1. By the present petition under Sections 433(e), 434 read with 439 of the Companies Act, 1956 the petitioner has prayed for winding up of the respondent company namely Vandana Global Limited,.
2. Heard Mr. Dinyar Madan, learned Senior Counsel appearing for the petitioner and Shri. Pradeep Sancheti, learned Senior Counsel appearing for the respondent at length and perused the record.
3. The petitioner is a Non Banking Financial Company (NBFC) and carries on business of extending credit facilities by way of term loan and of providing solutions to various companies.
(i) It is the case of the petitioner that, Vandana Udhyog Limited (for the sake of brevity referred to as the "Borrower") approached the petitioner for availing financial assistance, representing that, it is financially sound and is in a position to honour its financial commitments sought for. After due deliberation the petitioner vide its Offer Letter dated 16.10.2011 gave an offer to the borrower for an Infra Term Loan of Rs. 100 Crores. The said loan was required by the Borrower for infusion of equity into the Power Project floated by Vandana Vidhyut Ltd. for setting up a 540 Mega Watt Power Project at Village Salora, Katghora, District Korba in Chhattisgarh. The offer made by the petitioner was subject to the terms and conditions which were duly accepted and acknowledged by the Borrower through its authorised representative by affixing its rubber stamp and signature. That, the Offer Letter dated 16.10.2011 is a binding contract between the Borrower and the petitioner.
(ii) That, in pursuance of the said Offer Letter dated 16.10.2011 the Petitioner and Borrower entered into a 'Loan Agreement' dated 6.1.2012 recording the terms and conditions of the loan facilities granted by the Petitioner to the Borrower. The aforestated Offer Letter dated 16.10.2011 also formed part of the said Loan Agreement. That, the respondent along with Borrower and Vandana Ispat Ltd. (V.I.L.) also executed an Option Agreement of even date i.e. 6.1.2012 which according to the petitioner, is in fact a Guarantee Agreement, in favour of the petitioner. That under the Option Agreement dated 6.1.2012 the Borrower, the respondent and Vandana Ispat Ltd. (V.I.L)irrevocably, absolutely and unconditionally agreed and undertook to the petitioner that, in the event of occurrence of an 'Event of Default' under the Loan Agreement, the petitioner, at its discretion may issue a 'Put Notice' and upon receipt of such 'Put Notice', the Borrower, Respondent and Vandana Ispat Ltd. shall without demur or protest, make payment of the Exercise Price to the petitioner and accept by way of an assignment from petitioner the Facility along with all rights and liabilities there under.
(iii) The relevant clauses of the said Option Agreement dated 6.1.2012 are reproduced herein below for the sake of convenience:
(1) At the request of the Borrower, IFIN has agreed to provide a term loan of Rs. 1,000/million to the Borrower (Rupees One Thousand Million Only) ("the Facility") in terms of Loan Agreement dated 6.1.2012 ("Facility Agreement").
(2) It is a condition for IFIN agreeing to grant the Facility that VGL and VIL provide IFIN with an unconditional and irrevocable option to sell and assign the Facility to VGL and VIL along with the associated rights thereunder in the event an Event of Default occurs under the Facility Agreement.
Article - I:
(1.1) In this Agreement, unless the subject or context otherwise requires, the following words and expressions shall have the following meanings:
(a) "Exercise Price" shall mean the aggregated amount of all debts and monetary liabilities of the Borrower to IFIN which are owed, incurred and outstanding as principal, together with interest, fees, charges, cost, expenses and all other monies whatsoever payable by the Borrower alongwith penalties, if any, under the Facility Agreement and any other document in relation to the Facility upon the occurrence of an Event of Default under the Facility Agreement.
(b) "Put Notice" means the notice substantially in the form set out in Schedule I attached hereto served by IFIN to VGL and VIL pursuant to Article 2.1 of this Agreement.
(c) "Put Option" means the right but not the obligation of IFIN to sell and assign the Facility to VGL and VIL on the terms and conditions contained in this Agreement and demand payment of the Exercise Price.
(d) "Put Option Event" shall mean, the occurrence of an event of Default under the Facility Agreement.
VGL and VIL hereby irrevocably, absolutely and unconditionally agree with and undertake to IFIN that in the event of the occurrence of an Event of Default under the Facility Agreement IFIN may, at its discretion, issue the Put Notice; and upon the receipt of the Put Notice VGL and VIL shall, without demur or protest, make payment of the Exercise Price to IFIN and accept by way of assignment from IFIN the Facility alongwith all rights and liabilities thereunder.
Representations, Warranties And Covents
3.2. VGL and VIL agree and undertake that VGL and VIL shall, jointly and severally in good faith take all steps and perform such action and deeds as may be required or necessary to obtain any approval/consent/confirmation/permission from any agency (either regulatory, statutory, government or otherwise) to facilitate and effectuate the assignment hereunder.
This Agreement will terminate on the happening of the following events.
(a) On due repayment of all outstanding amounts under the Facility by the Borrower to IFIN, or
(b) On the receipt of the Exercise Price by IFIN from VGL and VIL in terms of Article 2.1.
(iv) That, for the purpose of securing the Facility in terms of Loan Agreement the Borrower along with Viconic Vyapaar Private Limited (VVPL) also executed a Pledge Agreement dated 6.1.2012, thereby pledging in favour of the petitioner the Pledged Securities described in Schedule thereto. The borrower also gave Corporate guarantee of Viconic Vyapar Ltd (V.V.L) and personal guarantee of Mr. Vinod Agarwal, Mr. Subash Agarwal, Mr. Ashok Agarwal, Mr. Gopal Prasad Agarwal, Mr. Prahalad Agarwal and Mr. Vijit Kumar Agarwal. The borrower issued postdated cheques for the principal amount and interest in favour of the petitioner and also executed Demand Promissory Note.
(v) After execution of the aforestated Agreements and documents the petitioner disbursed the entire amount of 100 Crores (less deduction in terms of the Loan Agreement read with Offer Letter) in favour of the Borrower from 24.1.2012 to 17.1.2013. It is the further case of petitioner that the said loan was availed, enjoyed and utilized by the Borrower and the Borrower made payment of interest till 30.6.2013 and thereafter for the reasons best known to it, despite repeated requests and reminders by the petitioner the Borrower made defaults in payments. That the petitioner thereafter by its various letters dated 19.7.2013, 31.7.2013, 9.8.2013 and 25.9.2013 recorded defaults committed by Borrower in payment of interest due since 1.7.2013 and called upon the Borrower to pay overdue interest immediately. As the borrower did not pay the amount due and payable, the petitioner issued letters dated 6.12.2013 and 9.1.2014 calling upon it to make payment of the outstanding dues including interest dues and the loan management fees, payable to the petitioner under the Facility Agreement.
(vi) The petitioner thereafter issued a Legal Notice dated 12.2.2014 to Borrower and Respondent recording various events of defaults committed by the Borrower and called upon the Borrower to pay outstanding dues to the petitioner. That, the said notice was also given with respect to the enforcement of the securities by taking such steps/actions, under the Facility Agreement/Pledge Agreement and other security documents executed in favour of the petitioner to secure the Facility/loan advanced by the petitioner. The Borrower by its reply dated 18.2.2014 admitted the loan availed from the petitioner however expressed several difficulties for non payment of the amount due and payable under the Facility Agreement.
(vii) It is the further case of the petitioner that, as an event of default had occurred, as contemplated under the loan agreement, the petitioner exercised the terms of Option Agreement and issued a Put Notice dated 21.2.2014 calling upon the respondent and Vandana Ispat Limited (VIL) to make payment of Rs. 111,99,14,652/being the Exercise Price on the date of issuance of the said Put Notice. By its response dated 10.3.2014 to the said Put Notice, the respondent disputed the exercise of the Option by the petitioner and called upon the petitioner to withdraw the Put Notice. On account of continuing default by the Borrower and the Option Parties, including the respondent, the petitioner left with no other alternative and invoked the pledge of shares of Viconic Vyapaar Ltd (V.V.L.) and sold those shares in the period ranging from 3.4.2014 to 6.10.2014 at the rate of approximately Rs. 23/per share to Rs. 23.23 per share and gave credit of the said realized amount to the Borrower.
(viii) As the respondent failed and/or neglected to make payment of the debt due to the petitioner, the petitioner issued a statutory notice dated 13th September, 2014 as contemplated under section 433 and 434 of the Companies Act, 1956.
(ix) That by its reply dated 27.9.2014 though the respondent admitted the facilities availed by the Borrower, denied its liability under the Option Agreement on various grounds as set out therein. As the respondent did not pay the said amount of debt mentioned in the statutory notice, the petitioner filed Company Petition No.782 of 2014 against the respondent on 25.2.2015. In the said petition, respondent filed an affidavit in reply dated January, 2015 ( the date of affirmation of affidavit in the compilation of petition is blank) inter alia admitting the fact that, the respondent was only a guarantor to the alleged claim made by the petitioner against Vandana Udyog Limited under the Option Agreement dated 6.1.2012 and the said petition was filed against the respondent to pressurise it. Despite admitting its liabilities as guarantor the respondent opposed the petition on the ground that the amount mentioned in the statutory notice dated 13.9.2014 differs from the amount mentioned in the Put Notice dated 21.2.2014. The said Company Petition No.782 of 2014 was withdrawn on 25.2.2015 by the petitioner with liberty to file a fresh petition after serving a fresh statutory notice on the respondent company.
(x) That, the respondent by its letter dated 4.3.2015 purportedly terminated the Option Agreement dated 6.1.2012 for the reasons mentioned in the said letter. The petitioner by its response letter dated 14.5.2015 denied the said termination.
(xi) That, since all the four instalments under the Facility/Loan Agreement were due and payable, the petitioner through its Advocate's issued a fresh demand notice dated 11.5.2015 to the Borrower. As the Borrower failed to comply with the demands of the petitioner, the petitioner once again exercised the Option Agreement and issued a Put Notice dated 15.5.2015 to the respondent calling upon it to make payment of an amount of Rs. 121.92,14,334 being Exercise Price payable by respondent to the petitioner as on 11.5.2015. The respondent did not make the said payment as was called upon to pay by the Put Notice dated 15.5.2015, the petitioner therefore through its Advocate issued a statutory notice dated 18.5.2015 at the registered office of the respondent company calling upon the respondent company to pay to the petitioner a sum of Rs. 121,92,14,334 being Exercise Price payable by the respondent to the petitioner as on 11.5.2015. Despite service of the said statutory notice the respondent did not pay the debt to the petitioner.
4. The petitioner therefore filed the present petition on 13.7.2015. The petition is accepted on 11.8.2015 and in pursuance of the directions issued by the Company Registrar the petitioner served a copy of the petition upon the respondent. After service of notice, the respondent company entered its appearance and has filed an affidavit in reply dated 30.9.2015.
5. Mr. Madon, learned Senior Counsel appearing for the petitioner submitted that the Option Agreement dated 6.1.2012 is in fact a Guarantee Agreement and the respondent has stood as guarantor/surety for the loan/facility availed by Vandana Udyog Limited. He submitted that, there is no dispute that in interpreting a contract and the Articles are nothing if not that, the conduct of parties is relevant. That, in the process of interpretation of the terms of a contract, the Court can frequently get great assistance from the interpreting statements made by the parties themselves or from their conduct in rendering or in receiving performance under it. He further submitted that, unless explained, an admission furnishes best evidence. That, if ever there was unequivocal admission by conduct as to the meaning of a contractual document i.e. probably an admission itself. In support of his contention, he relied on the Judgment of the learned Single Judge of this Court in Notice of Motion No. 944 of 2013 in Suit No.462 of 2013 in the case of Madhu Ashok Kapur and ors. v. Rana Kapoor and ors. He further submitted that in view of section 126 of the Indian Contract Act the Option Agreement herein is a Guarantee Agreement. He further submitted that in the Option Agreement in Article IV specific clauses for termination of the said agreement have been enumerated on happening of certain events and the alleged or purported termination of the Option Agreement by the respondent by its communication dated 4.3.2015 is bad in law and nonest in the eyes of law.
Mr. Madon further submitted that in Company Petition No.782 of 2014 the respondent has filed an affidavit in reply and has admitted that the respondent is only guarantor to the claim made by the petitioner against Vandana Udyog Limited under the Option Agreement dated 6.1.2012. That, in reply dated 30.9.2015 filed in the present petition, the respondent has taken a contrary stand and has stated that the Option Agreement is not a guarantee document and the respondent is not a guarantor of the facility claimed to have been disbursed to Vandana Udyog Limited (VUL). He submitted that in view of the different stands taken by the respondent in the aforestated two affidavits, it is an ingenious mask invented by the respondent to deprive the petitioner of a just and honest entitlement. He further submitted that in the proceedings initiated by Vandana Udyog Limited i.e. borrower, before National Company Law Tribunal, Mumbai Bench, being a corporate applicant, under the Insolvency and Bankruptcy Code 2016 the said Borrower has named the present respondent as Guarantor of the financial creditor, namely the petitioner herein. In support of his contention he produced on record a copy of the said proceeding wherein at Page 188, the said Corporate Applicant has named the present respondent as a guarantor to the financial assistance extended by the petitioner herein. He submitted that it would be unjust to refuse winding up order on the petitioner who admittedly owe monies which have not been paid merely because there is a dispute as to the precise amount owed by it. In support of his contention he relied on the decision of the Division Bench of this Court in the case of Tata Finance Limited, Mumbai v. Kanoria Sugar and General Manufacturing Company Ltd., Mumbai reported in 2002 Vol.104(2) Bom. L.R. 187. He therefore prayed that the present petition may be admitted.
6. Mr. Sancheti, learned Senior counsel appearing for the respondent, in opposition to the admission of the petition submitted that in Clause 14 dealing with Security in the Loan Agreement dated 6.1.2012 under the head of Principle Terms and Conditions for Loan Facility, the name of respondent company is not mentioned and therefore, the respondent is not a guarantor to the loan facility availed by Vandana Udyog Limited. He submitted that the Option Agreement dated 6.1.2012 is in fact a contingent contract for sale of immovable property and it merely gives a right to the seller to sell 'the facility' to Vandana Global Limited (the Respondent) and Vandana Industries Limited (VIL). That, the respondent has terminated the Option Agreement by its letter dated 4.3.2015. That, the petitioner's claim is based on purported 'Put Option Exercise', exercised by letter dated 15.5.2015 i.e. post termination of the agreement and the statutory notice dated 18.5.2015 for winding up is based on the said notice dated 15.5.2015. He submitted that thus, the validity of the 'Put Option Agreement' itself is disputed question of fact which cannot be tried in company petition.
He then submitted that the agreement to sell 'the facility' is not enforceable by way of company petition. That, assuming for the sake of argument that, 'Put Option Agreement' survives despite termination and that 'Put Option Exercise' by the petitioner is not wrongful then also it would amount to an agreement to sell 'the facility' i.e. 'debt along with all rights and liabilities thereunder'. That, the contract is yet to be performed by either party and at the highest the petitioner's case is for breach of the contract by the respondent and for the alleged breach of contract the petitioner can either seek performance of contract or seek damages for breach of contract. He submitted that in neither case i.e. for enforcement of the contract or claim for damages for breach thereof, a company petition for winding up can be remedy. In support of his contention, he relied on the decision of the Karnataka High Court in the case of M/s. Greenhills Exports (P) Ltd. and ors. v. Coffee Board reported in ILR 2001 Karnataka 2950.
He further submitted that, the petitioner's had purportedly issued 'Put Option Notice' by its letter dated 21.12.2014 claiming consideration payable for the 'the facility' being Rs. 111,99,14,652 and the petitioner thereafter filed a company petition in pursuance of the statutory notice dated 13.9.2014 seeking to enforce the same and made a claim to the tune of Rs. 70,90,43,702. That, there was no explanation given in the company petition about the said variance between 'Put Option Exercise Price' (POEP) and the 'claim' in the company petition and therefore, the same was withdrawn with liberty to file a fresh Company Petition after serving a fresh statutory notice on the respondent company. He submitted that the respondent company after having realised that the Petitioner has unilaterally dealt with the pledged shares after the purported exercise of 'Put Option', terminated 'Option Agreement' vide its letter dated 14.5.2015 for the reasons stated therein. He submitted that 'Put Option Agreement', does not permit exercise of multiple options by the Petitioner and therefore there is no scope of exercising a second 'Put Option Notice' since whatever is 'the facility', it becomes subject matter of sale under the first notice itself and hence, the subsequent 'Put Option Notice' dated 15.5.2015 and the present petition filed on the basis thereof is clearly not maintainable.
He submitted, that the petitioner's claim, a sum of Rs. 111,99,14,652/by way of 'Put Option Exercise' vide letter dated 14.1.2015 and in contrast thereto by notice dated 13.9.2014 and also in the earlier Company Petition claimed an amount of Rs. 70,90,43,702/as due and payable. That, the subsequent 'Put Option Notice' dated 15.5.2015 claims the consideration of Rs. 121,92,14,334/for sale of the very same facility. He submitted that in the particulars of claim, there is a reference to various items, such as interest payable, penal interest and the interest paid by the Borrower etc. all of which requires ascertainment and adjudication, apart from the fact that penal interest is not enforceable in law. He therefore submitted that, thus, it vitiates the computation of the alleged 'Put Option Exercise Price'. In support of his contention he relied on the decision of the Supreme Court in the case of Pradeshiya Industrial & Investment Corporation of U.P v. North India Petrochemicals Ltd. and anr. reported in (1994) 3 SCC 348 and the decision of this Court in the case of The Jayabharat Credit Limited v. Jalgaon ReRolling Industries Ltd. reported in (1997) 99(1) Bom L.R. 521: (1997) 2 BC 328.
He further submitted that, the petitioner has appropriated the pledged shares unilaterally on different occasions as communicated vide letters dated 3.4.2014, 7.7.2014, 31.7.2014 and 6.10.2014 for an aggregate sum of Rs. 13,09,25,890/and according to him the said appropriation at the said rate to the pledged shares is evidently at gross undervalue and thus, the consideration alleged is not an ascertained sum of money and therefore, not a 'debt' enforceable in a winding up petition. He submitted that in absence of agreement or adjudication of price/consideration such a contract cannot be enforced, much less by way of winding up proceedings.
He then submitted that, the terms and conditions contained in the Offer Letter dated 16.10.2011 constitute a part of the Loan Agreement. That, the terms and conditions at Sr.No.14 of the Offer Letter expressly set out 'Security' and within that also 'Corporate Guarantee of Viconic Vyapar Ltd.' is accepted and the 'Personal Guarantee' of certain individuals has been taken by the petitioner. That, the name of the respondent company does not appear either as 'Corporate Guarantor' or as a 'Personal Guarantor'. That, the 'Option Agreement' is a distinct agreement having its own terms and conditions to sell 'the facility' along with all rights and liabilities and thus, it being a contract for sale of immovables, the parties are bound by the terms therein and the parties cannot seek to wriggle out of the same by conveniently treating it as if it is a guarantee agreement. He further submitted that the petitioners are conscious of the difference between a guarantee and an 'Option Agreement' and that is why the two are dealt with separately in the Offer Letter. Mr. Sancheti produced on record a copy of the plaint in Summary Suit No.858 of 2014 filed by the petitioner in this Court against Shri. Subhashchand Agarwal and six others including Viconic Vyapar Private Ltd. and submitted that, the said suit is filed against the guarantors of the petitioner and the name of the respondent company is not mentioned therein as a guarantor. That, thus, admittedly the respondent is neither borrower nor a guarantor. He further submitted that the petitioner has also filed a separate suit against the principal borrower i.e. Vandana Udyog Limited being Suit No.856 of 2014 and there also, the petitioner has not mentioned the respondent as a guarantor. He submitted that a safe inference therefore can be drawn that the respondent company is not a guarantor to the borrower.
He further submitted that in any proceeding to enforce 'Option Agreement' Vandana Ispat Limited (VIL) is a necessary party. That under the 'Option Agreement', the petitioner is a proposed seller and the respondent along with Vandana Ispat Limited (VIL) are the proposed purchasers. The obligation to purchase 'the facility' is shown as obligation of both the purchasers since, Vandana Global Limited and Vandana Ispat Limited both are described as having obligation to purchase and thus, it is not permissible to seek enforcement of such an Agreement only against one of the purchasers. He submitted that the petitioner to suit its convenience is now, by the purported interpretation seeking to rewrite the contract, contrary to its express terms.
He submitted that, by the present winding up petition, the petitioner is seeking to enforce demand for payment of purported 'Put Option Exercise Price' against one of the two purchasers and such proceedings even if filed by way of a Suit would not be maintainable for want of necessary parties. That thus, it clearly shows that the winding up proceedings are not maintainable.
He submitted that the present winding up petition is being misused to assert pressure and coerce the Respondent Company to pay the amount due and payable by the Borrower. That, once pledged shares are appropriated and adjusted, it is evident that the petitioner's actions are contrary to the settled law, that for enforcement of an agreement by way of specific performance, the Claimant/Plaintiff has to be ready and willing to perform its entire obligation throughout. That, the contract has been terminated on the above ground and without challenging the validity of the termination, it is not permissible to seek enforcement of such an agreement. In support of his contention he again relied on the decision of the Supreme Court in the case of Pradeshiya Industrial and Investment Corporation of U.P. (supra). He lastly by relying on a decision of the Supreme Court in the case of IBA Health (India) Private Limited v. Info Drive Systems SDN BHD reported in (2010) 10 SCC 553 submitted that the present petition is clearly malafide and an abuse of process of law and therefore prayed that the present petition does not require any consideration and may be rejected summarily.
7. At this stage a useful reference can be made to the decision of the Supreme Court in the case of Tamboli Ramanlal Motilal (dead) by L.R.s v. Ghanchi Chimanlal Keshavlal (dead) by L.R.s and another reported in AIR 1992 S.C. 1236 wherein the Supreme Court has held that, it is also settled law that nomenclature of the document is hardly conclusive and much importance cannot be attached to the nomenclature alone since it is the real intention which requires to be gathered.
8. It is from this angle I propose to analyse the document in question i.e. Option Agreement dated 6.1.2012 executed between the petitioner on one side and borrower, respondent and Vandana Ispat Ltd. (VIL) on the other side.
The Article II of the said 'Option Agreement' dated 6.1.2012 deals with the aspect of Put Option which specifically and categorically mentions that the respondent herein and Vandana Ispat Limited irrevocably, absolutely and unconditionally agree with and undertake to petitioner that in the event of occurrence of an Event of Default under the Facility Agreement (Loan Agreement), the petitioner may at its discretion, issue the 'Put Notice' and upon the receipt of the 'Put Notice' the respondent herein and Vandana Ispat Limited shall, without demur or protest, make payment of the Exercise Price to the petitioner and accept by way of assignment from the petitioner the facility along with all rights and liabilities thereunder.
Article VIII of the Loan Agreement (Facility Agreement) dated 6.1.2012 enumerates Events of Defaults and Remedies and in its Clause 8.1 has defined Events of Defaults. Clause (a) and (b) of the said Events of Defaults are reproduced herein below for the sake of brevity.
"8.1 Events of Default
The happening of one or more of the following events shall be called "Events of Default".
(a) If Default has been committed by the Borrower in payment of any instalment of interest on the due dates as set out in the Annexure hereto and such default shall have continued for a period of 7 days
(b) If default has occurred in the payment of any monthly/quarterly instalments of principal amount on dates as set out in the Annexure hereto and such default shall have continued for period of 7 days."
9. It is the specific case of the petitioner that the said loan/facility was availed, enjoyed and utilized by the Borrower and the Borrower made payment of interest till 30.6.2013 and thereafter despite repeated requests and reminders by the petitioner the Borrower made defaults in payment. Thus, it is clear that an Event of Default as contemplated under Clause (a) and (b) of Para No.8.1 of Article VIII of Loan Agreement has clearly occurred and therefore, the petitioner had issued Put Notice dated 21.2.2014 calling upon the respondent herein and Vandana Ispat Limited (VIL) to make outstanding payment to the petitioner. The said outstanding payment was the Exercise Price on the date of issuance of the said Put Notice dated 21.2.2014
10. A plain and simple reading of the Article II i.e. Put Option of 'Option Agreement' dated 6.1.2012 and Article VIII (Events of Defaults and Remedies) of Loan Agreement (Facility Agreement) dated 6.1.2012 would clearly indicate that there is no ambiguity in its wording. The said clauses of both the agreements are unambiguous in nature and does not give rise to any other interpretation least to say, the interpretation which is being sought to be canvassed by the learned counsel for the respondent. In considered view of this Court the said document i.e. 'Option Agreement' dated 6.1.2012 is in fact an 'Agreement for Guarantee' executed by the respondent in favour of the petitioner and its nomenclature itself is not a conclusive proof of having different intention in its execution. It is further to be noted here that principle executant of the said document i.e. the Borrower namely (Vandana Udhyog Limited) has availed the facility/loan from the petitioner as mentioned in the aforestated paragraphs to which indubitably the respondent is the Guarantor.
11. This leads me to deal with the aspect of termination of Option Agreement by the respondent by its letter dated 4.3.2015. Article IV of 'Option Agreement' dated 6.1.2012 deals with the termination of the said agreement. In the said clause, it is categorically stated as has been agreed between the parties that, the said agreement will terminate on the happening of only two events namely a) on due repayment of all outstanding amounts under the Facility by the Borrower or b) On the receipt of the Exercise Price by the petitioner from respondent and Vandana Ispat Limited (VIL) in terms of Article 2.1 of the said agreement.
It is an admitted fact on record that, principal borrower till date has not repaid the said loan/facility availed by it to the petitioner even after receipt of Put Option Notice and statutory notice under the Companies Act. The respondent has nether paid the exercise price mentioned in the notices issued by the petitioner nor the other guarantors have paid it to the petitioner. It is to be noted here that after the earlier petition i.e. Company Petition No.782 of 2014 filed by the petitioner against the respondent herein was withdrawn due to certain legal technicalities the respondent has issued a letter dated 4.3.2015 thereby seeking termination of 'Option Agreement' dated 6.1.2012. As noted earlier the said agreement can be terminated on happening of the aforestated two events only. That, the said purported notice/letter dated 4.3.2015 by the respondent, according to me therefore is not tenable in the eyes of law in view of the specific agreed terms by the parties herein. It further appears that the said termination notice/letter dated 4.3.2015 has been issued by the respondent only with a view to wriggle out of the legal liability arising out of 'Option Agreement' and nothing else.
12. As far as Summary Suit No.858 of 2014 filed by the petitioner against Mr. Subhashchnd Agarwal and other six defendants is concerned, it clearly indicates that the said suit is filed by the petitioner against the defendants therein in their personal capacity as the said defendants have given their personal guarantee to the facility/loan availed by the borrower by executing loan agreement/facility agreement dated 6.1.2012. Clause 14 of the offer letter dated 6.12.2011 makes it apparently clear that the defendants in the said suit have given personal guarantee to the loan availed by the borrower and it is in their personal capacity they have been arraigned as defendants in the said suit. Non impleadment of the respondent herein as defendant in the said suit does not in any way lead to an inference that, respondent is not a guarantor to the loan/facility availed by the principal borrower. It is further to be noted here that in the proceedings filed by the principal borrower namely Vandana Udhyog Limited before the National Company Law Tribunal, Mumbai Bench. In Annexure 15 to the said proceeding the Borrower has categorically mentioned about the fact that it has accepted financial facilities from the financial creditor namely petitioner herein and the respondent herein has extended guarantee to it. Thus, it is clear that the principal borrower also considers accepts and treats the respondent as its guarantor. As stated earlier in considered opinion of this Court the respondent is indubitably guarantor of the principal borrower and now is trying to shrug of its responsibility by adopting a totally non plausible interpretation to the binding clause of the said Agreement.
13. Clause (c) of Article I of the 'Option Agreement' dated 6.1.2012 deals with 'Put Option' and it is agreed that, right but not the obligation of the petitioner to sell and assign the facility to respondent and Vandana Ispat Limited (VIL) on the terms and conditions contained in the said agreement and demand payment of the Exercise Price. Thus, it is clear that it is the right of the petitioner but not its obligation to sell and assign the facility to the respondent on the terms and conditions contained in the present agreement and therefore, according to me there is no substance in the submission of the learned counsel for the respondent that after sale of part of the shares which were pledged by Viconic Vyapar Private Limited by way of Pledge Agreement the 'Put Option Notice' cannot be given by the petitioner to the respondent has no substance in it.
14. This leads me to deal with the most important aspect of the present petition i.e. change of
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stance by the respondent to suit the situation. It is to be noted here that in the affidavit in reply filed by the respondent in Company Petition No.782 of 2014 in Para7 the respondent had in unequivocal terms admitted that the respondent is only guarantor to the claim made by the petitioner against Vandana Udhyog Limited under the Option Agreement dated 6.1.2012. However, in the reply dated 30.9.2015 filed in the present petition the respondent in Para 3(E) has taken a stand that the Option Agreement is not a guarantee document and the respondent is not the guarantor of the facility claimed to have been disturbed to Vandana Udhyog Limited. 15. The Supreme Court in the case of IBA Health (India) Private Limited v. Info Drive Systems Sdn. Bhd. reported in (2010) 10 SCC 553 in Para 20 has held as under: "The question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding up for discharge of that liability? In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt? A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The company Court, at this stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. It is settled law that if the creditor's debt is bonafide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding up petition as a means of forcing the company to pay a bona fide disputed debt". 16. In view of the different stands taken by the respondent in the aforesaid two affidavits it is clear that it is an ingenious mask invented by the respondent to deprive the petitioner for a just and legally bonafide entitlement of its claim. 17. In view of the above and in view of this Court, in this case, the defence of the respondent is totally spurious, speculative, illusory, misconceived and moonshine and not a bonafide dispute. The respondent is not able to avoid the statutory demand by raising any specific dispute and thus deserves to face consequence of winding up on the ground that the respondent is unable to pay its debts. Hence, the following order. i) The Company Petition is admitted and made returnable on 16.2.2018 ii) The petitioner is directed to advertise the petition in two local newspapers viz, "Free Press Journal"(in English and "Navshakti" (in Marathi) and also in the Maharashtra Government Gazette. Any delay in publication of the advertisement in the Maharashtra Government Gazette and any resultant inadequacy of notice shall not invalidate such advertisement or notice and shall not constitute non compliance with this direction or with the Companies (Court) Rules, 1959. iii) The petitioner shall also deposit an amount of Rs. 10,000/with the Prothonotary and Senior Master of this Court with intimation to the Company Registrar towards publication charges, within a period of two weeks from the date of this order, failing which the petition shall stand dismissed for non prosecution without further reference to the Court. iv) Notice under Rule 28 of the Companies (Court) Rules, 1959 be served upon the respondent company. S.O. to 16.2.2018.