I.P. Mukerji, J.

C.P. No. 60 of 2010

1. This winding up application is at the instance of ICICI Bank Limited. The cause of action arises from substantial sums of money lent and advanced by the petitioning creditor to the Company from 2002.

2. On the date of the statutory notice dated 30-1-2010 there was allegedly due and owing by the Company to the petitioning creditor a sum of about Rs. 16.68 crores. No reply was made by the Company to the statutory notice. As on date the sum due and payable by the Company to the petitioning creditor is stated to be more than Rs. 17 crores.

C.P. No. 383 of 2009

3. The petitioner in C.P. No. 383 of 2009 is M/s. G.S. Atwal & Co. (Engineers) P. Ltd. It is said that on or about 14-1-2007, the petitioning creditor advanced Rs. 50 lakhs to the company as Short Term Inter Corporate Deposit. On 19-11-2007, the petitioner advanced a further sum of Rs. 25 lakhs on the same terms. In repayment of the above debt, the company handed over to the petitioning creditor several cheques mentioned in paragraph 7 of the petition. All these cheques were dishonoured for insufficiency of funds. Further cheques for Rs. 75 lakhs were handed over by the company to the petitioner.

4. Thereafter some part payment was made by the company. There is due and payable by the company to the petitioning creditor a sum of Rs. 60 lakhs as on the date, as represented by their learned counsel. Defence

5. In its defence the Company says that in January, 2008 Avian Flu broke out in West Bengal. My attention was drawn to the letter dated 29-2-2008 from the office of the Deputy Director, Animal Resources Development and Parishad Officer, Birbhum, Suri to the Company. It was stated that live poultry and poultry products like eggs, meat were entering the infected district of Birbhum. The Company was asked not to send its product to that district.

6. My attention is also drawn by the learned Counsel for the Company to a letter dated 22-1-2010 from the Joint Secretary, Government of India, Ministry of Agriculture to the Commissioner and Secretary (A.H. & Vety.), Government of Assam. It noted the prevalence of Avian Influenza in West Bengal and the prohibition imposed on movement of poultry and poultry products in specified areas of the State. However, it stated that it was not necessary to ban entry of poultry into Assam from West Bengal. It is also true that the learned Counsel for the Company drew my attention to the sharp fall in the gross sale of poultry and poultry products in January, February and March 2008 compared with October, November, December 2007.

7. I was also shown by him a Memorandum of Understanding executed on 12-5-2008 between the petitioning creditor and the Company where some payment terms were agreed upon. Clause 10 of that agreement stated that performance of the Memorandum of Understanding was subject to "any Act of the Government on movement or ban of poultry products". It was said by relying on this clause in the Memorandum of Understanding that I should relieve the Company from winding up. These documents were relied upon from the application of the Company. (C.A. No. 763 of 2010) Proceedings & Orders

8. Before proceeding further let me now note some orders passed by this Court.

9. On 23-3-2010 in an application for appointment of Provisional Liquidator (C.A. No. 194 of 2010) connected with this winding up application a cheque for Rs. 20 lakhs was sought to be made over by the Company to the petitioning creditor in Court. The cheque was dated 3-4-2010. In that view of the matter the Court passed an order of injunction restraining the Company from dealing with its assets. Directions for filing affidavits were made in the winding up application as well as in the application for appointment of provisional liquidator. No affidavits were filed. On 7-7-2010 both the applications appeared before me. They were heard in part and directed to appear on 12-7-2010. On 14-7-2010, the Company appeared and asked for extension of time to file an Affidavit-in-Opposition. But, by an order made on that day the Official Liquidator was appointed as Provisional Liquidator to take symbolic possession of the assets of the Company without interfering with its business. The Company was restrained from making alienation of its fixed assets and was directed to furnish written statements of account to the Official Liquidator with a copy to the petitioning creditor. On 28-7-2010, I passed a further order confirming the order made on 14th July, 2010. I also passed an additional order in terms of prayers (b) and (c) of the Judges Summons in the application for appointment of Provisional Liquidator. The Provisional Liquidator was directed to take possession of all the books, assets and properties of the Company and the Company was to do business under the Provisional Liquidator. The application for appointment of Provisional Liquidator (C.A. No. 194 of 2010) was allowed. By the same order the winding up application was admitted and to be advertised once in "The Telegraph" and once in "Anandabazar Patrika." I am told that such advertisement has been duly made.

10. On 24-11-2010, an application (C.A. No. 763 of 2010) was moved on behalf of the Company. In that application I directed status quo regarding the running of the business to be maintained till 2-12-2010. By my order dated 12-1-2011, I directed all winding up applications which included a second one (C.P. No. 383 of 2009) to be listed and directed affidavits to be filed in all matters, namely, C.P. No. 60 of 2010, C.P. No. 383 of 2009, C.A. No. 763 of 2010 and C.A. No. 194 of 2010.

11. I note that C.A. No. 194 of 2010 had been disposed of earlier and directions ought not to have been passed in that application. But no one pointed this out. Time was extended to file Affidavit-in-Opposition by my order dated 14-3-2011. Further extension of time was made by the order dated 5-4-2011.

12. On 13-6-2011, it was noted that the winding up applications were coming up for final orders. None appeared for the Company. In those circumstances the applications were directed to appear with the warning "last chance" on 20-6-2011. Once again passing of an order was deferred on 21-6-2011, on a fervent prayer made on behalf of the learned Counsel for the Company. Yet, once again on 29-6-2011, the learned Counsel for the Company persuaded the Court to defer passing orders. On 30-6-2011, the Company brought to Court a cheque for Rs. 30,00,000 for payment of the petitioning creditor in C.P. No. 60 of 2010 and Rs. 6,00,000 for similar payment in C.P. No. 383 of 2009 as recorded in an order. Both were directed by the Court to be handed over to the respective petitioning creditors without prejudice. Further, Rs. 30,00,000 by cheque was brought to Court by the Company on 4-7-2011 for the petitioning creditor in C.P. No. 60 of 2010 and Rs. 4,00,000 for the petitioning creditor in C.P. No. 383 of 2009 which was also recorded in an order.

13. At the request of the learned Counsel for the Company the applications were adjourned to enable the Company to bring more amounts to satisfy the petitioning creditors. When the petitioning creditor was unable to bring further amounts the amount already paid by the petitioning creditors were permitted to be returned. Discussion

14. I am not at all satisfied with the contention made on behalf of the Company with regard to clause 10. In my opinion, clause 10 has no meaning whatsoever. In case of any Governmental action the agreement would stand terminated or performance would be suspended. It does not say that the petitioning creditor would not recall the loan thereafter. In fact, the statutory notice was issued much later on 30-1-2010. Therefore, the Company, in my opinion, cannot take any shelter behind the Memorandum of Understanding dated 12-5-2008.

15. It is true that avian flu which is commonly known as bird flu had broken out in a part of West Bengal, affecting the business of the company. I have every reason to believe the statement of sales of the company that sales had significantly dropped in the first quarter of 2007 compared to the last quarter of 2008 and continued to be lower than average in the subsequent months.

16. But, that does not absolve a company of its debts.

17. I have found no defence whatsoever of the company to the claim of Rs. 16.68 crores of the petitioning creditor in C.P. No. 60 of 2010 as on 29-1-2010. This claim has been mentioned in the statutory notice dated 30-1-2010. In the statutory notice as well as in the winding up petition I do not find any further claim after 29-1-2010. This winding up application was filed on 11-3-2010.

18. I hold on consideration of the identical defence disclosed by the company that the company has no defence to the claim of the petitioning creditor whatsoever in C.P. 383 of 2009.

19. Therefore, on consideration of the case of the petitioning creditor in C.P. No. 60 of 2010, I hold in a summary manner that the company is indebted to the petitioning creditor of a sum of Rs. 16.68 crores as on 29-1-2010.

20. On consideration of the case of the petitioning creditor in C.P. No. 383 of 2009 I hold that the company is indebted to the petitioning creditor for a sum of Rs. 60 lakhs as on date. There is no adjudication regarding interest after 29-1-2010 in the case of C.P. No. 60 of 2010 and interest post passing of this order in the case of C.P. No. 383 of 2009.

21. This application has come up for consideration, after due advertisement and directions for filing of affidavits. Hence, in respect of each of the winding up applications C.P. No. 60 of 2010 and C.P. No. 383 of 2009, I pass an order of winding up of the company, I direct the Official Liquidator to forthwith take physical possession of all the assets and other properties of the company.

22. However, since winding up is a very serious consequence for a company, I direct the Official Liquidator not to take possession in terms of this order for a period of two weeks from date, to enable the respondent company to approach the Honble appeal court if they are so advised. C.P. No. 60 of 2010 and C.P. No. 383 of 2009 are allowed. C.A. No. 763 of 2010 is dismissed. It is noted that C.A. No. 194 of 2010 was disposed of earlier and need not be disposed of all over again.