@JUDGMENTTAG-ORDER
A.S. Pachhapure
1. The main petition is filed by M/s. Agni Aviation Consultants, a registered partnership firm (hereinafter railed as ''the Firm'') having its business at the address shown in the causetitle and is represented by its Partner Wg. Cdr, K.T. Sebastian (Retd.) u/s 433 (e), (f) and Section 434 of the Companies Act:. 1956 against M/s. Agni Aero Sports Adventure Academy Private Limited, (hereinafter called as ''the Company'') incorporated under the provisions of the Companies Act. 1956 represented by its Director Capt. Arvind Sharma.
2. The Company was incorporated on 8.8.1994 and was engaged in the business of promoting aero sport activities, hotels and restaurants, travelling and tourism and it has amended its Memorandum of Articles on 16.12.2009 to include the business of manufacturing and servicing of aircrafts, hover crafts or other crafts of all types and it also takes up Cloud Seeding, Weather Modification and Atmospheric Projects. II has registered office at Koramangala and presently, it is situated in the place mentioned in the cause title.
3. The authorized, share capital of the Company is Rs. 10,000,000/- (Rs. One Crore only) divided into 1,00,000 (One Lakh) equity shares of Rs. 100/ each. The amount of capital subscribed and paid up is Rs. 1,00,000/- (Rs. One Lakh only) divided into 1000 (One Thousand) equity shares of Rs. 100/- each.
4. The main objects of the Company, as set out in the Memorandum of Association are to establish, manage, own and do the business of sports complex managers, aero-sports, golf, aqua sports and other outdoor and indoor games including establishment and run and maintain amusement parks and health clubs and baths, gymnasium and yoga centers, etc. to establish, run maintain, own hotels, restaurants. Highway Hotels, Holiday resorts and also promoting tourism and travel agency and by an amendment to its Memorandum of Articles on 16-12-2009, it also included many other activities in the nature of Cloud Seeding, Weather Modification Projects. Atmospheric Research Projects, Climate and Environment Projects, to purchase, take on lease, hire, take licenses, sell of let out the Aerodromes. Landing Grounds. Airports. Helipads. Servicing and Maintaining Aircrafts, etc.
5. The Company has only two Promoters/Directors i.e., Capt. Arvind Sharma who is also a Partner of the Firm and his wife Mrs. Sapna Sharma.
6. The Firm is registered under the provisions of the Indian Partnership Act. 1932 under the deed of partnership dated 22.7.2003 registered with the Registrar of Firms. The said Firm has only two Partners, one Wg. Cdr. K.T. Sebastian (Retd.) who is now representing the petitioner in the proceedings and the other is Capt. Arvind Sharma one of the Promoters/Directors of the Company as well.
7. The Company was said to be in severe financial problems in the year 2002-03 cine to contractual obligations and had failed to fulfil with its customers the contractual obligations and was unable to fully recover from its financial losses. At this point of time. Capt. Arvind Sharma, Partner of the Firm and Director of the Company requested the Firm to advance monetary aid to the Company, to help the Company tide through its prolong period of financial loss, with the assurance that all advances would be returned to the Petitioner Firm. Hence, the Petitioner Firm began to advance substantial sums to the Company lot about six years as and when required by the Company through account payee cheques drawn either in favour of the Company or in favour of its employees, towards the payment of their monthly salaries, at the request of the Company. So as on 24.4.2008, the Company was due for a sum of Rs.24,75,128/- (Rupees Twenty Four Lakhs Seventy Five Thousand One Hundred and Twenty Eight only) to the Firm.
8. The fact that the Company was indebted to the Firm to the tune of Rs.24,75,128/- is said to have been mentioned in the statement of accounts of the Company and the latest balance sheet of the Company for the year 2009 010 reflects the dues payable to the Firm. The Firm bas produced a copy of the Balance Sheet of the Company for the year 2009-10 filed before the Registrar of Companies.
9. It is averred that the Firm requested the Company to repay the dues orally, as well as through an e-mail dated 22.12.2009, but the Company failed to reply the request and therefore, the Firm claims that the Company is unable to pay its debts. The Firm issued the statutory notice of payment signed and dated 11.1.2010 and 28.1.2010 u/s 434(1)(a) of the Companies Act, calling upon the Company to pay the aforesaid cues with interest at 18% p.a. from 26.3.2008 till the date of the repayment, within 21 days from the date of receipt of the notice. Though the notice is said to have been served upon the Company, it neglected to comply the demand made in the notice.
10. The Firm claims that the Company admitted its liability and has failed to pay its debts and therefore, a petition is filed under the aforesaid provisions for winding up.
11. It is further averred that the Company has defaulted in the fulfillment, of several contractual obligations with the Government organizations such as National Cadet Corps (NCC) and that the NCC has cancelled its order for 23 out of the 70 Microlite Aircrafts that the Company was to manufacture and supply. It is also averred that the transactions entered into with the NCC. on the face of it, appears to be illegal and that the Company has made false representations to the NCC to award the contract for the manufacture and supply of Microlite Air crafts and that the NCC has initiated arbitration proceedings for the breach of contractual obligations and other consequential reliefs for payment of damages.
12. As averred by the Firm, the Company is running under the loss and that it is nothing more than a family business of Capt. Arvind Sharma and his wife as the Promoter and Director of the Company and it is the personal business of Capt. Arvind Sharma. It is under these circumstances that the Firm represented by the aforesaid partner sought for an equitable order to wind up the Company under the provisions of the Companies Act. 1956.
13. The notice of this petition was issued to the Company which appeared before this Court and filed the objections statement. The Company contends that the Firm has been dissolved much earlier to the tiling of the petition and it has no locus standi to maintain a petition for winding up. So also, it contends that Wg. Cdr. K.T. Sebastian (Retd.) has no authority to represent the dissolved Firm. It has denied the averments made in paras 2 to 8 of the petition as false and also the allegation that the Company was in severe financial problems in the year 2002-03 and claims that the Firm came into existence in the year 2003-04 and therefore, the question of the Firm helping the Company in the year 2002-03 would never arise.
14. It contends that the Firm has been a client of the Company for over seven years utilising various services from the Company like leasing of aircraft, servicing and maintenance of the air craft, technical support, maintenance personnel etc. various transactions of monies have been entered into between the two entities. It denies that it was due for a sum of Rs.24,75,128/- to the Firm and contends that the Company never admitted the alleged debt, even in its reply notice to the petitioner.
15. It contends that the Balance Sheet referred to shows the situation that as on 31-03-2009 for the financial year ending 2008-09, the date on which the amount is being shown as due is 24-04-2008 and two years have elapsed from the said date and various other transactions have taken place in the following years which also are to be counted for to make final settlement of the accounts as on the date. It contends ''hat the amount is not a financial settlement figure and as there are hundreds of transactions between the Company and the Firm for the last seven years and there is a running account, the settlement of the accounts has to be done and as there is a commercial dispute between the parties, it is necessary to settle the accounts.
16. Further, the Company contends that it is in existence for the last 16 years having established itself well in various niche areas of aviation and it is solvent and capable of settling lawful debts, if any and in these circumstances, it sought for the dismissal of the petition.
17. It is thereafter that on 24.2.2011, this Court after hearing the counsel for the parties, passed an order admitting the petition holding that there is prima facie material to prove that the Company is due for a sum of Rs.24,75,128/- as shown in the Balance Sheet and at the request of the Company, this Court postponed the publication of the petition in the newspaper.
18. Meanwhile on 23-03-2011 Company Application No.294/2011 came to be filed by the Company requesting this Court to recall the order dated 24-02-2011 and to rehear the matter by providing an opportunity to the Company and in its application filed under Rule 9 read with Rule 96 of the Companies (Court) Rules. 1959 read with Section 433 (e) and (f) and Section 434 of the Companies Act. 1956, it is averred by the Company by reiterating the contentions raided in the objection statement to the main petition and it is further alleged that the petitioner Firm had a running account with the Company since its inception and was utilising the various services like the repairs, maintenance of the air crafts of the petitioner Firm and the Firm used to take on lease the air crafts for cloud seeding business and these air crafts used to be serviced by the Company and that the petitioner Firm thought it fit to take on lease one of the air crafts of the Company. It is further averred in the application that the Firm entered into a lease agreement in April 2007 to take on lease a Cessna 180 Aircraft bearing registration number VT-DUQ from ''he respondent Company initially for a period of one year with option to extend by another two years and that the air craft was modified by the lessee at its own costs and the lease charge for the first year was fixed at Rs. 16 lakhs and for the next two years at Rs.30 lakhs payable at the end of the lease period.
19. It is further averred that the Firm paid a Gum of Rs. 16 lakhs as lease charges to the Company on 31.3.2008 and an entry has been made in the accounts of the Company. The Company is said to have handed over the air crafts to the Firm in as is where condition to enable them to get the air craft suitably modified for the purpose of cloud seeding. Further, the Firm is said to have continued the research and development on the other aircrafts in order to make it: suitable for cloud seeding and it continued to possess the said craft till the end of the lease period and thereafter, handed it over to the Company and therefore, the Company claimed that the Firm itself is liable to pay the lease charges of Rs.30 lakhs as on 31.3.2010. So also, it is averred that the Firm has been dissolved by dissolution notice and Wg. Cdr. K.T. Sebastian (Retd.) is bent upon harassing the Company in as much as the other partner of the Firm was the director of the Company. It is also averred that the Company wrote a letter in response to the legal notice of the petitioner Firm asking them to reconcile the accounts to settle them. Without disclosing these facts Wg. Cdr. K.T. Sebastian (Retd.) has filed the Company petition with malafide intention. The Company also contends that the said reply was sent under certificate of posting and the copy has been produced with the application. So also, it contends that the Company is solvent, and has sufficient amount in its bank accounts and the copy of the bank account pass book has also been produced. It further contends that the non production of the reply letter by the respondent Company which was in response to the statutory notice is a bonafide mistake and is not intentional. In these circumstances, it has sought for recalling the order dated 24.2.2011.
20. The Firm has filed its objections reiterating the averments made in the main petition and denying the transaction regarding the lease of the air crafts and it also claims that the Company has created fictitious documents like the postal certificate, copy of the reply notice, copy of the reply letter, etc., and further contends that the Company is due to the tune of Rs.29,89,000/- to the Government Flying Training School, Jakkur and that the non production of the reply letter is not bonafide and it was not produced only because that no reply was given and subsequently, the documents have been created so as to make a show that the Company is solvent and that there is no debt payable. On these grounds, it has sought for the dismissal of the application.
21. Company Application 363/2011 has been filed by the Firm stating that as on 24.04.2008 the Company was due for a sum of Rs.24,75,128/- to the Firm and the balance sheet reflects the loan liability and when admittedly, the Company is indebted to the Firm, it is the duty to repay the same. In the application the Firm has reiterated all those grounds put forth by it in the main petition.
22. The Company has made a deposit of Rs.24,75,128/ on 29.04.2011 before this Court under RO 4039 and as the Company is liable to pay this amount, the Firm has sought permission to withdraw the said amount and to issue necessary directions to the Registry to release the said amount in favour of the Firm.
23. The Company reiterating its objections to the main petition and also the averments made in the application in C.A.No.294/2010 has further contended that the amount, was deposited before this Court to show the bonafides of the Company that it is solvent and the application filed by the Firm lacks bonafides and further, that the dissolved Firm cannot make a claim for payment and hence, it has sought for the rejection of the application seeking permission to withdraw the amount in deposit.
24. I have heard the learned counsel for both the parties. The points that arise for the consideration of this Court are:
(i) Whether it is proved that a sum of Rs.24.75.128/- is a crystallized debt where the Company is due for the said sum to the petitioner Firm ?
(ii) Whether CA 294/2011 filed by the Company deserves 10 be allowed ?
(iii) Whether the Firm has to be permitted to withdraw the amount of deposit of Rs.24,75,128/- made by the Company before this Court ?
25. It is an admitted fact that Capt. Arvind Sharma and Smt. Sapna Sharma are the only two Promoters Directors of the Company, whereas so far as the Firm is concerned, Wg. Cdr. K.T. Sebastian (Retd.) and Capt. Arvind Sharma the Director of the Company are the two partners of the petitioner Firm. The Memorandum of Association of the Company has been produced by the Finn alongwith its main petition at Annexure-A and it reveals the facts stated supra. At the same time. Annexure-B is the Deed of Partnership amongst the aforesaid partners.
26. Now, so far as the debt is concerned, the Firm has produced Annexure-D to the main petition, which is the Balance Sheet as on 31-03-2009 and the contents of this Balance Sheet are not disputed by the Company. In schedule ''C'' of this Balance Sheet, the Company has enumerated the unsecured loans and there is an entry for an amount of Rs.24,75,128/ as unsecured loan payable to M/s. Agni Aviation Consultants i.e., the petitioner Finn. Though this entry is not disputed by the Company, it is the contention on behalf of the Company that there are series of transactions between the Firm and Company, the accounts are not settled and the debt amount of Rs.24,75,128/- is not a crystallized debt and further, it claims that it is necessary for the parties to sit and reconcile the accounts to arrive at a final figure.
27. In para 8 of its objections to the main petition, the Company admits that a sum of Rs.24,75,128/ was due as per the entry dated 24.4.2008. But in para 6 of the objection statement, the Company contends that for over seven years, the Firm has taken various services from the respondent Company like leasing of air crafts, servicing and maintenance of air crafts, technical support, maintenance personnel etc., for the purpose of these transactions, various monies have been transacted between the two entities. But'' alongwith the objection statement, though it has produced numerous documents to prove that it is in affluent financial condition and that there are money transactions with the Company and others, but it has not produced any such documents to prove that there are serious of transactions between the Firm and the Company and the objections that have been raised are not specific, but are vague and general. It is relevant to note that the Firm issued a statutory notice of demand signed and dated 11.1.2010 and In para 12 of its petition, a specific contention was raised by the Firm calling upon the Company to pay the said dues of R.24,75,128/- with interest at 18% from 26.3.2008 till the payment was made. This notice was sent to the Company by Registered Post." Then: is a specific averment that the Company has failed and neglected to pay the said dues and to support its contentions, the office copy of the notice postal receipt and postal acknowledgment evidencing the service of notice on the Company at its registered office were produced as Annexures.
28. But the Company neither produced the notice nor any documents having sent the notice alongwith its objection statement, but in a single sentence took up a contention an under:
The respondent has never admitted the alleged debt and has infact, specifically denied the debt in its reply notice to the petitioner.
29. Nowhere in its objection statement, it gave the particulars as to whether the reply has been sent through an Advocate or by the Company itself, the date and as to whether it is sent by Registered Post or under Certificate of Posting. But surprisingly, after four months of tiling the objection statement alongwith an application to recall the order dated 24.2.2011, produced a copy of the Postal Certificate and the reply notice and except stating that it is the fault on the part of the Company no satisfactory explanation has been offered for non-production of the copy of the notice and postal certificate alongwith its objection statement, though the main petition was admitted, after hearing the counsel. So this conduct on the part of the Company raises a serious doubt as to the genuineness of these documents.
30. Generally, whenever a notice is received by a person sent through an advocate, the said notice will be replied through an advocate only. So also, when it is seat by registered post, normally, the reply will be sent by registered post. But as could be seen from the copy of the notice sent by the Company neither it is sent through an advocate nor by registered post. This conduct on the part of the Company is not a normal conduct. The counsel for the Firm relied upon the decision of the Apex Court reported in
A certificate of posting obtained by a sender is not comparable to a receipt for sending a communication by registered post. When a letter is sent by registered post, a receipt with serial number is issued and a record is maintained by the Post Office. But when a mere certificate of posting is sought, no record is maintained by the Post Office either about the receipt of the Setter or the certificate issued. The ease with which such certificates can he procured by affixing antedated seal with the connivance of any employee of the Post Office is a matter of concern. The Department of Posts may have to evolve some procedure whereby a record in regard to the issuance of certificates is regularly maintained showing a serial number date, sender''s name and addressee''s name to avoid misuse. In the absence of such a record, a certificate of posting may be of very little assistance, where the dispatch of such communications is disputed or denied.
31. in the context of the observations made above, if the aforesaid circumstances, like the non-mention of the particulars in the objection statement to the main petition and non-mention of the fact that as to whether the notice was sent either by registered post or under certificate of posting, the delay in producing the copy of notice and postal certificate and the other ancillary circumstances narrated, it cannot be said that the objections are bonafide, genuine and acceptable. There is no explanation by the Company as to why it did not adopt the mode of serving the notice by registered post or through a lawyer. So also, there is no reasonable explanation about the absence of particulars of the notice in the objection statement. The production of the copy of the notice and the certificate of posting, after about four months of the order dated 24-02-2011, would make it clear that the claim of The Company is malafide and unbelievable.
32. At the time of admission, the counsel for the Company was also present. The learned Senior Counsel for the Firm had taken up a contention that an amount of Rs.24,75,128/- is due from the Company and that a statutory-notice was issued on 11-01-2010 and 28-01-2010 by the Firm calling upon the Company to pay the dues and despite the service of notice, the respondent has not replied the same.
33. The learned counsel also relied upon the decision of this Court reported in (2009) 148 Comp Cas 751 (Karn) (Baywest Power and Energy P. Ltd. v. ZLPRO international Ltd. and another), wherein, this Court considering the fact that the Company was not able to pay its dues and though the statutory notice was issued, there was failure to pay the debts after the notice and in such circumstances, this Court held that an order for winding up cannot be set aside. The Company atleast after raising such a contention could have sought, time to produce the reply, the postal certificate and though the matter was reserved for orders on the admission, it did not take any care to produce the reply and also the postal certificate. This conduct on the part of the Company indicates that it was gaining time to create documents.
34. Now coming to the next content ion about the dues of the Firm to an extent of Rs.30 lakhs towards hired air craft the particulars regarding the dues of Rs. 16 lakhs at the initial stage and an entry made to that effect in the accounts on 31-03-2008, there was no specific contention in the objection statement to the main petition. Though an application was filed to recall the order in C.A.No.294/2011 on 23-03-2011, the entries with regard to the hired charges of Rs.30 lakhs in the accounts of the Company were not made available.
35. In Company Application No.863/2011, the Company has produced the Lease Agreement (Document No. 10) dated 01-04-2007 and as could be seen from this Lease Agreement, the signatories are Mrs. Sapna Sharma the Director of the Company and Capt. Arvind Sharma the husband of Mrs. Sapna Sharma, who has signed as the Partner of the Firm. The learned Senior Counsel for the Firm has argued that this document is fictitious and created for the purpose of avoiding payment of the dues. Though this Deed is said to have been executed on the 01-04-2007, it saw the light of the day in 2011 and the other partner Wg. Cdr. K.T. Sebastian (Retd.) has not joined as a signatory 10 this deed and no satisfactory reasons have been assigned by the Company in entering into a lease transaction of which the husband and wife are the only signatories, though if appears that the relation between Wg. Cdr. K.T. Sebastian (Retd.) and Capt. Arvind Sharma were cordial in the year 2007. To prove the genuineness of this document, except its production, no other material has been placed on record and therefore, it is to he held that the Lease Deed is unreliable and cannot be accepted for any purpose.
36. Further, the Company relies upon Document. No. 13, a Certificate of Deduction of Tax at Source u/s 203 of the Income Tax Act, wherein a sum of Rs.3,29,600/- is said to have been deducted at source and paid to the credit of the Central Government as per the details given in the certificate. This certificate pertains to the credits made in between 01-04-2007 and 31-03-2008. A perusal of this document does not reveal that it pertains to the lease amount of Rs. 16 lakhs and it may be that the deduction of tax at source pertains to different other transactions and it cannot be accepted that it pertains to the alleged lease amount of Rs.16 lakhs.
37. If once the lease agreement, the reply notice and the certificate of posting are excluded for the reasons stated supra, then the entry of Rs.16 lakhs in the balance sheet do not find any support as the relationship between Wg. Cdr. K.T. Sebastian (Retd.) and Capt. Arvind Sharma were strained and the possibility of making these hollow entries, so as to overcome the claim of the Firm cannot be overruled
38. Though the learned counsel for the respondent related upon the decision of the Apex Court reported in
39. In Company Application No.863/2011, the Company has produced the copy of the plaint in O.S.No.4514/2011 pending on the file of the City Civil Judge at Bangalore, the copy of the written statement filed by the Finn, the list of the documents and perusal of the averments in the plaint reveal an admission on the part of the Company that a sum of Rs.24,75,128/- was due to the Firm and deducting this amount from Rs.30 lakhs, which is said to be due from the Firm to the Company, in pursuance of the lease agreement dated 01-04-2007, it has instituted the suit against the Firm to grant a decree for a sum of Rs 5,24,872/- with interest at 18% p.a., From these averments, the Company admits the liability of Rs.24,75,128/- and for the reasons stated supra, so far as the liability of Rs.30 lakhs is concerned, the documents relied upon by the Firm, prima facie are fictitious and therefore, it cannot be said that there is bonafide dispute between the parties as to the liability. The Company though alleges that there are series of transactions between the parties, it has not referred to any other transaction other than the dues of Rs.24,75,128/- and Rs.30 lakhs. This would falsify the contention raised by the Company in its objection to the main petition. Further when the Company has approached the Court by instituting a suit to recover the dues, it can also make a claim for the remaining amount. Hence, the principles laid down by the Apex Court in the decision referred to supra do not apply to these facts. Therefore, it is to be held that the dues of Rs.24,75,128/- payable to the Firm is a crystallized form of debt and there is no impediment for this Court to pass appropriate orders for payment of this debt to the Firm. Further, so far as the authority of Wg.Cdr.K.T. Sebastian. (Retd.) to institute a suit representing its partnership Firm after its dissolution, it can be said that there is no rule of law which prevents an action being brought by any party from recovering any amount from any partner, even though it may have some connection with the partnership concerned.
40. Though the learned counsel for the respondent has placed reliance on the decision of the Apex Court reported in
41. Furthermore, the Firm has filed an application seeking permission to withdraw the amount in deposit. But while arguing the learned Senior counsel made a submission that this amount be transferred in the proceedings of arbitration, pending with the Arbitrator between the parties but the particulars of the proceedings have not been stated in the application filed. So, for the reasons stated supra. Point No.1 is held in affirmative, Point No.2 is held in negative and Point No.3 is held partly in affirmative and partly in negative and hence. I proceed to pass the following:
ORDER
C.A. No. 294/2011 is dismissed.
C.A. No. 863/2011 is partly allowed. The amount of Rs.24,75,128/- deposited in this Court be transferred to in the arbitration proceedings pending between the parties, the particulars of which shall be furnished by the petitioner firm by filing a Memo to that effect within a week from today.
COP 55/2010 is ordered to be closed.
