# Zaitek Polyblends Pvt. Ltd v. Sri Durga Bansal Fertilizer Ltd

- **Citation:** (2025) 5 ILRA 1805
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-05-22
- **Case number:** Company Petition No. 6 of 2012
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/zaitek-polyblends-pvt-ltd-v-sri-durga-bansal-fertilizer-ltd-53355
- **Pages:** 14

## Headnote

Shailendra Srivastava, Amal Rastogi, Anurag
Verma, Basant Agrawal, Devendra Mohan
Shukla, Nalini Jain, Pritish Kumar, Tushar
Hirwani

Civil
Law-The
Companies
Act,1956Sections 439(1)(b), 433(e) (f) & 434(1)(a)
- The Sick Industrial Companies (Special
Provisions) Act, 1985-Section 20(1)---
Petition
seeking
winding
up
of
the
respondent/Co. mainly on the ground that it has
failed
to pay the admitted
amounts
of
Rs.21,55,52,263/--- The petition lacking a
prayer for winding up of a Co. under Section
433(c) of the Act cannot be considered in view
of the lack of prayer--- The claim of the
petitioner/Co. based upon the 'assignment deed'
cannot be a foundation for seeking winding up--
- To appreciate a case for winding up of a Co.
on the ground that it is just and equitable, it is
essential for the Court to form a view that in
view of the status of the Co., if the Co. is not
wound up, the same would amount to a threat
to the commercial world and the existence of
the Co. is not desirable for the commercial
world. No such material exists to form a view
that the Co. if not wound up would be a threat
to the commercial world and/or can lead to
further defrauding of creditors, more so, when
1806 INDIAN LAW REPORTS ALLAHABAD SERIES
the respondent/Co. has categorically undertaken
to settle the dues of the Provident Fund within a
period of three weeks of the decision of the
present case along with any other due payable
to any other creditor.

Petition dismissed. (E-15)

## Text

_Characters 0–39,724 of 45,720. This is a partial read: ask again with offset=39724 for what follows._

5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1805
order explaining why the medical report
was
not
considered
while
taking
cognizance of the matter.

68. Neither the medical report issued
by the medical board has ever been
challenged, nor has the concerned Court
addressed the discrepancies between this
report and the response provided by the
investigating officer to the queries raised
by the applicant, who is the named
accused in the First Information Report.
Since
the
Magistrate
has
already
proceeded
with
the
matter,
while
summoning the applicant, it would have
been
appropriate
under
such
circumstances, to examine the merits of
the case. This should have been done
after a thorough consideration of the facts
and the applicable legal provisions. At
most, the Magistrate could have issued
summons to the applicant under Section
304 Part A of IPC. Even for that case of
very high degree of negligence is not
proved.

69. In view of the above discussions as
well as the observations made in the case of
Jacob Mathew (supra), the Charge Sheet
No.593
of
2023
and
cognizance/
summoning order dated 19.09.2023 as well
as the entire proceedings of Case No.7991
of 2023 (State vs. Dr. Neeraj Kumar),
arising out of Case Crime No.376 of 2023,
under Section 304 IPC, Police StationKhurja Nagar, District-Bulandshahar are
hereby quashed.

70. The present application under
Section
482
Cr.P.C.
is,
accordingly,
allowed. There shall be no order as to
costs.

71. A copy of this order be sent to the
lower court forthwith.
----------
(2025) 5 ILRA 1805
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 22.05.2025

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Company Petition No. 6 of 2012

Zaitek Polyblends Pvt. Ltd. ...Petitioner
Versus
Sri Durga Bansal Fertilizer Ltd.
 ...Respondent

Counsel for the Petitioner:
Amrendra Nath Tripathi, Rahul S. Sahay, Rajesh
Kumar Verma, Shobhit Mohan Shukla, Shraddha
Agarwal, Stuti Mittal

Counsel for the Respondent:
Shailendra Srivastava, Amal Rastogi, Anurag
Verma, Basant Agrawal, Devendra Mohan
Shukla, Nalini Jain, Pritish Kumar, Tushar
Hirwani

Civil
Law-The
Companies
Act,1956Sections 439(1)(b), 433(e) (f) & 434(1)(a)
- The Sick Industrial Companies (Special
Provisions) Act, 1985-Section 20(1)---
Petition
seeking
winding
up
of
the
respondent/Co. mainly on the ground that it has
failed
to pay the admitted
amounts
of
Rs.21,55,52,263/--- The petition lacking a
prayer for winding up of a Co. under Section
433(c) of the Act cannot be considered in view
of the lack of prayer--- The claim of the
petitioner/Co. based upon the 'assignment deed'
cannot be a foundation for seeking winding up--
- To appreciate a case for winding up of a Co.
on the ground that it is just and equitable, it is
essential for the Court to form a view that in
view of the status of the Co., if the Co. is not
wound up, the same would amount to a threat
to the commercial world and the existence of
the Co. is not desirable for the commercial
world. No such material exists to form a view
that the Co. if not wound up would be a threat
to the commercial world and/or can lead to
further defrauding of creditors, more so, when
1806 INDIAN LAW REPORTS ALLAHABAD SERIES
the respondent/Co. has categorically undertaken
to settle the dues of the Provident Fund within a
period of three weeks of the decision of the
present case along with any other due payable
to any other creditor.

Petition dismissed. (E-15)

(Delivered by Hon'ble Pankaj Bhatia, J.)

1. Heard Mrs. Shraddha Agarwal,
learned counsel assisted by Shri Shobhit
Mohan Shukla and Ms. Gursimran Kaur,
learned counsel for the petitioner; Shri.
N.K. Seth, learned Senior Advocate,
assisted by Shri Pritish Kumar, Shri
Tushar Hirwani, Shri Amal Rastogi,
learned counsel for the Respondent
No.1; Shri R.K. Verma, learned counsel
for the Respondent No.2 and Shri
Anurag Verma, learned counsel for
Official Liquidator.

2. Present petition has been filed
under Section 439(1)(b), Section 433(e) &
(f) and Section 434(1)(a) of the Companies
Act as well as under Section 20(1) of The
Sick
Industrial
Companies
(Special
Provisions)
Act,
1985
by
the
petitioner/company seeking winding up of
the respondent/company mainly on the
ground that it has failed to pay the admitted
amounts of Rs.21,55,52,263/- (Rupees
Twenty One Crore Fifty Five Lakhs Fifty
Two Thousand Two Hundred and Sixty
Three only) excluding the interest upon the
unsecured loan as detailed in Para 19(iii) of
the notice.

3. It is also stated that the Board for
Industrial and Financial Reconstruction (for
short 'BIFR') had recommended the winding
up of the company on 26.07.1996 and the
said order was affirmed by Appellate
Authority
for
Industrial
and
Financial
Reconstruction (for short 'AAIFR') and the
Hon'ble Delhi High Court. It is, thus,
proposed to be argued that the respondent/
company is unable to pay the debts. It is also
stated that the respondent/company and its
Directors and Officials are trying to dispose
the machinery etc., with a view to defraud its
creditors including the petitioner. Allegations
with regard to lack of probity in the
functioning of the respondent/company are
also stated.

4. It is also stated that authorized share
capital of the respondent/company was at
Rs.4,00,00,000/- (Rupees Four Crore only)
divided into 40,00,000/- equity shares of
Rs.10/- each and the issued, paid up and
subscribed capital as per balance sheet was
Rs.3,46,49,530/- (Rupees Three Crore Forty
Six Lakh Forty Nine Thousand Five Hundred
Thirty Only).

5.

It
is
pleaded
that
the
respondent/company was established mainly
for the manufacture and to deal with all kind
of fertilizers of organic and inorganic
chemicals in terms of the Memorandum and
Article of Association of the respondent/
company, which are contained in Annexures
- 1 & 2. It is being pleaded in Para 8 of the
writ petition that the respondent/ company
has not been functional and is lying close for
the last ten years.

6. It is stated and pleaded that the
respondent/company had availed financial
facilities from financial institutions namely
IDBI Bank, ICICI Bank & IFCI Ltd., and
took a loan to the tune of Rs.486 Lakh in
which the Directors of the Company had
given their unconditional and irrevocable
personal guarantees. It is further stated that
the said financial institutions sanctioned an
additional loan of Rs.63.30 Lakh- the
proportions are disclosed in Paras 9 & 10
of the petition.
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1807

7. It is stated that to secure the
outstanding
loan
from
the
financial
institutions, loan agreement was executed
on 10.09.1987 and 15.11.1989 and security
documents were also executed in favour of
the financial institutions and an equitable
mortgaged was also created in respect of
the
immovable
properties
of
the
respondent/company situate at District
Faizabad, U.P.

8.

It
is
pleaded
that
the
respondent/company had filed a reference
under the The Sick Industrial Companies
(Special Provisions) Act, 1985 (for short
'SICA Act') before the BIFR in the year
1994 vide Case No.33 of 1994. In the said
proceedings, BIFR had declared that all
rehabilitation efforts had failed and referred
the company for winding up under Section
20(1) of the SICA Act vide order dated
26.07.1996 (Annexure - 3). It is also stated
that the Registrar of the BIFR had complied
with the said order and had duly intimated
to the Registrar of this Court, however, no
action was taken thereupon.

9. It is further stated that against the
order dated 26.07.1996 of the BIFR, an
appeal was preferred before the AAIFR,
however, the appeal was subsequently
dismissed.
The
respondent/company
thereafter approached the Delhi High Court
in Writ Petition (Civil) No.968 of 1999,
however, the said writ petition was
dismissed on 07.03.2000 with adverse
remarks against the respondent/company
(Annexure - 5). It is stated that when the
respondent/company failed to liquidate its
dues taken from the financial institutions,
the financial institutions filed for recovery
before the Debts Recovery Tribunal - I,
Delhi vide O.A. No.201 of 1999 under the
Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (for short
'the DRT Act'). The said O.A. was decided
against
the
respondent/company
on
17.09.2004 and a recovery certificate was
issued for an amount of Rs.8,79,01,479/-
alongwith pendentelite and future interest
at the rate of 11% w.e.f. the date of filing of
the O.A. i.e. 24.03.1999 and cost was also
imposed. The DRT also provided that in
case the amounts are not paid, the same
shall be recoverable by auction/sale of
hypothecated
assets
and
mortgaged
properties and from the personal properties
of the defendants in the said original
application. Subsequently, the recovery
certificate issued by the DRT - I, Delhi was
transferred to DRT, Lucknow for execution
as their properties were situated at District
Faizabad which falls within the jurisdiction
of DRT, Lucknow.

10. It is stated that a deed of
assignment was executed on 07.11.2006 in
between the petitioner/company and the
IDBI Bank (one of the lender banks)
(known as the 'Deed of Assignment')
which was also got registered with the
Office of Sub-Registrar VII, New Delhi on
07.11.2006. In terms of the said assignment
deed, the portfolio of debt of the
respondent/company owed to IDBI Bank
was
transferred
in
favour
of
the
petitioner/company. It is also claimed that
the debts owed by the respondent/company
to the ICICI Bank and State Bank of India
were assigned in favour of the Kotak
Mahindra Bank Limited vide Deeds of
Assignment
dated
31.03.2005
and
16.01.2006. It is also pleaded that the
respondent/company borrowed money from
the petitioner/company in the form of
unsecured loan to clear the dues of Kotak
Mahindra Bank Limited and IFCI Limited
and from the said money, the dues were
cleared
by
the
respondent/company,
however, as part of the negotiations, the
1808 INDIAN LAW REPORTS ALLAHABAD SERIES
financial instruments were handed over to
the petitioner/company and admission to
that effect is also reflected in the
respondent/company's balance sheet as on
31.03.2010 in the form of inter-corporate
loans of Rs.96,80,632.67/- out of which
Rs.64,30,000/-
belongs
to
the
petitioner/company.

11. It is also stated that certain dues
were also assessed by the Assistant
Provident Fund Commissioner claiming a
dues
of
Rs.25,24,091/-
against
the
respondent/company.

12. It is stated that through a
communication
by
the
respondent/company, initially, a stand was
taken
that
the
company
has
been
recommended by the BIFR for winding up,
and subsequently another letter was written
stating that dues of all the lenders were
settled but the dues of IDBI Bank were
assigned to the petitioner/company with
which talks of settlement are going on.

13.

It
is
further
stated
that
subsequently out of the funds available
with
the
respondent/company,
the
management of the respondent/company
illegally
withdrew
an
amount
of
Rs.6,75,000/- and deposited an amount of
Rs.6,20,000/-
in
the
Provident
Fund
Account. It is claimed that thereafter the
respondent/company was trying to sell the
immovable assets of the company illegally
to the detriment of the petitioner/company.

14.

It
is
pleaded
that
the
respondent/company has accepted the debt by
showing a secured loan of Rs.2,24,30,000/-
and unsecured debt of Rs.64,30,000/-. It is
also pleaded that a charge was also created by
the respondent/company in favour of the
petitioner/company
for
an
amount
of
Rs.2,24,30,000/- and the same was also
registered with the Registrar of Companies
(for short 'ROC') under Section 125 of the
Act.

15. It is stated that despite requests and
reminders, the respondent/company did not
discharge
its
liability
towards
the
petitioner/company, as such, a notice of
winding up was sent on 10.10.2011 under
Section 433 and Section 434 of Companies
Act (for short 'the Act') calling upon the
respondent/company to pay an amount of
Rs.21,55,52,263/- (Rupees Twenty One Crore
Fifty Five Lakh Fifty Two Thousand Two
Hundred and Sixty Three Only) excluding the
interest
upon
the
unsecured
loan,
however, the said notices were returned
unserved from all the addresses including
the address of the registered office of the
company as well as the other known
addresses of the respondent/company
with the remark that 'no such person is
residing'. It is stated that although the
notices were returned unserved, the
petitioner took steps for publication of
the said notices in two local dailies i.e.
Hindi Dainik 'Aaj' and English Daily
'The Pioneer' - both published from
Lucknow on 08.12.2011 (Annexure - 16).

16. On the basis of the said pleadings, it
is stated that the respondent/company failed
to
liquidate
the
debts
owed
to
the
petitioner/company even despite the notice
and thus, it is liable to be wound up.

17. Respondent/company in its
counter affidavit has denied all the
allegations. The main defences taken are
that the petition is bad for nonimpleadment
of
the
Registrar
of
Companies;
the
petitioner
has
not
approached this Court with clean hands
and have concealed the material facts.
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1809

18. With regard to the claims of the
petitioner/company, it is stated that the case
of the petitioner/company is based upon
deed of assignment dated 07.11.2006,
which is illegal as the petitioner is neither a
'reconstruction company' as defined under
Section
2(1)(v)
nor
a
'securitization
company' as defined under Section 2(1)(za)
of Securitisation and Reconstruction of
Financial Assets and Enforcement of
Security Interest Act (for short 'the
SARFAESI
Act')
and
the
petitioner/company is not a Bank or a
Banking Company as defined under the
DRT Act and thus, the claim based upon
the assignment deed is a nullity.

19. It is further argued that the deed
of assignment was registered at Delhi,
whereas the properties are situated at
Faizabad, as such, no interest can be
claimed based upon the deed of assignment
being hit by Section 28 of the Registration
Act.

20. It is stated that the statutory notice
under Section 434 of the Act has never
been tendered or served at the registered
offices of the company, as such, the petition
under Section 434(1)(a) of the Act is not
maintainable. It is further argued that the
alleged claim of the petitioner/company is
barred by limitation. It is further objected
that the claim of the petitioner/company is
based upon the alleged dues of IDBI Bank
allegedly
assigned
to
the
petitioner/company
and
the
petitioner
cannot take recourse to winding up and has
avoided taking recourse of filing of a suit
for recovery in order to avoid payment of
Court fees and thus, it is liable to be
dismissed. It is further stated that no
admitted amount of the petitioner is due
upon the answering respondent. It is further
argued that the decree passed by the DRT
has
been
satisfied
in
the
recovery
proceedings and thus, the claim of the
petitioner is not maintainable.

21. It is further stated that the claim of
the petitioner for over Rs.21 Crore in lieu
of the OTS of Rs.44.60 Lakh in which the
petitioner has paid less than Rs.27 Lakh is
based upon fraud, misrepresentation and
thus, liable to be dismissed and the
amounts claimed are highly inflated.

22. It is further stated that the dues
claimed by the petitioner/company are
bonafidely
disputed
and
cannot
be
adjudicated in the winding up proceedings.
It is also denied that the net worth of the
respondent/company has eroded. It is
further stated that the winding up petition is
liable to be dismissed on the ground that
one Mr. Neeraj Tulsiyan and the petitioner
were, in fact, not the creditors of the
respondent/company, instead they were the
strategic investor who had undertaken to
settle the liabilities and thereafter, earn
profit
from
working
of
the
respondent/company proportionate to their
investments.

23. In the counter affidavit, the
financial
facilities
extended
to
the
respondent/company by the consortium of
financial institutions i.e. IDBI Bank, ICICI
Bank and IFCI Ltd., are admitted and the
availing of financial assistance from State
Bank of India is also admitted.

24. It is stated that in the year 1992,
the respondent/company was adversely
affected due to decontrol of Single Super
Phosphate
Fertilizers
(SSP)
by
the
Government and the farmers had started
shifting to nitrogen based fertilizers, which
adversely affected the financial health of
the company and thereafter, could not
1810 INDIAN LAW REPORTS ALLAHABAD SERIES
continue with the production despite
efforts. The fact with regard to the
respondent/company
approaching BIFR
and AAIFR are also admitted.

25. It is stated that after having failed
to get the company revived either in the
proceedings before the BIFR or AAIFR in
the year 2003, the respondent/company
received an offer for running the factory
from one M/s Khaitan Fertilizers Ltd. The
proposal
of
the
said
company
was
forwarded to ICICI Bank and the ICICI
Bank had initially accepted the offer as a
merchant banker, however, it is stated that
subsequently, M/s Khaitan Fertilizers Ltd.,
backed out of their offer.

26. It is stated that in the year 2005,
one Mr. Neeraj Tulsiyan, who was known
to the promoters of the company, entered
into
an
understanding
with
the
respondent/company and at his instance, a
Techno-Economic Viability Report was
also prepared and in pursuance thereof, Mr.
Neeraj Tulsiyan undertook to clear the
entire liability of the respondent/company
towards the banks, the financial institutions
and the other statutory authorities and
debtors, and he promised to pump in
requisite funds - although, no formal
Memorandum of Understanding (MOU)
was executed in between the parties, the
said statement is based upon the letter dated
13.11.2007 written by Mr. Neeraj Tulsiyan
to the respondent/company (Annexure -
CA 3).

27. It is stated that in pursuance to the
said understanding, the Board of Directors
of the respondent/company in its meeting
dated 02.08.2005 authorized M/s Neeraj
Tulsiyan and Associates to take steps to
settle
all
the
dues
with
the
respondent/company. It is stated that in
pursuance to the said authorisation, Mr.
Neeraj Tulsiyan and the Board of Directors
of the respondent/company entered into a
settlement of dues with IDBI Bank under
an
OTS
settlement
for
a
sum
of
Rs.54,66,920/- which was conveyed by the
IDBI Bank to Mr. Neeraj Tulsiyan on
19.12.2005. It is further stated that for
revival of the company and for settlement
of the dispute, out of the total amount of
OTS, a sum of Rs.15,00,000/- was
contributed by the respondent/company
through their family members while Mr.
Neeraj Tulsiyan contributed Rs.39,70,000/-.
It is stated that the OTS amounts were paid
on
26.11.2005
&
10.12.2005
and
subsequently, in the DRT proceedings on
account of the OTS settlement, DRC
proceedings were closed vide order dated
28.09.2007 (Annexure - CA 7). It is stated
that after settling the amount with IDBI
Bank, the dues of ICICI Bank which was
assigned to Kotak Mahindra Bank Limited
were taken up and were settled for an
amount of Rs.52 Lakhs in which M/s
Neeraj Tulsiyan and Associates contributed
Rs.42 Lakh and the promoters of the
respondent/company
contributed
Rs.10
Lakh. It is further stated that thereafter
steps were taken for settlement of the dues
of IFCI Ltd., in which the petitioner made a
contribution of Rs.22 Lakh and the
promoters
of
the
respondent/company
contributed Rs.28 Lakhs and settlement
was got done. It is stated that on
07.11.2006, the petitioner/company got
assignment
deed
by
misleading
the
respondent/company - according to the
respondent, the same was got executed
after 11 months of the OTS having been
finalized and the OTS amount having been
paid to IDBI Bank.

28. It is stated that the alleged
assignment deed was made on 07.11.2006
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1811
and the OTS proposal was accepted and
amounts paid in the year 2005, as such, the
IDBI Bank had no dues left on the
respondent/company and could not have
executed any deed of assignment of the
alleged
debt
in
respect
of
the
respondent/company.

29. It is also brought on record that
subsequently, M/s Neeraj Tulsiyan and
Associates did not take any interest in
pursuance
to
his
promise
and
the
respondent/company settled the dues with
State Bank of India.

30. It is also stated that despite
promise Mr. Neeraj Tulsiyan did not pay
the dues of the Provide Fund Department
and in fact, stole certain machinery worth
more than Rs.66 Lakh.

31. It is also stated that after the Delhi
and U.P. Stock Exchange became nonfunctional, the respondent/company exited
and thereafter, got the valuation re-done in
which the land and building and total assets
of the respondent/company were valued at
Rs.11,92,89,038/- and the net worth of the
respondent/company after excluding all the
liabilities was assessed at Rs.3,91,00,271/-.
It is further stated that in the year 2005, a
Techno-Economic Survey was done in
which the valuation of the plant was
assessed at Rs.22 Crores.

32. In Para 31 of the Counter Affidavit
it has been stated that the dues remaining
with the respondent/company are that of
Provident Fund Department (approximately
Rs.40 Lakh), Rajasthan State Mining and
Mineral Ltd. (approximately Rs.40 to 45
Lakh), and the amount of the petitioner,
which according to the respondents, are
disputed. It is also admitted that certain
demands towards electricity dues were
pending which have been settled. It is denied
that the company had lost its substratum.

33. It is also stated that the petitioner
had earlier served a notice under Section
13(2) of the SARFAESI Act on 23.02.2009
only with a view to grab the assets of the
respondent/company which was challenged
in Writ Petition No.8117 (M/B) of 2009 in
which an interim order was passed on
31.08.2009. The respondent/company has
also denied all the averments made in the
subsequent paragraphs specifically.

34. With regard to the proceedings
pending before BIFR and AAIFR, it is stated
that the company was in financial difficulty
and has subsequently undergone major
changes. With regard to the creation of the
charge in favour of the petitioner/company
and its registration with the ROC, it is stated
that the same was done at the instance of Mr.
Neeraj Tulsiyan in lieu of the promise made
by him for securing the amounts, however, he
had subsequently failed to honor his
commitments and after the discharge of the
debts, no charge was left in favour of the
IDBI Bank and thus, could not have been got
registered.

35. With regard to the amounts shown
in
the
balance
sheet
of
the
respondent/company, it is stated that in the
balance sheet from the year 2006 up to
31.03.2018, an unsecured loan of Rs.64.30/-
Lakh
is
being
shown
due
on
the
petitioner/company. It is stated that the charge
of Rs.2,24,30,000/- shown in the balance
sheet
of
the
respondent/company
was
erroneously shown as secured loan and the
said entry was subsequently revoked in the
Financial year 2018-19.

36. With regard to the balance sheet
of the petitioner/company it has been
1812 INDIAN LAW REPORTS ALLAHABAD SERIES
pleaded that the same does not reflect any
investment as on 31.03.2018 nor does it
give any detail about any secured loan
given to anybody, however, an unsecured
loan to the tune of Rs.119.80 Lakh
(considered
good)
given
by
the
petitioner/company is shown, thus, even as
per
its
own
balance
sheet,
the
petitioner/company
had
never
given
unsecured
loan
and
now
the
petitioner/company
cannot
claim
any
security/charge on the assets of the
respondent/company.

37. It is also stated that in its balance
sheet, the petitioner/company has shown
that no litigation is pending regarding the
petitioner/company.

38. It is specifically denied that any
notice dated 10.10.2011 was ever tendered
or given to the respondent/company and no
proof with regard to the service on the
registered address has been furnished. It is
further stated that the service of notice in
the newspapers does not fulfill the
requirement specified under Section 434 of
the Act and even otherwise the said two
newspapers do not have any circulation at
Faizabad as the newspapers were of
Lucknow.

39. It is also stated that the petition is
not maintainable under Section 433(e) of
the Act.

40. Specific assertion has been made
that the respondent/company is ready and
willing to pay the amount of Rs.64.30/-
Lakh to the petitioner/company and during
the course of the hearing as well as in an
affidavit filed, respondent/company have
admitted that they are ready and willing to
pay the amount of Rs.64.30/- Lakh to the
petitioner/company and to show their
bonafide, they had proposed to tender an
amount of Rs.1 Crore.

41. Shri N.K. Seth, learned Senior
Advocate, appearing for the respondent,
during the course of the hearing, had left it
open to the Court to fix any amount on the
respondent/company towards the amount of
Rs.64.30 Lakh and the respondents would
honor the same.

42. Following judgments have been
cited by both the parties:

From Petitioner's side:

To impress the scope of the
powers that can be exercised by the
Company Court:

(i) Credit Suisse AG v. SpiceJet
Limited; Company Petition No.363 of
2015, Dated 06.12.2021 which in turn has
reiterated the principles as were laid down
in the case of Madhusudan Gordhandas &
Co. v. Madhu Woollen Industries (P) Ltd.;
(1971) 3 SCC 632;

(ii) M/s Classic Diamonds (India)
Ltd. v. ICICI Bank Limited; 2016 SCC
OnLine Bom 15573;

To argue on the scope of contract
and its interpretation:

(i) Deccan Paper Mills Co. Ltd. v.
Regency Mahavir Properties & Ors.; Civil
Appeal No.5147 of 2016 decided on
19.08.2020;

(ii) B.O.I. v. Custodian and Ors.;
(1997) 10 SCC 488;

With regard to the bonafide
dispute and as to whether the dispute raised
is bonafide or not in a winding up petition:

(i) Steel Authority of India
Limited v. M/s Shiv Mahima Ispat Pvt.
Ltd.; 2016 SCC Online Raj 3842

(ii) M/s Shital Fibres Ltd. v.
Indian Acrylics Ltd.; Civil Appeal No.1105
of 2021, decided on 06.04.2021
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1813

With regard to the claim being
within limitation:

(i)
Asset
Reconstruction
Company (India) Ltd. v. Bishal Jaiswal and
Anr.; (2021) 6 SCC 366;

(ii) Bangur Foundation Ltd. v.
Esjey Corp.; 2003 SCC OnLine Cal 113;

(iii) Shahi Exports Pvt. Ltd. &
Anr. v. CMD Vuildtech Pvt. Ltd.; 2013
SCC OnLine Del 2535;

(iv) Bengal Silk Mills Co. v.
Ismail Golam Hossain Ariff; 1961 SCC
OnLine Cal 128

With regard to the effect of
recording in the balance sheet:

(i) Electron Industries Ltd. v.
Soham Polymers (P) Ltd.; (2005) 13 SCC
86

With regard to the manner in
which the notice is required to be served:

(i) Evergreen Plywood Industries
v. Circular Leasing and Resources P. Ltd.;
2004 SCC OnLine Cal 698;

(ii) Evergreen Plywood Industries
Ltd. v. Circular Leasing and Resources P.
Ltd.; 2004 SCC OnLine Cal 699;

(iii) V. Raja Kumari v. P.
Subbarama Naidu and Anr.; (2004) 8 SCC
774;

(iv) Deepak Machineries Pvt. Ltd.
v. Ispat Industries Ltd.; 2005 (2) Bom CR
94;

(v) Gradeur Collection v. Shahi
Fashions Pvt. Ltd.; ILR (2013) V Delhi
3644 Co. Pet.;

(vi) Shriram City Union Finance
Limited v. Super Rubber Engineering
Company Pvt. Ltd.; 2018 SCC OnLine
Bom 12483;

To
argue
that
the
respondent/company is a defunct company:

(i)
M/s
Allied
International
Products Ltd. v. Appellate Authority for
Industrial and Financial Reconstruction and
Ors.; 2000 SCC OnLine Del 993;

(ii)
Madhya
Pradesh
State
Industrial Development Corporation v. M.P.
Toll Roads Ltd.; 2018 SCC OnLine Bom
15301;

To
argue
that
the
respondent/company cannot approbate and
reprobate after taking the advantage of
agreement and subsequently resile from the
same:

(i) Shyam Telelink Ltd. Now
Sistema Shyam Teleservices Ltd. v. Union
of India; Civil Appeal No.7236 of 2003,
decided on 05.10.2020;

With regard to interpretation of
entries in the balance sheet:

(i) Padam Tea Co. Ltd. v.
Darjeeling Commercial Co. Ltd.; 1975
SCC OnLine Cal 140;

To argue that the application
under Section 340 is liable to tbe rejected:

(i) Amarsang Nathaji v. Hardik
Harshadbhi Patel and Ors.; (2017) 1 SCC
113.

From Respondent's side:

To argue that the petitioner is
neither a reconstruction company nor a
securitisation company:

(i) M/s Gorakhpur Steel Metals
Pvt. Ltd. v. The Presiding Officer, D.R.T. &
Ors.; 2017 (121) ALR 817;

(ii) M/s Gorakhpur Steel Metals
Pvt. Ltd. v. The Presiding Officer, D.R.T. &
Ors.; 2017 (125) ALR 115;

(iii)
Suzuki
Parasrampuria
Suitings
Private
Limited
v.
Official
Liquidator Mahendra Petrochemicals Ltd.
(In Liqn) and Ors.; 2015 SCC OnLine Guj
1017;

(iv)
Suzuki
Parasrampuria
Suitings
Private
Limited
v.
Official
Liquidator Mahendra Petrochemicals Ltd.
(In Liqn) and Ors.; (2019) 212 CompCas
480 (GUJ) : MANU/GJ/1812/2016;

To argue that the petition is
barred by limitation:
1814 INDIAN LAW REPORTS ALLAHABAD SERIES

(i) Gaurav Hargovindbhati Dave
v. Asset Reconstruction Company (India)
Ltd. & Anr.; 2020 SAR (Civ) 21;

(ii) Jignesh Shah and Anr. v.
Union of India and Anr.; AIR 2019 SC
4758;

(iii) Sampuran Singh and Ors. v.
Niranjan Kaur (Smt) and Ors.;(1999) 2
SCC 679;

(iv) Babulal Vardharji Gurjar v.
Veer Gurjar Aluminium Industries Private
Limited and Anr.; (2020) 15 SCC 1;

(v) Ram Prakash v. Deputy
Director of Consolidation and Ors.; 2022
SCC OnLine All 107;

(vi) Satrohan and Ors. v. The
Settlement Officer Consolidation Lko. and
Ors.; Writ - B No.357 of 2022 decided on
03.06.2022.

In respect of the submission that
the statutory notice under Section 434 has
not been received at the registered office of
the company:

(i)
Alliance
Credit
and
Investments Ltd. v. Khaitan Hostombe
Spinels Ltd.; 1996 SCC OnLine All 782;

(ii) State Black Sea Shipping
Company & Anr. v. Viraj Overseas Pvt.
Ltd.; 2003 SCC OnLIne Deli 597;

(iii)
Neeraj
Realtors
Private
Limited v. Janglu (Dead) Through Legal
Representative; (2018) 2 SCC 649;

(iv)
Corporate
Ispat
Alloys
Limited v. G.B. Transport (India) Pvt. Ltd.;
2015 CJ(Cal) 716;

(v)
N.L.
Mehtra
Cinema
Enterprises Pvt. Ltd. v. Parvinchandra P.
Mehta; 1989 SCC OnLine Bom 11;

To argue that liability is being
bonafidely
disputed
by
the
respondent/company
and
cannot
be
adjudicated in winding up petition:

(i) IBA Health (India) Private
Limited v. Infor-Drive Systems SDN.BHD;
(2010) 10 SCC 553;

(ii) Swaraj Infrastructure Pvt. Ltd.
v. Kotak Mahindra Bank Ltd.; (2019) 3
SCC 620:

(iii) Mediquip Systems (P) Ltd. v.
Proxima Medical System GMBH.; (2005) 7
SCC 42;

To impress that the petitioner has
not approached this Court with clean
hands:

(i) Kishore Samrite v. State of
Uttar Pradesh and Ors.; (2013) 2 SCC 398;

(ii) Jagdish Chandra & Ors. v.
Krishna Mohan Aggrawal & Ors.; Second
Appeal No.37 of 2020, decided on
06.02.2020.

To argue that the assignment deed
is void by virtue of Section 28 of the
Registration Act:

(i) Veena Textiles Limited v. The
Authorised Officer, IFCI Ltd.; 2014 (5)
CTC 209;

To
further
argue
that
the
preliminary
objections
including
the
maintainability of the petition should be
decided first:

(i) Manubhai J. Patel and Anr. v.
Bank of Baroda and Ors.; (2000) 10 SCC 253;

(ii) Union Bank of India & Ors. v.
Ranbir Singh Rathaur and Ors.; (2006) 11
SCC 696;

(iii)
T.K.
Lathika
v.
Seth
Karsandas Jamnadas; (1999) 6 SCC 632

To argue that the application
under Section 340 Cr.P.C. filed by the
respondent should be decided first:

(i) Pramod Kumar Singh v. State
of
U.P.
&
Anr.;Neutral
Citation
No.2024:AHC;96456;

(ii) Syed Nazim Husain v. The
Additional Principal Judge, Family Court
& Anr.; 2003 SCC OnLine All 2358

43. Supplementary counter affidavits
have also been filed at the instance of the
respondents.
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1815

44. It is also essential to notice that
the Provident Fund Department has also
joined the proceedings by filing a claim of
their dues, however, the other dues are not
disputed by the respondent/company who
have undertaken to clear the same.

45. In the present case, when the
petition was filed, this Court on its first
date of hearing i.e. 23.02.2012 had issued
notices and directed for publication in the
newspapers.
Subsequently,
during
the
pendency of the proceedings, orders came
to be passed appointing the Official
Liquidator and various orders were passed
to
the
Liquidator
regarding
taking
possession and thereafter, permitting the
removal of certain assets. It is also essential
to notice that on 30.03.2018, the petition
was dismissed for want of prosecution and
the Official Liquidator was discharged.
Subsequently, recall application was filed
and the order dated 30.03.2018 was
recalled vide order dated 20.04.2018. It
also bears from record that on 13.07.2018
with the consent of parties, the petition was
directed to be published in the newspapers
in accordance with Rule 24 of the
Companies
(Court)
Rules,
1959.
Application for recall of the order dated
13.07.2018 is also pending. It is also
relevant to notice that the application at the
instance of the respondent/company for
taking proceedings under Section 340 of
the Cr.P.C. are also pending. However,
considering the fact that I am proceeding to
decide the main winding up petition itself,
no useful purpose would be served in
passing separate orders on the applications.

46. Considering the submissions as
recorded above, present petition has been
filed under Section 433(e) & (f) read with
Section 434(1)(a) read with Section 439(1)(b)
of the Companies Act as well as under
Section 20(1) of The Sick Industrial
Companies (Special Provisions) Act, 1985.

Section 433(e) & (f) read with
Section 434(1)(a) read with Section 439(1)(b)
of the Companies Act read as under:

"433. Circumstances in which
company may be wound up by Tribunal.-A
company may be wound up by the
Tribunal,-

...

(e) if the company is unable to pay
its debts;

(f) if the Tribunal is of the opinion
that it is just and equitable that the company
should be wound up;

434. Company when deemed
unable to pay its debts.-(1) A company shall
be deemed to be unable to pay its debts-

(a) if a creditor, by assignment or
otherwise, to whom the company is indebted
in a sum exceeding one lakh rupees then due,
has served on the company, by causing it to
be delivered at its registered office, by
registered post or otherwise, a demand under
his hand requiring the company to pay the
sum so due and the company has for three
weeks thereafter neglected to pay the sum, or
to secure or compound for it to the
reasonable satisfaction of the creditor;

439. Provisions as to applications
for winding up.-(1) An application to the
Tribunal for the winding up of a company
shall be by petition presented, subject to the
provisions of this section-

...

(b) by any creditor or creditors,
including any contingent or prospective
creditor or creditors; or

Section
20(1)
of
The
Sick
Industrial Companies (Special Provisions)
Act, 1985 read as under:

"20.
Winding
up
of
sick
industrial company.-(1) Where the Board,
after making inquiry under Section 16 and
1816 INDIAN LAW REPORTS ALLAHABAD SERIES
after consideration of all the relevant facts
and circumstances and after giving an
opportunity of being heard to all concerned
parties, is of opinion that the sick industrial
company is not likely to make its net worth
exceed the accumulated losses within a
reasonable time while meeting all its
financial obligations and that the company
as a result thereof is not likely to become
viable in future and that it is just and
equitable that the company should be
wound up, it may record and forward its
opinion to the concerned High Court."

47. During the course of the
arguments, it was pointed out to the counsel
for the petitioner, who had extensively
argued, that the petition was not filed under
Section 433 (c) of the Act and a relief has
been sought on that count, to which learned
counsel for the petitioner Mrs. Shraddha
Agarwal had stated that it is within the
domain of the jurisdiction of this Court to
pass orders even if no specific pleading or
prayer to that effect is made. The said
contention cannot be accepted for the
simple reason that it is fairly well settled
that the strict rule of pleadings apply for
winding up in terms of the provisions of
Rule 6 and Rule 11 of the Companies
(Court) Rules, 1959, thus, the petition
lacking a prayer for winding up of a
company under Section 433(c) of the Act
cannot be considered in view of the lack of
prayer.

48. Considering the petition on the
ground as pleaded and prayed, the issue to
be considered by this Court is whether the
company is unable to pay its debts and
whether it is equitable that the company is
wound up ?

49. For making a case that the company
is unable to pay its debts, it is argued that in
terms of the mandate of Section 434(1)(a) of
the Act, it is clear that if the company is
indebted in a sum exceeding one lakh rupees
and a notice has been served, a clear case for
winding up of respondent/company is made
out. The said contention is based upon the
claim of the petitioner/company that they are
entitled to the amounts of loan as reflected in
the balance sheet of about Rs.64.30 Lakh and
the balance by virtue of them being an
assignee of debt by the IDBI Bank, which is
also permitted and reflected in the mandate of
Section 434(1)(a) of the Act.

50. Contradicting the said claim, the
respondent/company had admitted its liability
to pay the amount of Rs.64.30 Lakh, and as
recorded in the earlier part of the order, an
offer has been made and left upon the Court
to
fix
the
amount
which
the
respondent/company shall pay in respect of
the loan of Rs.64.30 Lakh as also reflected in
the balance sheet. Thus, to that extent there is
no dispute by the respondent/company.

51. With regard to the second limb of
the claim of the petitioner/company on the
basis of assignment deed executed in its
favour by the IDBI Bank and disputed by the
respondent company, it is essential to notice
that the deed of assignment would be an
'actionable claim' as defined under Section 3
of Transfer of Property Act and can be
enforced as an actionable claim by the
petitioner, however, the fact remains that the
assignment deeds, assigned the debts which
were non-existent as the OTS proposal had
already been signed by the IDBI Bank and
based upon the payments thereof, the
recovery proceedings were also consigned to
record.

52. From the definition of 'actionable
claim' as defined under Section 3 of the
Transfer of Property Act, it is clear that on
5 All. Zaitek Polyblends Pvt. Ltd. Vs. Sri Durga Bansal Fertilizer Ltd.
1817
the basis of the said, the claimant should be
entitled to knock at the door of a Court and
the Court can grant a decree of recoverable
and payable debt. However, the debt owed
to IDBI Bank stood extinguished even prior
to the assignment in favour of the
petitioner, as such, even if the petitioner
had approached and filed a suit for
recovery against the respondent/company
based upon the assignment of the debt, the
same would, prima facie, have miserably
failed, as the part of the debt owed to the
IDBI Bank over and above the OTS
settlement stood waived.

53.