JAYANT NATH, J
1. This petition is filed under section 433(e) and 433(f) readwith section 434 & 439 (1) (b) of the Companies Act, 1956 seeking to wind up the
respondent company. Some of the basic facts are that the respondent company entered into contract with one Elekta Instrument AB, for purchase
of Leksell Gamma Knife Perfexion. Having executed the Contract the respondent is said to have approached the petitioner at its Copenhagen
Branch to avail a credit facility to finance 85% of the export value. On 20, 24, and 26 November 2008 the respondent company executed a Tripartite
agreement with the petitioner company and one VA Tech Finance (Ireland) Ltd. Thereupon the petitioner company agreed to finance 85% of the
contract value of the equipment amounting to Rs.3,400,000 Euros. The financial facility was to be repaid in 10 equal consecutive semi-annual
instalments. On 19.12.2008 after delivery of equipments the respondent executed a Deed of Hypothecation in favour of the petitioner. Mr.
H.P.CHawla, the Director of the respondent company also executed a Deed of Personal Guarantee dated 8.1.2009 in favour of the petitioner.
2. The respondent company failed to pay its debt. Hence, subsequently an amendment agreement was also executed on 27.07.2011 re-scheduling the
instalments. The respondent company failed to abide by the rescheduled debt and has also failed to make repayment. The last payment of USD
37,470 has been made by the respondent company on 26.7.2013. On 7.3.2014 the petitioner issued a termination notice recalling the financial facility.
On 9.5.2014Â a notice under section 434 of the Companies Act, 1956 was issued. In the notice it was pleaded that a sum of 1,929,155 Euros
equivalent to Rs.156,261,555 remain unpaid as on 23.07.2014. Hence, the present petition.Â
3. The respondents have filed their reply. In their reply the only major submission is that there is an arbitration agreement between the parties and
further the laws of Sweden would apply. Based on this, it is pleaded that the present winding up petition does not lie.
4. I may only note that several adjournments were earlier given to the respondent who sought adjournment to submit that the respondent was trying to
settle the matter with the petitioner. At one stage it was also pleaded that a leading hospital in Noida had approached the respondent for outright sale
of its assets and that the respondent would soon be in a position to clear its dues. However, nothing could fructify.
5. I have heard learned counsel for the parties. Learned counsel for the petitioner has reiterated the submissions made in the petition. He has in
addition relied upon on the balance sheet of the respondent company as on 31.3.2015 where it is admitted that a sum of Rs.16,11,95,199/- is payable to
the petitioner company. Reliance is also placed on a communication dated 22.1.2015 where the respondent has sought a one time settlement of the
entire loan and has made an offer to pay Rs.7 crores as one time settlement.
6. Learned counsel appearing for the respondent has pleaded as follows:-
(i) He submits that pursuant to the terms of the agreement between the parties the respondent had taken out an insurance against commercial and
political default of the loan. He pleads that the respondent has duly paid the instalments for the said insurance. However, he further states that the
petitioner has given no information as to whether they have recovered money from the respondent company and how much. Hence, he submits that
there is bona fide dispute regarding the dues of the respondent.
(ii) He further submits that there is an arbitration clause between the parties. Clause 12 of the Agreement provides that the agreement is to be
governed by the laws of Sweden. Further the disputes between the parties is to be adjudicated by arbitration in accordance with the arbitration rules
of the Arbitration Institute of the Stockholm Chamber of Commerce. Hence, it is pleaded that this court may adjudicate the present winding up petition
and refer the parties to arbitration. Reliance is placed on the judgment of the Full Bench of this court in HDFC Bank Ltd. vs. Satpal Singh Bakshi, 193
(2012) DLT 203Â
(iii) It is further pleaded that as the law of Sweden is to apply to the facts of the case the petitioner cannot claim any debt due. It is possible it is
pleaded that under the laws of Sweden the claim may be barred by limitation or there will be any other impediment for the petitioner to claim the dues.
7. In my opinion, the pleas raised by learned counsel for the petitioner are completely misplaced. As far as the first plea is concerned regarding the
insurance it is a matter of fact as pointed out by learned counsel for the petitioner that this plea has not been raised in the reply that is filed by the
respondent. In the absence of an averment to that effect in the reply the petitioner was not able to explain as to whether any payment has been
received from the insurance company or not. That apart, in my opinion, these are facts which should be well within the knowledge of the respondent.
The respondent cannot come up with these pleas at the time of arguments without even having pleaded for the same.Â
8. Reference in this context may also be had to the judgment of the Gujarat High Court in PVD Plast Mould Industries Ltd. vs. ING BHF Bank
Aktiengesellschaft, (2008) 144 CompCas 495 (Guj) where the court has held as follows:-Â
6.....The petitioner cannot say that once the Insurance Company has paid the money to the principal creditor, then the appellant company is not
answerable to anybody. The appellant company is still liable and applying the principle of subrogation, the Insurance Company can always recover the
money from the appellant and in any case, if the money is received by the creditor company then, to the extent of the receipts, the creditor company
would refund the money to the Insurance Company. That would be a matter between the Insurance Company and the creditor company. The debtor
is not entitled to take any benefits out of the said transaction.â€
9. Hence, even for a moment if I assume that the petitioner were to recover some money, the petitioner would be obliged to return the money to the
insurance company. Hence, even otherwise there is no merit in the said plea raised by the petitioner.
10. As far as the issue of arbitration is concerned the matter is squarely covered by the judgment of the Supreme Court in Booz Allen and Hamilton
INC vs. SBI Home Finance Ltd. and Others, (2011) 5 SCC 532 where the Supreme Court held as follows:-
“36. The well recognized examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of
criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters;
(iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi)
eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are
conferred jurisdiction to grant eviction or decide the disputes.
......
42. The distinction between disputes which are capable of being decided by arbitration, and those which are not, is brought out in three decisions of
this Court. In Haryana Telecom Limited v. Sterlite Industries India Ltd. MANU/SC/0401/1999 : 1999 (5) SCC 688, this Court held:
4. Sub-section (1) of Section 8 provides that the judicial authority before whom an action is brought in a matter, will refer the parties to arbitration the
said matter in accordance with the arbitration agreement. This, however, postulates, in our opinion, that what can be referred to the arbitrator is only
that dispute or matter which the arbitrator is competent or empowered to decide.
5. The claim in a petition for winding up is not for money. The petition filed under the Companies Act would be to the effect, in a matter like this, that
the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under
the Companies Act and is conferred on the court. An arbitrator, notwithstanding any agreement between the parties, would have no jurisdiction to
order winding up of a company. The matter which is pending before the High Court in which the application was filed by the petition herein was
relating to winding up of the Company. That could obviously not be referred to arbitration and, therefore, the High Court, in our opinion was right in
rejecting the application.
(Emphasis supplied)â€
11. Hence, a dispute relating to insolvency and winding up orders have been held to be non arbitrable disputes. Any proceedings that are filed for the
said purpose cannot be subject matter of any application under section 45 of the Arbitration act and cannot said to be not maintainable. This is so as
an arbitrator is incapable of granting a relief to a party under section 433 and 434 of the Companies Act.Â
12. Reference may also be had to the judgment of Full Bench of this court relied upon by the respondent in the case of HDFC Bank Ltd. vs. Satpal
Singh Bakshi (supra). In that case also the Court has relied upon judgment of the Supreme Court in Booz Allen and Hamilton INC vs. SBI Home
Finance Limited and Others (supra). The court took the stand that disputes which relate to right in personam are arbitrable and choice is given to the
parties to choose the alternate forum. However, those relating to rights in rem are not arbitrable and the parties‟ choice to chose forum of arbitration
is ousted. This court in HDFC Bank Ltd. vs. Satpal Singh Bakhsi (supra) held as follows:-
“13. What is discernible from the above is that all disputes relating to „right in personam‟ are arbitrable and choice is given to the parties to
choose this alternate forum. On the other hand, those relating to „right in rem‟ having inherent public interest are not arbitrable and the parties‟
choice to choose forum of arbitration is ousted. Examined in this line, it is obvious that a claim of money by the bank or financial institution against the
borrower cannot be treated as „right in rem‟. Each claim involves adjudication whether, on the facts of that case, money is payable by the borrower
to the bank/financial institution and if so to what extent. Each case is the decision on the facts of that case with no general ramifications. A
judgment/decision of the Debt Recovery Tribunal deciding a particular claim can never be „right in rem‟ and is a „right in personam‟ as it
decides the individual case/claim before it with no elements of any public interest.â€
13. Hence, the above judgment does not help the respondent in any manner. On the contrary, it categorically states that where the issue relates to
right in rem the same are not arbitrable. Hence, there is no merit in the said plea of the respondent regarding the existence of an arbitration clause as
it cannot oust the jurisdiction of this court to adjudicate the winding up petition.
14. The next plea of the respondent is that the laws of Sweden applies and it is possible that the claim may not be maintainable under the laws of
Sweden. This plea is vague and bereft of any details. Merely stating that it is possible that under the law of Sweden this claim of the petitioner may be
barred by limitation or there may be any other impediments in the case of the petitioner to recover this amount, is a vague plea, which cannot be
permitted to be raised whatsoever. The respondent has not been able to point out as to under which applicable law of Sweden, the claims of the
petitioner are not maintainable. In my opinion, there is no merit in the contention raised by the petitioner. The plea lacks bona fide and cannot be
accepted.
15. Accordingly, the petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to
take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the
newspapers ‘Statesman’ (English) and ‘Veer Arjun’ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of
hearing. The cost of publication is to be borne by the petitioner who shall deposit a sum Rs.75,000/- with the Official Liquidator within 2 weeks,
subject to any further amounts that may be called for by the liquidator for this purpose, if required. The Official Liquidator shall also endeavour to
prepare a complete inventory of all the assets of the respondent-company when the same are taken over; and the premises in which they are kept
shall be sealed by him. At the same time, he may also seek the assistance of a valuer to value all assets to facilitate the process of winding up. It will
also be open to the Official Liquidator to seek police help in the discharge of his duties, if he considers it appropriate to do so. The Official Liquidator
to take all further steps that may be necessary in this regard to protect the premises and assets of the respondent-company.Â
16. List on 30.10.2018. Â
