MAHESHWARY ISPAT LIMITED Vs. TATA CAPITAL FINANCIAL SERVICES LIMITED

LAWS(CAL)-2015-4-42

HIGH COURT OF CALCUTTA

Decided on April 17,2015

MAHESHWARY ISPAT LIMITED Appellant

VERSUS

TATA CAPITAL FINANCIAL SERVICES LIMITED Respondents

JUDGEMENT

- (1.) BACKDROP: Tata Capital Finance Limited filed a winding up petition against Maheswari Ispat Limited, the applicant above named, inter-alia praying for its winding up on the ground, Maheswari failed to repay the financial assistance to the extent of Rs.5 crore approximately. Maheswari partly secured the claim through pledge of a fixed deposit receipt for 75 lacs that the Tata encashed with the permission of Maheswari and recovered a sum of Rs.92.54 lacs. Taking into account such encashment and irregular repayments, a sum of Rs.2,27,57,975 became due and payable as would appear from the confirmation of accounts that Maheswari signed on July 14, 2011. The parties agreed, the borrower would pay interest at the rate of 15.5% per annum. Adding interest, a sum of Rs.4,12,98,703.81 became due and payable at the time of filing of the winding up petition. Tata also initiated proceedings under the Arbitration and Conciliation Act 1996 on the strength of the arbitration clause incorporated in the matrix contract. Maheswari contested the winding up proceeding that ultimately resulted in its admission. Being aggrieved, Maheswari preferred an appeal before the Division Bench. The Division Bench rejected the contention of Maheswari assailing the Order of admission, however, disposed of the appeal re-scheduling the repayment programme that would be as follows: i) Maheshwari would pay the dues of Tata as quantified and adjudicated by His Lordship by the order and judgment impugned by monthly installment of Rs.10 lacs per month for one year commencing from April 10, 2013 and thereafter on the 10th day of the succeeding month. ii) For the next financial year (April to March) Maheshwari would pay Rs.12.5 lakhs per month on the date fixed as above. iii) In the third financial year Maheshwari would pay Rs.15 lakhs per month until the entire dues are cleared off. iv) Upon payment of the aforesaid sums for three years in case any dues are still outstanding, that would be paid in four equal monthly installments payable on the date fixed as above. v) The payment of interest at the contractual rate would be at the yearly rest and be paid on the reducing claim. However, the frozen amount as on the date of the foregoing order would be taken as a principal sum and would be cleared off first and the subsequent interest component would be paid thereafter. vi) So long the installments are paid off the winding up petition would remain permanently stayed. In default of payment of anyone installment this order would stand recalled and the parties would be at liberty to proceed before the learned Company Judge. vii) Other creditors who already indicated their support as per the advertisement, would be at liberty to proceed with their independent proceedings as referred to above and this order would not preclude them to do so.
(2.) THE PRESENT LIS: Maheswari approached us by filing an application, inter-alia, praying for modification of the order of disposal. In effect, it was nothing but an application praying for mercy, inter-alia, asking for re-scheduling the payment terms. They would contend, they already paid a sum of Rs.1.95 crores leaving a balance sum of Rs.2,17,98,703. They wanted to clear it off in a phased manner, they wanted to pay Rs.5 lacs per month in six months and thereafter increasing the same with half-yearly interval of Rs.2.5 lacs and then Rs.10 lacs each for ten months, Rs.20 lacs and Rs.22,98,703 respectively in next two months. The respondent contested the application and filed affidavit that we heard on the above mentioned dates.
(3.) CONTENTIONS: Mr. Satarup Banerjee learned Counsel appearing for the applicant would contend, Maheswari was in financial difficulty. They did not have any intention to defraud the creditors, in fact, they were clearing the dues of other creditors as well by making payment of monthly installment. The present application was made only to gain some respite. This Court, in its discretion, should suitably modify the schedule so as to help Maheswari to clear off the dues. Per contra, Mr. Tilak Bose learned Senior Counsel would submit, once the appeal stood disposed of, the Division Bench would lose its competence and became functus officio hence, the present application would not be maintainable. To support his contention he would rely upon four decisions: 1. Chandra Nath & another Vs. Sahadabia Kumarin, 52 CalWN 440. 2. Piyaratana Unnanse and another Vs. Wahareke Sonuttara Unnanse and others, 54 CalWN 568. 3. Central Bank of India & Ors. Vs. Ashoke Kumar Bose, 1983 1 CalLJ 406. 4. Badri Prasad Vs. Bhartiya State Bank and others, 1993 76 CompCas 247.;

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