1 cp66-2011.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.66 OF 2011 M/s.Kotak Mahindra Bank Ltd .. Petitioner versus Lonavala Constructions Pvt Ltd .. Respondent Ms.Rupali Lad i/by Gauri Sawant for the petitioner. Mr.Anil Menon i/by Anil Menon & Associates for the respondent. CORAM : S.C.DHARMADHIKARI, J. 17th November 2011. P.C.: . This petition for winding up by M/s.Kotak Mahindra Bank Ltd is filed on the basis that a statutory notice under section 434(1)(a) of the Companies Act, 1956 was duly served on the registered office of the company, but the company has failed to make payment or secure or compound the dues of the petitioner to its satisfaction. A sum of Rs. 74,63,852/- was claimed under this statutory notice dated 30th October 2010, a copy of which is marked as Annexure E, to the petition. 2} According to the petitioner, these dues arise on account of the financial services/loan granted by the petitioner for expansion of the existing business of the respondent. The respondent for availing of the 2 cp66-2011.doc loan facilities, issued the authorisation in favour of its Director and executed the documents, copies of which are Annexure B and B1 to this petition. The monies were utilised for purchasing the assets/equipments and they have been so utilised for business activities. The respondent had in discharge of the financial liability, agreed and undertaken to repay the loan in 47 equal installments from month to month. It is stated that the respondent failed and neglected to honour its commitments and committed defaults and, therefore, they were intimated that several cheques which were forwarded, came to be dishonoured on presentation. As a result of the continuing default, the facilities and the arrangement in that behalf was terminated by letters, copies of which are Annexures D1 and D2 and, therefore, the sums as due and payable on the date of the said termination were claimed by addressing this statutory notice and duly serving it. Since, there is no compliance, the necessary presumption that the company is unable to pay its debts be raised and the petition be admitted. 3} An affidavit in reply has been filed on behalf of the respondent in which it is stated that the petition is totally misconceived and infact an abuse of the process of the Court. The company is not guarantor of any 3 cp66-2011.doc loan or arrangement forming subject matter of the petition. It has been erroneously argued and contended that the Credit facility was availed of by Lonavala Construction Company. It has been pointed out that a distinct entity had availed of the credit facilities. In para 2 of the reply, it has been stated that the company is not guarantor of any loan or arrangement. It has been erroneously concluded that the credit facility was availed of by Lonavala Construction Company and that has been guaranteed by the respondent. That is not true. The guarantee is executed by the deponent of this affidavit Mr.A-Azhar Yakub Contractor, who is Managing Director of the respondent-Company, in his personal capacity. 4} As far as the explanation with regard to the resolution dated 24th August 2007 is concerned, it has been stated in para 5 of the reply that the resolution was passed by the company in expectation of the respondent-company being called upon to give a Corporate Guarantee to secure finance facility being availed of by the said Lonavala Construction Company which has borrowed funds from the petitioner. 5} It is also contended that the construction equipment to be 4 cp66-2011.doc purchased was not a Drum Mix Plant, but a Batch Mix Plant. This item is completely different and the relevant documents in respect of the purchase are with the petitioner-Bank. There is nothing like Drum Mix Plant. The explanation with regard to what was purchased and acquired by the deponent from the amounts borrowed from the petitioner is then disclosed. It is stated that the original application for loan was made by Lonavala Construction Company under Loan Application No.31234 wherein it was clearly mentioned that the proposed guarantor was deponent of the affidavit in reply in his personal capacity. The application was also signed by him as a proposed guarantor. The petitioner also relied upon a separate Loan Application Form No.31233 which is completely blank except for the second page where they have sought to fill up the particulars of the respondent-Company and have utilised the signature of the deponent of the affidavit in reply, taken in blank and affixed rubber stamp of the respondent-company. Thus, serious allegations are made against the petitioner in paras 7 to 10 of the affidavit in reply. For all these reasons, it is denied that the petition is filed bonafide and there was any dealing between the petitioner and the respondent-company. 5 cp66-2011.doc 6} In the affidavit in rejoinder, what is urged by the petitioner is, that the respondent executed the loan agreement as a guarantor. The Director of the Respondent initially contested one arbitration proceeding. The respondent has not taken any action against the staff by making compliance or filing proceedings, for alleged misuse of the seal/stamp of the company. There is no correspondence and now false allegations are made in the affidavit in reply. In the rejoinder, what is sought to be explained is that the Director of the respondent and the main working partner of the said Lonavala Construction Company is the same person who has been dealing with the petitioner. The provision of the Loan-cum-Guarantee agreement does not bar the petitioner from initiating proceedings of winding up of the company in absence of payment from the respondent-company inspite of the promises in that behalf. 7} Reliance is placed on various clauses of Loan-cum-Guarantee agreement. 8} After perusing the petition and the annexures thereto so also the affidavits on record, I am of the opinion that this petition for winding up 6 cp66-2011.doc cannot be entertained. There are serious disputes and particularly with regard to the privity of contract between the petitioner and respondent. If the respondent has stated on oath before this Court that the entity with which the petitioner dealt with is a partnership firm and that the guarantor of the dues of that partnership is also a Director of the respondent-company, but there is no dealing or privity of contract between the petitioner and the respondent-company, then, that defence cannot be brushed aside as suggested by the learned counsel appearing for the petitioner. There is a bonafide defence to the claim of the petitioner. Even if the petitioner were to demonstrate that all entities are common and that merely some application form was filled in by a partnership firm, that does not absolve the respondent-company as the dues of the partnership firm were guaranteed by the respondent- company, then, all these are matters on which the petitioner will have to lead oral and documentary evidence. Surely, in the light of these serious disputes and defences raised which cannot be brushed aside, a petition for winding up is not the remedy of the petitioner. For all these reasons, this petition fails and it is dismissed but without any order as to costs. (S.C.DHARMADHIKARI, J)