothecated its book debts and goods in favour of the said bank and the same were recorded in the relevant hypothecation documents all dated October 16, 2007 in favour of the said bank. Some of the directors of the company executed deeds of guarantee in favour of the said bank and there was also a corporate guarantee executed in favour of the said bank by M/s. Morgan Estate Pvt. Ltd., which had mortgaged one of its immovable properties situated at 5A and 5B Lenin Sarani, Kolkata in favour of the said bank. At the instance of the company, the said financial assistance guaranteed by the said bank was renewed from time to time, lastly as per the terms and conditions mentioned in the sanction letter dated September 29, 2010. The said immovable properties situated at 5A and 5B Lenin Sarani continued to be mortgaged with the said bank and the company had also executed demand promissory note and fresh document of hypothecation in favour of the bank. The said M/s. Morgan Estate Pvt. Ltd. and another company namely M/s. Paper Trade Industries Pvt. Ltd executed to deeds of guarantee of dated September 29, 2010 in favour of the said company. In order to secure repayment of the said financial assistance obtained by the company and immovable property situated at 1/1 Satyan Roy Road was also mortgaged by the owners thereof in favour of the said bank. The company, however, failed to repay its dues to the said bank and it was subsequently declared as a Non Performing Asset of the said bank and called upon the Company to pay its outstanding dues of Rs.6,84,43,153.72. The Company deferred one time settlement of its dues which could not be accepted by the bank. Accordingly, on January 10, 2012 the said bank issued a notice under Section 13 (2) of the SARFAESI Act, 2002 calling upon the company to pay its outstanding dues of Rs. 7,34,29,367/-. The company, however, failed to make any payment to the said bank and, as such, the latter filed an application, OA no. 136 of 2013, under Section 19 of the Act of 1993 for recovery of its outstanding dues of Rs.8.73,74,397/-. Thereafter, by a registered assignment agreement dated June 22, 2015, the said bank assigned, transferred and released all the financial assistance extended to the company in favour of the petitioner, together with all the underlying security interest in terms of Section 5 of the SARFAESI Act, with effect from March 26, 2014.
In view of the default committed by the Company by a notice dated April 22, 2016 issued under section 434 of the Act of 1956, the petitioner called upon the Company to pay its outstanding dues of Rs.14,03,74,159/-. In spite of due receipt of the said notice, the Company neither responded to the said notice nor made any payment to the petitioner. Thus, the petitioner has filed this application claiming winding up of the Company.
Although the petitioner is a secured creditor of the Company, but it has the right to maintain the present winding up application. This view is fortified by the decision of the Division Bench of this Court in the case of Eastern Spinning Mills & Industries Ltd., reported in 177 Company Cases 15.
As mentioned earlier, a copy of this application was served upon the Company and in presence of its advocate this Court granted an opportunity to the Company to file its affidavit in opposition to this application. The Company has, however, not filed any affidavit nor has it contested this application.
In the instant case, the Company has duly received the notice dated April 22, 2016 issued by the petitioner under Section 434 of the Act of 1956 calling upon it to pay Rs.14,03,74,159/-. The Company has nevertheless, not replied to the said notice disputing the claim of the petitioner. Even the Company has chosen not to file its affidavit in opposition to this application or to appear before this Court to contest this application.
For the reasons aforesaid, this winding up application filed by the petitioner against the Company is admitted for Rs.14,03,74,159/-.
The petitioner is directed to cause the notice of this application being advertised once in the English newspaper, "The Times of India", Kolkata Edition and once in the Bengali newspaper, "Bartaman", Kolkata Edition. In the said notice, the petitioner will mention that this application will appear before this Court on the first Monday, from the date of publication thereof.
Urgent certified website copies of this order, if applied for, be supplied to the petitioner upon compliance with all requisite formalities.