{"id":134509,"date":"2009-03-12T00:00:00","date_gmt":"2009-03-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-motwani-builders-pvt-ltd-vs-ms-kunal-co-on-12-march-2009"},"modified":"2016-04-13T19:58:39","modified_gmt":"2016-04-13T14:28:39","slug":"ms-motwani-builders-pvt-ltd-vs-ms-kunal-co-on-12-march-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-motwani-builders-pvt-ltd-vs-ms-kunal-co-on-12-march-2009","title":{"rendered":"M\/S.Motwani Builders Pvt.Ltd vs M\/S.Kunal & Co on 12 March, 2009"},"content":{"rendered":"
Bombay High Court<\/div>\n
M\/S.Motwani Builders Pvt.Ltd vs M\/S.Kunal & Co on 12 March, 2009<\/div>\n
Bench: D.K. Deshmukh, A.A. Sayed<\/div>\n
                              - 1 -\n\n\n\n\n          IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                                   \n                                           \n                            O.O.C.J.\n\n\n\n                      APPEAL NO.513 OF 2007\n\n\n\n\n                                          \n                               IN\n\n               COMPANY PETITION NO.726 OF 1998\n\n\n\n\n                                   \n                              WITH\n\n              NOTICE OF MOTION NO.3002 OF 2007\n                       ig      ...\n\n    M\/s.Motwani Builders Pvt.Ltd.      ...Appellant\n                     \n            v\/s.\n\n    M\/s.Kunal & Co.                    ...Respondent\n      \n\n\n                              WITH\n   \n\n\n\n                      APPEAL NO.514 OF 2007\n\n                               IN\n\n\n\n\n\n               COMPANY PETITION NO.171 OF 2000\n\n                              WITH\n\n              NOTICE OF MOTION NO.3003 OF 2007\n\n\n\n\n\n                               ...\n\n    M\/s.Motwani Builders Pvt.Ltd.      ...Appellant\n\n            v\/s.\n\n    Tarachand H. Khanchdani            ...Respondent\n\n\n\n\n                                           ::: Downloaded on - 09\/06\/2013 14:24:13 :::\n                                    - 2 -\n\n\n\n\n                                    ...\n\n\n\n\n                                                                          \n    Mr.S.H.Doctor Sr.Advocate with Mr.J.P.Sen i\/b\n\n\n\n\n                                                  \n    M\/s.Federal & Rashmikant for the Appellant.\n    Dr.V.V.Tulzapurkar, Sr.Advocate with\n    Mr.B.K.Bali for Respondent No.1 for the Respondent\n    in Appeal No.513\/2007.\n    Mr.Pramod Kumar i\/b M\/s.Pramod Kumar & Co. for the\n\n\n\n\n                                                 \n    Respondent in Appeal No.514\/2007.\n                             ...\n\n\n                                     CORAM: D.K.DESHMUKH &\n\n\n\n\n                                     \n                                             A.A.SAYED, JJ.\n<\/pre>\n
                          ig         DATED: 12TH MARCH, 2009\n                        \n    JUDGMENT:(PER D.K.DESHMUKH, J.)\n\n\n\n    1.     By    both these appeals the Appellant             challenges\n      \n\n\n    common      order    passed by the learned single Judge                 of\n   \n\n\n\n<\/pre>\n
    this court dated 29-6-2007 in Company Petition No.726<\/p>\n
    of    1998    and Company Petition No.171 of 2000.                  Both<\/p>\n
    these      company petitions were filed by two              different<\/p>\n
    Petitioners       seeking the same reliefs namely              winding<\/p>\n
    up    of    the Appellant-company.      The grounds on             which<\/p>\n
    the    order of winding up of the Appellant-company was<\/p>\n
    sought      was   also   the same, and    therefore,           in     our<\/p>\n
    opinion,      both    these   appeals   can    be     conveniently<\/p>\n
    disposed of by a common order.\n<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span><\/p>\n
                                      – 3 –\n<\/p>\n
    2.     The facts that are relevant and material for our<\/p>\n
    purpose      are that the Company Petition No.726 of 1998<\/p>\n
    was    filed     by    M\/s.Kunal & Co., a       partnership           firm<\/p>\n
    registered       under the Indian Partnership Act                seeking<\/p>\n
    an    order for winding up of the Appellant-company and<\/p>\n
    an    order for appointment of official liquidator as a<\/p>\n
    liquidator of the company was also sought.\n<\/p>\n
    3.     In    the    petition,     it     was   averred        that      the<\/p>\n
    Appellant-Company was incorporated on 17.2.1982 under<\/p>\n
    the Companies Act, 1956 as a private company, limited<\/p>\n
    by    shares.      The registered office of the Company was<\/p>\n
    at     Mumbai.        The   authorised      share     capital           was<\/p>\n
    Rs.3,00,000\/-         divided    into 30,000 equity shares                of<\/p>\n
    Rs.10\/-      each.      The issued, subscribed and             paid       up<\/p>\n
    share       capital      of    the     Appellant      Company           was<\/p>\n
    Rs.2,07,000\/-         divided    into 20,700 equity shares                of<\/p>\n
    Rs.10\/-      each,     fully    paid up.    The objects          of     the<\/p>\n
    Company      as set out in the Memorandum of              Association<\/p>\n
    were    to carry on business, own, buy, sell,                  possess,<\/p>\n
    develop,      construct,       demolish, rebuild or           otherwise<\/p>\n
    deal in lands and buildings and to do other ancillary<\/p>\n
    things      in   relation to the aforesaid objects as                   set<\/p>\n
    out    in detail in the Memorandum of Association.                        It<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 4 –\n<\/p>\n
    was    contended that the Company was indebted to Kunal<\/p>\n
    for    a    sum of Rs.3,91,54,538\/- being the balance                       of<\/p>\n
    the    amount lent and advanced by the petitioner-Kunal<\/p>\n
    to    the    Appellant-Company alongwith interest due                       at<\/p>\n
    the rate of 18% p.a.          with quarterly rests as per the<\/p>\n
    agreement      and in accordance with the particulars                       of<\/p>\n
    claim.\n<\/p>\n
    4.     It was averred in the petition that in or                       about<\/p>\n
    March-1994 the Appellant-Company through its Director<\/p>\n
    and    a<\/p>\n
                Shareholder       Mr.K.K.Motwani         approached           the<\/p>\n
    petitioner-Kunal        and    requested     for        grant        of       a<\/p>\n
    temporary      loan to enable the Company to make payment<\/p>\n
    to    the    appropriate      authority      of      the      Income-tax<\/p>\n
    department      from    whom the Appellant-Company                 was      to<\/p>\n
    purchase a property situated at Worli for development<\/p>\n
    in     an     auction    sale     for    a     consideration                of<\/p>\n
    Rs.21,75,00,000\/-.         The Appellant Company agreed                     to<\/p>\n
    pay    interest at the rate of 18% p.a.                with quarterly<\/p>\n
    rests      on the amount which may be lent and                  advanced.\n<\/p>\n
    The    Petitioner-Kunal therefore, lent and advanced to<\/p>\n
    the     Appellant-Company        an     amount       aggregating            to<\/p>\n
    Rs.3,54,51,000\/-        during the period between                February<\/p>\n
    to     March-1994.        This        amount         lent        by       the<\/p>\n
    petitioner-Kunal         was     duly        received            by       the<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 5 –\n<\/p>\n
    Appellant-Company and the Company agreed to repay the<\/p>\n
    same    alongwith      interest thereon at the rate of                  18%<\/p>\n
    p.a.    with quarterly rests.\n<\/p>\n
    5.     The Appellant-Company thereafter, alongwith                      its<\/p>\n
    forwarding       letter      dated   7.6.1994        sent      to       the<\/p>\n
    petitioner-Kunal         a     cheque   for      an       amount          of<\/p>\n
    Rs.39,40,000\/-        towards    repayment of a part              of    the<\/p>\n
    loan and another cheque for Rs.9,31,707\/- towards the<\/p>\n
    interest      due upto 31.5.1994 at the rate of 18%                    p.a.<\/p>\n
    as agreed.\n<\/p>\n
    6.     The    Appellant-Company thereafter            paid        further<\/p>\n
    amounts      towards    repayment of the loan by              a    cheque<\/p>\n
    dated    8.7.1994      for Rs.39,40,000\/-, a          cheque         dated<\/p>\n
    4.8.1994      for   Rs.39,71,000\/-      and      a    cheque         dated<\/p>\n
    8.2.1995      for Rs.20,00,000\/-.       The company also               paid<\/p>\n
    to the petitioner-Kunal interest due on the amount of<\/p>\n
    the    loan    upto    31.12.1994.      The    Appellant-Company<\/p>\n
    thereafter      failed    to pay the balance amount of                  the<\/p>\n
    loan     or     the     interest      due     thereon          to       the<\/p>\n
    petitioner-Kunal.         That from the certificate                issued<\/p>\n
    by    the Company, it was evident that the Company paid<\/p>\n
    income    tax    deducted from the interest             accrued         and<\/p>\n
    payable      to the petitioner-Kunal for the years ending<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 6 –\n<\/p>\n
    on 31.3.1995 and 31.3.1996 although the amount of the<\/p>\n
    said    interest     accrued        had    not been      paid       by     the<\/p>\n
    Company     to    the    Petitioner-Kunal.              That      in       the<\/p>\n
    circumstances, a sum of Rs.3,64,22,825\/- remained due<\/p>\n
    and     payable     by    the       Appellant-Company             to       the<\/p>\n
    petitioner-Kunal          as    on     31.3.1998        with        further<\/p>\n
    interest     thereon      at    the    rate of      18%      p.a.        with<\/p>\n
    quarterly rests from 1.4.1998 till payment.<\/p>\n
\n\n\n\n\n                                         \n    7.     It   was averred that the            Appellant-Company              had\n\n    admitted     and\n                        \n                        acknowledged          its     liability         to     the\n\n    petitioner-Kunal         and also confirmed the              correctness\n                       \n    of    the   amounts      due    to    the    petitioner-Kunal                by\n\n    executing        confirmation        of    the     accounts         as       on\n\n    31.3.1995.        That    the company had also admitted                    and\n      \n\n\n    confirmed     the correctness of the interest accrued on\n   \n\n\n\n    the    principal amount upto 31.3.1996 vide its                       letter\n\n<\/pre>\n
    dated    27.3.1996.       The company has also confirmed the<\/p>\n
    correctness         of     the        balance         due        to        the<\/p>\n
    Petitioner-Kunal         as    on    30.9.1996      by     executing           a<\/p>\n
    confirmation       of    the accounts.          Lastly, the         company<\/p>\n
    had    further admitted and acknowledged its                     liability<\/p>\n
    to    the   petitioner-Kunal          in its      accounts        and      the<\/p>\n
    balance     sheet for the year ended 31.3.1996.                     It     was<\/p>\n
    contended     that in view of these admissions there was<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 7 –\n<\/p>\n
    no    dispute     whatsoever      about the liability             of     the<\/p>\n
    Company to the petitioner.\n<\/p>\n
    8.     That    since    the    Appellant-Company           failed        and<\/p>\n
    neglected      to   make payment to        the    petitioner-Kunal<\/p>\n
    after    February-1995 either towards repayment of                       the<\/p>\n
    principal      or the interest due, the           petitioner-Kunal<\/p>\n
    by    its Advocate’s letter dated 20.07.1998,                   recorded<\/p>\n
    some    of    the   facts     mentioned     above      and      demanded<\/p>\n
    payment      of   the amount due to the          Petitioner-Kunal.\n<\/p>\n
    The<\/p>\n
           said letter was duly served upon the Company                        by<\/p>\n
    hand    delivery     on 22.7.1998.        The    company        however,<\/p>\n
    failed      and neglected to comply with the demand                    made<\/p>\n
    by    the    Petitioner-Kunal or to respond to                 the     said<\/p>\n
    letter.      In the circumstances, a 2nd letter addressed<\/p>\n
    by    the    Advocate    for      the    petitioner-Kunal             dated<\/p>\n
    24.8.1998, recorded these facts and notified that the<\/p>\n
    petitioner-Kunal        was    proceeding with the filing                  of<\/p>\n
    the winding up petition.           The company however, failed<\/p>\n
    and     neglected      to   pay    the     amount      due      to       the<\/p>\n
    petitioner-Kunal        or any part thereof.           A     contention<\/p>\n
    was    thus raised in the petition that the Company was<\/p>\n
    unable      to pay its debts and was therefore liable                      to<\/p>\n
    be    wound    up under the provisions of             the      Companies<\/p>\n
    Act.     It    was then averred in the petition that                     the<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 8 –\n<\/p>\n
    petitioner-Kunal         was   a shareholder of      the      Company<\/p>\n
    holding     3800 equity shares of Rs.10\/- each.               In     his<\/p>\n
    capacity as a member and a shareholder of the Company<\/p>\n
    the    petitioner-Kunal was entitled to receive notices<\/p>\n
    of the Annual General Meetings of the Company as also<\/p>\n
    the    copies     of    the annual accounts of       the      Company<\/p>\n
    every    year.     The petitioner-Kunal had however,               till<\/p>\n
    date,    not received any notice from the Company about<\/p>\n
    the    Annual General Meeting, if any, held by it.                   The<\/p>\n
    petitioner-Kunal         was   therefore,   not aware         of     the<\/p>\n
    present     status<\/p>\n
                            or development of the said          property<\/p>\n
    purchased     at Worli or any other activities, if                 any,<\/p>\n
    carried      on    by    the    Appellant-Company.          In       the<\/p>\n
    circumstances,          the    petitioner-Kunal          had       lost<\/p>\n
    confidence      in the present management of the              Company<\/p>\n
    and was therefore, entitled to seek winding up of the<\/p>\n
    Company.      The      petitioner-Kunal averred that it              was<\/p>\n
    therefore,      just and equitable to wind up the Company<\/p>\n
    in    the   interest of its creditors and          shareholders.\n<\/p>\n
    After    filing of the petition and the service of                   the<\/p>\n
    same upon the Company, an affidavit-in-reply affirmed<\/p>\n
    by    the   managing director of the        Company        Mr.Kanayo<\/p>\n
    Khubchand Motwani duly affirmed on 18.12.1998 came to<\/p>\n
    be filed in the petition.          It was contended on behalf<\/p>\n
    of    the Appellant-Company that the petition filed                    by<\/p>\n
                                                 ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 9 –\n<\/p>\n
    the     petitioner-Kunal         was     malafide,       induced           by<\/p>\n
    ulterior      motive      and was an abuse of the process                  of<\/p>\n
    the    Court.       The petitioner-Kunal         had     deliberately<\/p>\n
    suppressed      true      facts, papers and documents with                   a<\/p>\n
    view    to    seeking      quick remedy in       an    inappropriate<\/p>\n
    forum.       The    Appellant-Company’s relation               with      the<\/p>\n
    Petitioner-Kunal was not that of borrower and lender.\n<\/p>\n
    The    Petitioner-Kunal         entered into a        business         deal<\/p>\n
    through      its    nominee Shri Ramesh         T.Khanchandani             in<\/p>\n
    pursuance      of    the agreement dated 28.3.1994                entered<\/p>\n
    into<\/p>\n
            between (i) Shri K.K.Motwani, (ii) Shri Manohar<\/p>\n
    T.Makhija      and (iii) Shri Ramesh T.Khanchandani.                     The<\/p>\n
    said    Mr.Makhija        and   Mr.Khanchandani who            were      non<\/p>\n
    resident      Indians      (NRIs)    were      introduced         to     the<\/p>\n
    deponent      by one Shri Sunil Mirpuri who was an                    agent<\/p>\n
    and    broker      in real estates.       That the       Company         was<\/p>\n
    incorporated        on    17.2.1982    by      the    deponent,          his<\/p>\n
    brother and a close friend with an authorised capital<\/p>\n
    of    Rs.3,00,000\/-        for development       and     construction<\/p>\n
    business.          Though    there     were     several         business<\/p>\n
    proposals,      none      had   materialised for         want       of     an<\/p>\n
    appropriate        land site.     On 19.1.1994 an          appropriate<\/p>\n
    authority      of    the    income-tax      department          held       an<\/p>\n
    auction of a property at Worli and the Company made a<\/p>\n
    successful      bid      at the price     of    Rs.21,75,00,000\/-.\n<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span><\/p>\n
                                   – 10 –\n<\/p>\n
    The Company paid Rs.10\/- lacs as earnest money to the<\/p>\n
    appropriate authority.        At the time of the bid, there<\/p>\n
    were    great    potentialities and bright prospects                   for<\/p>\n
    development      and construction business.            Hence, after<\/p>\n
    the land was acquired, the aforesaid NRIs through the<\/p>\n
    good offices of the said Shri Sunil Mirpuri, the real<\/p>\n
    estate agent and broker, showed great interest in the<\/p>\n
    project      because   of the prime location of              the     land<\/p>\n
    which    was acquired by the Appellant-Company from the<\/p>\n
    income-tax      department in an auction sale and because<\/p>\n
    such    property<\/p>\n
                         was   presumed    to be      free       from      any<\/p>\n
    encumbrances      and\/or    hassles    of   defective             title.\n<\/p>\n
    Accordingly, an agreement dated 28.3.1994 was entered<\/p>\n
    into    between Shri K.K.Motwani and the aforesaid                     two<\/p>\n
    NRIs    namely    Shri Manohar T.Makhija and Shri                 Ramesh<\/p>\n
    T.Khanchandani       and the agreement provided that                 they<\/p>\n
    shall    jointly     participate   in the said           Company         to<\/p>\n
    carry    on    the   development of the said           property          at<\/p>\n
    Worli,      Mumbai and that the balance equity shares                    of<\/p>\n
    the    Company    to the extent of 29,700 shares                (30,000<\/p>\n
    equity      shares of Rs.10\/- each less 300 shares issued<\/p>\n
    at    the    relevant time) were to be issued to these                     3<\/p>\n
    persons      and their nominees, so that after such issue<\/p>\n
    their    holding in the entire capital of Rs.3,00,000\/-\n<\/p>\n
    shall    be in the ratio of 34:33:33 respectively.                       It<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 11 –\n<\/p>\n
    was    contended      that   paragraph-2     of       the      agreement<\/p>\n
    provided      that    Shri Manohar T.Makhija shall                be     the<\/p>\n
    Chairman,      Shri    K.K.Motwani     shall be        the      Managing<\/p>\n
    Director      and Shri Ramesh T.Khanchandani shall be the<\/p>\n
    Director of the Appellant-Company.            In paragraph-4 it<\/p>\n
    was    provided that the parties to the said                   agreement<\/p>\n
    shall    contribute or arrange such loans and funds                        as<\/p>\n
    may    be    required for the purpose of paying                 for      the<\/p>\n
    property,       stamp    duty    and     other        expenses           and<\/p>\n
    development and construction cost.            In paragraph-8 it<\/p>\n
    was<\/p>\n
           provided that for the purpose of development                        of<\/p>\n
    the    said    property,     all   major    decisions           such       as<\/p>\n
    appointment      of Architects and sales policy shall                      be<\/p>\n
    taken unanimously.        However, other decisions shall be<\/p>\n
    taken by the Managing Director who shall be in-charge<\/p>\n
    of    the construction.       In paragraph-9 it was provided<\/p>\n
    that Shri K.K.Motwani and his nominees shall bring in<\/p>\n
    loans    and    deposits of Rs.6\/- crores and interest                       @<\/p>\n
    18%    per    annum will be paid by the Company                 thereon.\n<\/p>\n
    That,    Shri Manohar T.Makhija and his nominees                      shall<\/p>\n
    bring    in    loans    and deposits of Rs.9\/-             crores        and<\/p>\n
    interest      @ 18% per annum will be paid by the Company<\/p>\n
    thereon.       That    Shri Ramesh T.Khanchandani               and      his<\/p>\n
    nominees      shall bring in loans and deposits of Rs.9\/-\n<\/p>\n
    crores      and interest @ 18% per annum will be paid                      by<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                         – 12 –\n<\/p>\n
    the    Company      thereon.         It was     submitted        that      the<\/p>\n
    petitioner-Kunal            was a nominee of the aforesaid Shri<\/p>\n
    Ramesh T.Khanchandani and held 13% i.e.                    3,900 shares<\/p>\n
    out     of     33%      i.e.        9,900    shares      allotted            to<\/p>\n
    Khanchandani’s group.              The petitioner-Kunal initially<\/p>\n
    paid     an    amount        of     Rs.3,54,51,000\/-         which         was<\/p>\n
    equivalent        to    13\/33      of     Rs.9,00,00,000\/-          as     its<\/p>\n
    contribution           by    way    of     loans   and     deposit           to<\/p>\n
    participate        in the Worli project as a nominee of the<\/p>\n
    said Khanchandani group.                It was mutually agreed that<\/p>\n
    the payments of such interest to the participants was<\/p>\n
    nothing      but    an advance against their final                  profits<\/p>\n
    and    was adjustable against their shares in the final<\/p>\n
    profits      to    be distributed equally in the                 ratio       of<\/p>\n
    34:33:33      on    completion of the said            Worli       project.\n<\/p>\n
    That    neither        the K.K.Motwani group nor the                Manohar<\/p>\n
    T.Makhija      group took any interest at any time on the<\/p>\n
    advances      made by them to the Company and                  therefore,<\/p>\n
    subsequently        such      periodical payments          of     interest<\/p>\n
    earlier      made      to Shri Ramesh T.Khanchandani and                   his<\/p>\n
    nominees      including the petitioner were also stopped.\n<\/p>\n
    It    was    contended that the Worli Project                  could       not<\/p>\n
    take    off    because of various objections raised                      from<\/p>\n
    time    to    time      by     various      authorities.            Initial<\/p>\n
    objection      was      raised      to    the   development         on     the<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 13 –\n<\/p>\n
    property by the Coastal Zone Regulations.                   After that<\/p>\n
    objection      was    removed the Corporation           declined          to<\/p>\n
    grant     permission        and    was     claiming       amount          as<\/p>\n
    Corporation        premium.       With the result the land              was<\/p>\n
    not conveyed to the Appellant Company.<\/p>\n
\n\n\n\n\n                                                   \n    9.     That    as a result of undue delay in              having        the\n\n    land     conveyed      to    the     Appellant-       Company           and\n\n\n\n\n                                        \n    consequent      delays in granting approval of the plans,\n\n    the    Company had taken up the matter with the Finance\n\n    Minister      of\n                         \n                        India for recission of the contract                   of\n\n<\/pre>\n
    purchase of plot by the Company in the public auction<\/p>\n
    held    by the appropriate authority of the income                      tax<\/p>\n
    department      and has claimed refund of purchase                   price<\/p>\n
    together      with    interest      and     damages     for        losses<\/p>\n
    suffered      by    the Company.      The Finance Minister              had<\/p>\n
    sought    the opinion of the Attorney General of                     India<\/p>\n
    in    this    respect    to enable him to take            a    suitable<\/p>\n
    decision.       That the Appellant-Company was                expecting<\/p>\n
    disposal      of its complaint with the Finance                Minister<\/p>\n
    within next 3 to 4 months.            It was contended that the<\/p>\n
    Appellant-Company        was      legally obliged to refund               in<\/p>\n
    priority, the deposits of the prospective flat owners<\/p>\n
    who have booked the flats in the proposed building to<\/p>\n
    be    constructed      on the said plot of land             at     Worli,<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 14 –\n<\/p>\n
    Mumbai.       The    petitioner-Kunal as a nominee of                 Shri<\/p>\n
    Ramesh      T.Khanchandani group was duty bound to                   repay<\/p>\n
    to    the    Appellant-Company the amount paid to                  it     in<\/p>\n
    advance      by way of interest against the final profits<\/p>\n
    of    the    project to enable the          Appellant-Company             to<\/p>\n
    return      the deposits of the prospective flat                 owners.<\/p>\n
\n\n\n\n\n                                                   \n    That    the    Directors' reports from time to                time      had\n\n    dwelt    upon      all    the problems,      obstacles,        hurdles,\n\n\n\n\n                                        \n    hassles        and        issues       encountered            by        the\n\n    Appellant-Company          and the petitioner-Kunal was               well\n\n    aware    of\n                         \n                   the same.      That the petitioner-Kunal as                  a\n\n    nominee      of    Shri    Ramesh    T.Khanchandani         was      fully\n                        \n    briefed      about    the day to day developments,               matters\n\n    and    issues      faced    by the Company as the           said      Shri\n\n<\/pre>\n
    Ramesh T.Khanchandani was one of the directors of the<\/p>\n
    Company      and the Chairman Shri Manohar T.Makhija                    and<\/p>\n
    Managing      Director Shri K.K.Motwani were regularly in<\/p>\n
    touch    with      him    through     fax,    informal         meetings<\/p>\n
    whenever      he    came to Mumbai as also through               notices<\/p>\n
    for    the Directors’ meetings.            It was contended           that<\/p>\n
    neither      Shri    Ramesh    T.Khanchandani nor           any      other<\/p>\n
    shareholder or Director had raised any dispute of the<\/p>\n
    nature      raised    by    the     petitioner-Kunal.            It     was<\/p>\n
    contended      that the petitioner-Kunal’s claim for                    the<\/p>\n
    payment      of interest only to the petitioner-Kunal                     in<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 15 –\n<\/p>\n
    preference        to    the depositors and lenders              of     other<\/p>\n
    groups    as also Shri Ramesh T.Khanchandani himself to<\/p>\n
    whose    group      the      Petitioner-Kunal        belonged          as     a<\/p>\n
    nominee      was unjust complex and of triable nature                       as<\/p>\n
    such    interest was in any case adjustable against the<\/p>\n
    final    profits,        if    any,    of the    project.          It     was<\/p>\n
    contended      that      when    the    real    estate      market        had<\/p>\n
    totally      crashed, plans for construction of the Worli<\/p>\n
    property      not yet approved for the reasons                  aforesaid<\/p>\n
    and    the    Company’s        claim    against    the      income        tax<\/p>\n
    department        for<\/p>\n
                             interest and damages etc.               for      the<\/p>\n
    delays,       not      of    Company’s     making,      still        to     be<\/p>\n
    resolved,      it was neither justified nor possible                      for<\/p>\n
    the     Company         to     make      any     payment         to       the<\/p>\n
    Petitioner-Kunal            in respect of its loan\/deposits                 in<\/p>\n
    the    nature of its contribution for participating                         in<\/p>\n
    the    project      as also the interest in lieu                of     final<\/p>\n
    profits      in    preference not only to          contributors             of<\/p>\n
    other    groups but even the proposed flat owners.                          It<\/p>\n
    was    contended that the main asset of the Company was<\/p>\n
    the    said plot of land at Worli, Mumbai and the title<\/p>\n
    of    this    land      was    shrouded     in    the     mystery           of<\/p>\n
    bureaucratic        ways of working.        The said land was not<\/p>\n
    capable      of    being      transferred      unless     the      dispute<\/p>\n
    between the income tax department and the Corporation<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 16 –\n<\/p>\n
    was    resolved      and the land was duly conveyed to              the<\/p>\n
    Company.       That the Appellant-Company undertook               that<\/p>\n
    it will not transfer and\/or mortgage the said land to<\/p>\n
    any    outside party, save and except to surrender                  the<\/p>\n
    same    to the income tax department against return                   of<\/p>\n
    monies    paid      to it by the Appellant-Company as             also<\/p>\n
    compensation        in    the nature of loss of interest            and<\/p>\n
    damages      suffered by the Company because of breach of<\/p>\n
    the terms and conditions of the auction sale.                  It was<\/p>\n
    contended      that      the presentation of the      winding         up<\/p>\n
    petition      by    the
\n                           ig  petitioner-Kunal was a       device        to<\/p>\n
    pressurise      the Company to submit to an unjust               claim<\/p>\n
    and    that    the    Company Court was not the         forum       for<\/p>\n
    resolving      various complex and complicated            questions<\/p>\n
    like the nature of contributions by the participants,<\/p>\n
    adjustment      of    interest against future       profits         and<\/p>\n
    that    these      issues required thorough      investigation.\n<\/p>\n
    That    therefore,        the Court could not be required             to<\/p>\n
    investigate        several    complex facts and evidences             in<\/p>\n
    depth.       That the amount received by the Company from<\/p>\n
    the    petitioner-Kunal and other participants were for<\/p>\n
    the    purpose of purchase and development of the                 said<\/p>\n
    plot    of    land    at Worli and the main      asset       of     the<\/p>\n
    Company      was the said plot of land that was very much<\/p>\n
    in    existence.      There were no business losses as such<\/p>\n
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                                       – 17 –\n<\/p>\n
    suffered      by    the Company and therefore, it               was      not<\/p>\n
    possible      to    contend that the Company has               lost      its<\/p>\n
    substratum.         Therefore,      there    was no      question          of<\/p>\n
    winding    up      the    Company.     It was    averred        that       on<\/p>\n
    receipt    of      notice from the       petitioner’s          Advocate,<\/p>\n
    reference      was immediately made to Shri Sunil Mirpuri<\/p>\n
    and    Shri    Sunil      Mirpuri had assured that             he     would<\/p>\n
    convince      the    petitioner-Kunal        against       filing        any<\/p>\n
    winding    up      petition because the management                of     the<\/p>\n
    Company was strenuously working to save the financial<\/p>\n
    interests      of<\/p>\n
                         the Company as stated          above.          During<\/p>\n
    this    time    the      deponent had also to make             trips       to<\/p>\n
    Delhi    in connection with the follow up of the matter<\/p>\n
    lying    with the Finance Minister and hence the notice<\/p>\n
    of    the petitioner’s Advocate remained to be                    replied<\/p>\n
    which unfortunately resulted in exparte acceptance of<\/p>\n
    the    petition      by    this Court.      In view of         what      was<\/p>\n
    stated    in the reply, it was denied that the                    Company<\/p>\n
    was    liable to pay the amount claimed and that it was<\/p>\n
    just    and equitable that the Company should be                      wound<\/p>\n
    up.      That      Kunal    was    a   nominee    of     Shri       Ramesh<\/p>\n
    T.Khanchandani        group and one of the participants                    in<\/p>\n
    the    said project.        The amount advanced by it to                 the<\/p>\n
    Company    was agreed contribution simpliciter and                       not<\/p>\n
    the    amount      allegedly      lent     and   advanced         by     the<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 18 –\n<\/p>\n
    petitioner as held out by it.            It was denied that the<\/p>\n
    petitioner        was not given copies of annual               accounts,<\/p>\n
    directors’        and    auditor’ reports regularly and                that<\/p>\n
    therefore,        the    petitioner    was    unaware        about       the<\/p>\n
    present      status      of development of Worli property                  as<\/p>\n
    alleged      by    the petitioner.      It was      contended          that<\/p>\n
    Kunal      never    made    any such grievance prior              to     the<\/p>\n
    filing of the petition.          That the allegations made by<\/p>\n
    the    petitioner-Kunal were absurd and motivated.                         It<\/p>\n
    was    further      contended that the order of winding                    up<\/p>\n
    was    not    only<\/p>\n
                            injurious    to the    interests          of     the<\/p>\n
    proposed      flat owners, the shareholders and                 business<\/p>\n
    participants but in the aforesaid circumstances, when<\/p>\n
    the    matter      was lying for decision with the                Finance<\/p>\n
    Minister, it will not be beneficial and will not even<\/p>\n
    be    in    the    interest of the petitioner            itself.           On<\/p>\n
    behalf      of    the Company, leave was sought to file                    an<\/p>\n
    additional        affidavit supplementing the Company’s say<\/p>\n
    in    the matter if there were any further developments<\/p>\n
    therein      including the Company’s complaint lying                     for<\/p>\n
    disposal      with the Finance Minister.            On 1.2.1999            an<\/p>\n
    affidavit in rejoinder was affirmed by Mr.Shreepal S.\n<\/p>\n
    Dalal,      a partner of Kunal.        It was contended in this<\/p>\n
    rejoinder        that    the Appellant-Company         had      admitted<\/p>\n
    that       monies       were   due     and     payable          to       the<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 19 –\n<\/p>\n
    petitioner-Kunal        but    had raised a false            and      bogus<\/p>\n
    story    contrary      to the documents on record and                  that<\/p>\n
    the    defence was an afterthought.            Neither Kunal             nor<\/p>\n
    the    Appellant-Company        were a party to          the      alleged<\/p>\n
    agreement    or arrangement.          The alleged agreement                or<\/p>\n
    arrangement      was not binding on the           petitioner-Kunal<\/p>\n
    and    could not in any manner affect the liability                        of<\/p>\n
    the    Company    to Kunal.        That the issues raised              were<\/p>\n
    irrelevant    and      it    was    not    a   case      of     disputed<\/p>\n
    liability.       It    was    denied that      the     petition          was<\/p>\n
    malafide.     It<\/p>\n
                          was denied that the         petitioner-Kunal<\/p>\n
    has    deliberately      suppressed       any facts,         papers        or<\/p>\n
    documents with a view to seeking a quick remedy in an<\/p>\n
    inappropriate      forum.       It was denied that the                forum<\/p>\n
    was    inappropriate        and if at all there          was      anybody<\/p>\n
    misleading    the      court, it was the Company which                   had<\/p>\n
    put    forward a completely false, dishonest, bogus and<\/p>\n
    irrelevant    case      in order to dishonestly              evade       its<\/p>\n
    liability    and      to confuse the Court.           It was        denied<\/p>\n
    that    the petitioner has entered into a business deal<\/p>\n
    as one of the nominees of Shri Ramesh Khanchandani in<\/p>\n
    pursuance    of    the      agreement      dated      28.3.1994            or<\/p>\n
    otherwise.    That neither the petitioner-Kunal nor the<\/p>\n
    Company    was    a    party to the       said    agreement           dated<\/p>\n
    28-3-1994     and       therefore,        said      agreement            was<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 20 –\n<\/p>\n
    irrelevant.         It    was contended that Kunal             had     lent<\/p>\n
    money    to the Company and had nothing to do with                       the<\/p>\n
    business      deal or any agreement entered into                  between<\/p>\n
    Motwani,      Makhija      and Khanchandani.         It    was      denied<\/p>\n
    that the Company’s relation with the petitioner-Kunal<\/p>\n
    was    not    that    of a borrower and lender.                That      the<\/p>\n
    documents      on record clearly proved beyond doubt that<\/p>\n
    relationship        of the Petitioner-Kunal and Company was<\/p>\n
    that of a borrower and lender.             It was contended that<\/p>\n
    the agreement dated 28-3-1994 had no relevance to the<\/p>\n
    petition<\/p>\n
                  and deliberately sought to be introduced to<\/p>\n
    confuse      the    matter.      That the terms        of      the     said<\/p>\n
    agreement          were      neither          binding          on        the<\/p>\n
    petitioner-Kunal          nor the company, nor did it any way<\/p>\n
    affects      the    liability of the Company to Kunal.                     It<\/p>\n
    was submitted that the petitioners were allotted 3900<\/p>\n
    shares    as    the      petitioners could give a loan                to     a<\/p>\n
    private       limited       company     only      if       they        were<\/p>\n
    shareholders.        It was contended that Kunal’s name was<\/p>\n
    not    mentioned as a nominee in the alleged                   agreement<\/p>\n
    dated    28.3.1994.         It was averred that           3900      shares<\/p>\n
    were    allotted to the Petitioners as they had                     agreed<\/p>\n
    to    lend monies to the Company and not as nominees of<\/p>\n
    Shri    Ramesh      T.Khanchandani.        It    was      denied       that<\/p>\n
    Rs.3,54,51,000\/-          were   paid    by    the    Kunal       as     its<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 21 –\n<\/p>\n
    contribution         by    way   of     loans    and     deposit           to<\/p>\n
    participate      in the Worli project as a nominee of the<\/p>\n
    Khanchandani      group.       It was reiterated that the said<\/p>\n
    amount    was lent and advanced as and by way of a loan<\/p>\n
    which    was repayable together with interest @ 18% per<\/p>\n
    annum    with quarterly rests.           It was reiterated             that<\/p>\n
    the    petitioner      had     refunded part of the            loan      and<\/p>\n
    interest      thereon @ 18% p.a.         and that these payments<\/p>\n
    were not by way of advance against any future profits<\/p>\n
    as    falsely alleged.         That the notices to the Company<\/p>\n
    went un-replied.\n<\/p>\n
                          ig  That there was no agreement entered<\/p>\n
    into by Kunal regarding distribution of profit or the<\/p>\n
    adjustment      as    alleged or otherwise.           It was        denied<\/p>\n
    that    the    amounts      paid     to Kunal    were      by     way      of<\/p>\n
    interest against the ‘final profit of the project’ as<\/p>\n
    alleged.       It was denied that the petitioner-Kunal as<\/p>\n
    an    alleged    nominee or otherwise was liable to                    make<\/p>\n
    any payment or repayment to the Company to return the<\/p>\n
    alleged    deposit        of   the    alleged    prospective           flat<\/p>\n
    owners    or    for any other reason.           It    was      contended<\/p>\n
    that    it was absurd and unbelievable that any                     person<\/p>\n
    would    book a flat and pay a deposit to the developer<\/p>\n
    for    a project even without approval of the plans                        by<\/p>\n
    the Municipal Corporation.             It was contended that the<\/p>\n
    management of the Company, with a view to defraud the<\/p>\n
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                                       – 22 –\n<\/p>\n
    creditors        like      the petitioner and deprive               them       of<\/p>\n
    their    legitimate dues and to siphon off the                        amounts<\/p>\n
    from    the Company, created false and bogus                       liability<\/p>\n
    in    the    books of accounts of the Company by                      showing<\/p>\n
    bogus    sales        of    the flats and      this       indicated          the<\/p>\n
    dis-honest        intention of the Company.               It was        prayed<\/p>\n
    that    the      Court      should    call upon       the      Company         to<\/p>\n
    produce      all      the    relevant       documents        and      records<\/p>\n
    regarding        the    alleged sale.        It was contended              that<\/p>\n
    the     petitioner’s          claim    was    in    respect         of       the<\/p>\n
    repayment<\/p>\n
                     of the loan together with interest and was<\/p>\n
    not    in    any      manner what-so-ever dependent                 upon       or<\/p>\n
    linked to the Company making a profit or repaying the<\/p>\n
    depositors        and      lenders    of    other     groups        as     also<\/p>\n
    Mr.Ramesh        Khanchandani.         It    was    denied         that      the<\/p>\n
    petitioner’s claim was unjust, complex and triable in<\/p>\n
    nature.          It    was    contended       that      Kunal       was      not<\/p>\n
    concerned        with the alleged financial difficulties of<\/p>\n
    the    Company        and that the facts indicated                 that      the<\/p>\n
    Company      was      unable to pay its debts and                should        be<\/p>\n
    wound    up.      It was denied that the amount paid by the<\/p>\n
    Kunal       to    the      Company     was    agreed         contribution<\/p>\n
    simpliciter.          The other contentions made on behalf of<\/p>\n
    the    Company were also denied and it was stated                          that<\/p>\n
    the Company had no defences whatsoever.\n<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span><\/p>\n
                                     – 23 –\n<\/p>\n
    10.    The company petition No.726 of 1998 was heard by<\/p>\n
    the    learned single Judge of this Court for admission<\/p>\n
    on    12-2-1999.       The   learned single Judge            passed        a<\/p>\n
    conditional       order directing the Appellant-company to<\/p>\n
    deposit     an    amount of Rs.3,91,54,539\/- within                 eight<\/p>\n
    weeks    from the date of the order, failing which                     the<\/p>\n
    company     petition was to stand admitted.              Against the<\/p>\n
    order    of    the    admission, an appeal         was     preferred,<\/p>\n
    which    was     registered as Appeal No.401 of 1999.                    By<\/p>\n
    order    dated<\/p>\n
                       9-4-1999, the Appellate Bench              extended<\/p>\n
    the    period     for depositing the amount by             one      week.\n<\/p>\n
    The    amount     was not deposited.       The Division           Bench,<\/p>\n
    thereafter,       heard the appeal and summarily dismissed<\/p>\n
    the    same by order dated 20-4-1999.           After        admission<\/p>\n
    of    the   petition it was advertised and an                affidavit<\/p>\n
    proving publication of the admission was filed.\n<\/p>\n
    11.     During the pendency of Company Petition                   No.726<\/p>\n
    of    1998 in this court, a Company Petition No.171                      of<\/p>\n
    2000    was    filed    by Mr.Tarachand       H.     Khanchandani.\n<\/p>\n
    (Hereinafter         referred     to     as    the       Petitioner-\n<\/p>\n
    Tarachand).        It was averred in the petition that                   on<\/p>\n
    or     about     15.4.1994,     on   a   request     made       by     the<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 24 –\n<\/p>\n
    Appellant      Company      to    provide    temporary             financial<\/p>\n
    assistance to fulfil and discharge its liabilities to<\/p>\n
    acquire      and    purchase an immovable property being                         a<\/p>\n
    plot    at    Worli      on auction sale by           the      appropriate<\/p>\n
    authority      under      the Income Tax Act and for                  meeting<\/p>\n
    the    consideration        price    of    Rs.21,75,00,000\/-                 the<\/p>\n
    petitioner-Tarachand             provided    advances               to       the<\/p>\n
    Appellant-Company          in the sum of Rs.4,08,99,000\/-                      by<\/p>\n
    way     of     temporary         financial       assistance.                 The<\/p>\n
    Appellant-Company          had    agreed to pay interest @                   18%<\/p>\n
    p.a.     on<\/p>\n
                   the amount so advanced and the                    amount        so<\/p>\n
    advanced      was duly acknowledged by the Company.                        That<\/p>\n
    on 1.4.1996 a sum of Rs.3,47,83,435\/- was outstanding<\/p>\n
    as     due     and      payable    by     the    Company            to       the<\/p>\n
    petitioner-Tarachand.            The Company had shown the said<\/p>\n
    outstanding        amount as due in their books of                    account<\/p>\n
    as    credit    to      the loan account        of      the      petitioner<\/p>\n
    Tarachand          to      the          Company.             Since           the<\/p>\n
    Appellant-Company          was in financial difficulties                     and<\/p>\n
    unable    to pay the said outstanding dues and interest<\/p>\n
    at the aforesaid rates of 18% for the period 1.4.1995<\/p>\n
    to    31.3.1996, the Company agreed to pay interest                            by<\/p>\n
    its    letter      dated    27.3.1996      and    confirmed             having<\/p>\n
    credited the amount of Rs.56,35,006\/- after deducting<\/p>\n
    a    sum of Rs.6,26,012\/- as TDS @ 10% as interest                           for<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 25 –\n<\/p>\n
    the    period      from 1.4.1995 to 31.3.1996 in                the      loan<\/p>\n
    account      of the petitioner Tarachand as shown in                      its<\/p>\n
    books    of    account      and further      confirmed          that      the<\/p>\n
    outstanding          loan        as        on      31.3.1996              was<\/p>\n
    Rs.4,04,18,441\/-.           The    company      also issued          a    TDS<\/p>\n
    certificate        dated 10.6.1996 confirming the aforesaid<\/p>\n
    facts.      That inspite of repeated requests and demands<\/p>\n
    and    though promises were made, the Appellant-Company<\/p>\n
    avoided,      failed      and    neglected to      repay        the      said<\/p>\n
    outstanding        amount nor did the Company paid interest<\/p>\n
    at    the<\/p>\n
                 aforesaid rate payable at the end                  of     every<\/p>\n
    year.       That the Company had admitted, confirmed                      and<\/p>\n
    acknowledged        its liability to pay the said amount to<\/p>\n
    the    petitioner-Tarachand in its accounts and balance<\/p>\n
    sheets      published for the years upto 20.6.1998.                       The<\/p>\n
    petitioner Tarachand contended that he was one of the<\/p>\n
    shareholders        of    the    Company    and as      such       he     was<\/p>\n
    entitled      to    receive      notice of the       annual        general<\/p>\n
    meetings as also copies of the annual accounts of the<\/p>\n
    Company      every year.        He however, did not receive any<\/p>\n
    such    notice      or    a copy of annual accounts              for      the<\/p>\n
    period from 1.4.1998.            Therefore, he was not aware of<\/p>\n
    the      present          financial         position            of        the<\/p>\n
    Appellant-Company          save as what was stated earlier in<\/p>\n
    the    petition.         That    as   recorded       in     the      annual<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 26 –\n<\/p>\n
    accounts and statements of liabilities for the period<\/p>\n
    ended    31.3.1998,      it was seen that the            Company         was<\/p>\n
    heavily indebted to its creditors including unsecured<\/p>\n
    creditors.      That the company was not going to develop<\/p>\n
    the    said    property     and in    the      circumstances,            the<\/p>\n
    petitioner-Tarachand         had    lost      confidence        and      was<\/p>\n
    therefore      seeking winding up of the Company on                    just<\/p>\n
    and equitable ground also.           That the acts of omission<\/p>\n
    and    commission      on   the    part    of    the     Company         and<\/p>\n
    particularly      of    its director Shri Motwani               who      has<\/p>\n
    been<\/p>\n
            in charge of the affairs of the Company were so<\/p>\n
    gross that the said Company had defrauded the various<\/p>\n
    creditors      of the Company.       To the best knowledge                 of<\/p>\n
    Tarachand,      the    Company     had    so    far    not      obtained<\/p>\n
    sanction      of plans, secured the issue of commencement<\/p>\n
    certificate      and    other      orders\/approvals            from      the<\/p>\n
    concerned      authorities      and therefore, there were                  no<\/p>\n
    chance      of commencing and completing the               development<\/p>\n
    of    the    property    purchased       in    auction       from        the<\/p>\n
    Income-tax      department.        That    the Company          had      not<\/p>\n
    shown    readiness and willingness to take                 appropriate<\/p>\n
    steps    for    the    purpose of development of               the     said<\/p>\n
    property.       The company had not given any proposal to<\/p>\n
    this     Court     in    the      pending       Company         Petition<\/p>\n
    No.726\/1998      to    discharge     its       liability        to       its<\/p>\n
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                                     – 27 –\n<\/p>\n
    creditors.      The petitioner-Tarachand apprehended that<\/p>\n
    if    the said Company succeed in obtaining a refund of<\/p>\n
    the    amount    of    auction price        from      the      Income-tax<\/p>\n
    department,      such    amount will be siphoned                 away      and<\/p>\n
    none    of    the    creditors will get a return                 of     their<\/p>\n
    amount      and claim towards interest or the Company may<\/p>\n
    refund      the said amount to its selected creditors                        to<\/p>\n
    the    prejudicial      interest      of     others.           That        the<\/p>\n
    property      was    lying    vacant       and   no        construction<\/p>\n
    activity had started.\n<\/p>\n
    12.    In the affidavit in reply filed on behalf of the<\/p>\n
    Appellant-company        in Company Petition No.171 of 2000<\/p>\n
    the    same    defences as were raised in reply filed                        in<\/p>\n
    Company      Petition    No.726 of 1998 were             raised.           The<\/p>\n
    Company      Petition No.171 of 2000 was admitted in view<\/p>\n
    of    the    admission of the Company Petition No.726                        of<\/p>\n
    1998.       During    the    pendency       of   these         petitions,<\/p>\n
    additional      affidavits      were filed on behalf                of     the<\/p>\n
    Appellant       Company       as    also    on   behalf           of       the<\/p>\n
    Petitioners.         In those additional affidavits more or<\/p>\n
    less    the facts which were stated in the affidavit in<\/p>\n
    reply    initially      filed      were     reiterated           and     some<\/p>\n
    additional facts were also disclosed.                   The additional<\/p>\n
    facts    which      were stated in the affidavit were                    that<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 28 –\n<\/p>\n
    the    understanding as to the contribution to be                     made<\/p>\n
    by    the    three    groups and the manner          in     which       the<\/p>\n
    interest      accrued    thereon     was to be       adjusted,          was<\/p>\n
    reflected      in the Minutes of Meeting of the Board                     of<\/p>\n
    Directors      of the Appellant-Company held on 24-1-1994<\/p>\n
    at     which    Mr.Shripal      Dalal     the    partner         of     the<\/p>\n
    Petitioner-Kunal was present.            It was averred that it<\/p>\n
    was agreed in the said meeting that the understanding<\/p>\n
    reached      between    the    parties would       be     reduced         to<\/p>\n
    writing      and that the agreements in this behalf would<\/p>\n
    be     drawn     up<\/p>\n
                           by     the    Advocate        Mr.D.H.Harish.\n<\/p>\n
    Accordingly      the agreements were drawn up by the said<\/p>\n
    Advocate.       It was also disclosed that a part of                    the<\/p>\n
    contribution      of Khanchandani group and Makhija group<\/p>\n
    were refunded from out of the funds received from the<\/p>\n
    prospective      purchasers      of the flats.        It      was     also<\/p>\n
    contended      that    after admission of Company              Petition<\/p>\n
    No.726      of 1998, discussions were held between                   three<\/p>\n
    groups to seek a way out of the impasse by selling or<\/p>\n
    developing      the    plot of land at Worli which was                  the<\/p>\n
    only    substantial asset of the Appellant Company.                       It<\/p>\n
    was    claimed    that      in or about    November,          2004      the<\/p>\n
    Petitioners      in the Company petitions indicated                   that<\/p>\n
    they    had a proposal from a party for the purchase of<\/p>\n
    the    said    plot    of land.     In this     behalf,        Mr.Dalal<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                         – 29 –\n<\/p>\n
    addressed        a   letter       dated 23-11-2004         to      Mr.Ramesh<\/p>\n
    Khanchandani setting out the nature of the offer.                              It<\/p>\n
    appears      that      an    offer    of   Rs.18      crores        for      the<\/p>\n
    property was received from the “reliable party”.                             The<\/p>\n
    said    letter indicated the total contribution made by<\/p>\n
    member      of    each group after taking into account                       the<\/p>\n
    amounts      that      had been refunded to the              Khanchandani<\/p>\n
    group and Makhija group.              In view of the fact that an<\/p>\n
    amount      of    about Rs.16 crores will be available                       for<\/p>\n
    distribution,          it    was    suggested      that        each       party<\/p>\n
    including        the<\/p>\n
                            persons who had booked flats                  in     the<\/p>\n
    said    building, accept a pro rata distribution of the<\/p>\n
    said    amount of Rs.16 crores.              The proposed pro              rata<\/p>\n
    distribution         was     in the handwritten notes that                   was<\/p>\n
    annexed to the letter.              On the basis of this pro rata<\/p>\n
    distribution         the     Petitioners      were      to     receive         an<\/p>\n
    amount      of Rs.1.2 crores.          It was contended on behalf<\/p>\n
    of    the    Appellant company that the contents                      of     the<\/p>\n
    letter and the hand written notes fully confirmed the<\/p>\n
    understanding          that has been pleaded by the Appellant<\/p>\n
    company      amongst        the    three     groups.         By       further<\/p>\n
    affidavit        dated      17-10-2005 affirmed by Mr.Dalal                    on<\/p>\n
    behalf      of the Petitioner-Kunal, the balance sheet of<\/p>\n
    the    Appellant company for the year 1994-95 till                           the<\/p>\n
    year 2003-04 were placed on record in order to enable<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 30 –\n<\/p>\n
    the court to appreciate the financial position of the<\/p>\n
    company.       In the affidavit dated 21-9-2005               affirmed<\/p>\n
    by    Mr.S.S.Dalal,        it   was   stated   that      during        the<\/p>\n
    pendency      of    the petitions as offer for purchase                  of<\/p>\n
    the flats was received by the company, a proposal was<\/p>\n
    prepared      for    sharing     of the sale-proceeds           of     the<\/p>\n
    flats    by    all the creditors of the company               on     pari<\/p>\n
    pasu     basis,      but    nothing     came   out     from         those<\/p>\n
    negotiations.         It    appears that in addition            to     the<\/p>\n
    various affidavits filed by the parties, on behalf of<\/p>\n
    the    Petitioners
\n                          iga    compilation of     documents           dated<\/p>\n
    13-11-2006      including balance sheets of the Appellant<\/p>\n
    company for the year 1994, 1995, 1996, 1997, 1998 and<\/p>\n
    2004    was    filed.      The original minutes books of               the<\/p>\n
    company were also tendered and taken on record.                      Both<\/p>\n
    the    petitions were heard by the learned single Judge<\/p>\n
    and    by his detail judgment, the learned single Judge<\/p>\n
    allowed      both the petitions in terms of prayer clause<\/p>\n
    (a) with costs.\n<\/p>\n
    13.     Feeling      aggrieved by the order of the              learned<\/p>\n
    single    Judge , these two appeals have been filed                      by<\/p>\n
    the Company challenging that order.\n<\/p>\n
    14.     It    is clear from the record that an order                   for<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 31 –\n<\/p>\n
    winding      up of the Appellant company has been made by<\/p>\n
    the    learned      single Judge on two grounds;             (1)     that<\/p>\n
    the    company is unable to pay its debts and (2) it is<\/p>\n
    just and equitable to wind up the Appellant company.\n<\/p>\n
    15.     We    propose      to take up for    consideration             the<\/p>\n
    contentions        of the learned Counsel appearing for the<\/p>\n
    Appellant      that    the    learned single      Judge       was      not<\/p>\n
    justified      in    ordering winding up of         the      Appellant<\/p>\n
    company      on the ground that it is just and               equitable<\/p>\n
    to    wind    up    the
\n                           ig   Appellant-company.         The      learned<\/p>\n
    Counsel submitted that the learned single Judge could<\/p>\n
    not    have    considered the material which has come                    on<\/p>\n
    record    because      of the affidavits filed by both                 the<\/p>\n
    parties,      but    should have restricted himself to                 the<\/p>\n
    averments      in the petitions and the material                brought<\/p>\n
    on record in support of those averments.                 The learned<\/p>\n
    Counsel submitted that so far as the averments in the<\/p>\n
    petitions      are concerned, an order for winding up                    of<\/p>\n
    the    Appellant company on the ground that it is                    just<\/p>\n
    and    equitable      to wind up the Appellant           company         is<\/p>\n
    impossible      to    be    made.   It was   claimed         that      the<\/p>\n
    Petitioners        were the share holders of the             Appellant<\/p>\n
    company      and    they    have not received notice            of     the<\/p>\n
    annual    general meeting of the company and they                    have<\/p>\n
                                                   ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                 – 32 –\n<\/p>\n
    also    not received the annual accounts of the company<\/p>\n
    every year and that they have been kept in total dark<\/p>\n
    about    the developments of the said property at Worli<\/p>\n
    purchased    by   the company, and therefore, they            have<\/p>\n
    lost    confidence   of   the present management         of     the<\/p>\n
    company.     The learned counsel submits that, however,<\/p>\n
    the    learned single Judge has considered the material<\/p>\n
    which    has come on record, which does not necessarily<\/p>\n
    support    the averments in the petition in relation to<\/p>\n
    just    and equitable ground.    In the submission of the<\/p>\n
    learned    counsel
\n                       igthis   is   impermissible.          In     our<\/p>\n
    opinion, however, the submission is not well founded.\n<\/p>\n
    The Supreme Court in its judgment in the case of Hind<\/p>\n
    Overseas     Pvt.Ltd.        v\/s.     Raghunath            Prasad<\/p>\n
    Jhunjhunwalla     and anr, AIR 1976 SC 565 in         paragraph<\/p>\n
    35 has observed thus:-\n<\/p>\n
              “…….    It is now well established that,
\n              the   sixth    clause,  namely,   ‘just   and<\/p>\n
              equitable’ is not to be read as being ejusdem
\n              generis with the preceding five clauses.
\n              While the five earlier clauses prescribe
\n              definite conditions to be fulfilled for the
\n              one or the other to be attracted in a given
\n              case, the just and equitable clause leaves<\/p>\n
              the entire matter to the wide and wise
\n              judicial discretion of the court. The only
\n              limitations are the force and content of the
\n              words themselves, ‘just and equitable’.\n<\/p><\/blockquote>\n
    The court in paragraph 42 has further observed that:\n<\/p>\n
                                            ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span><\/p>\n
                                   – 33 –\n<\/p><\/blockquote>\n
                “42.   It is not a proper principle        to
\n                encourage hasty petitions of this nature
\n                without first attempting to sort out the<\/p>\n
                dispute and controversy between the members
\n                in the domestic forum in conformity with the
\n                articles of association.      There must be<\/p>\n
                materials to show when ‘just and equitable’
\n                clause is invoked, that it is just and
\n                equitable not only to the persons applying
\n                for winding up but also to the company and to
\n                all its shareholders. The company court will<\/p>\n
                have to keep in mind the position of the
\n                company as a whole and the interests of the
\n                shareholders and see that they do not suffer
\n                in a fight for power that ensues between two
\n                groups.”\n<\/p><\/blockquote>\n
    16.     It is, thus, clear from the observations of the<\/p>\n
    Supreme      Court<\/p>\n
                          quoted above that when the        court       is<\/p>\n
    considering the question whether it is appropriate to<\/p>\n
    make    an order for winding up of the company, because<\/p>\n
    it    is just and equitable to wind up the company, the<\/p>\n
    court    has to take into consideration the position of<\/p>\n
    the company as a whole and it has to keep in mind the<\/p>\n
    interest      of all the shareholders of the company.               In<\/p>\n
    other words, when the court is considering a petition<\/p>\n
    seeking      an order for winding up of a company on just<\/p>\n
    and    equitable ground, the court cannot shut its                eye<\/p>\n
    to    the    material brought before it and exclude             that<\/p>\n
    material from consideration only because there are no<\/p>\n
    averments      in the petition in that regard.          No doubt,<\/p>\n
    while    taking      the material which has come on          record<\/p>\n
    into    consideration      the court will have to see           that<\/p>\n
                                              ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 34 –\n<\/p>\n
    the    company against whom the material is to be                     used<\/p>\n
    is    given an opportunity to submits its point of view<\/p>\n
    in    relation     to    that material.       In so     far      as     the<\/p>\n
    present      petition is concerned, the material that has<\/p>\n
    been    placed     on    record and which       is    relevant          for<\/p>\n
    making an order for winding up of the company on just<\/p>\n
    and    equitable      ground    has    come    from     the      company<\/p>\n
    itself.       There is also no complaint that the company<\/p>\n
    was    not given an opportunity to submits its point of<\/p>\n
    view    in    relation to the material.          In our        opinion,<\/p>\n
    therefore,      the<\/p>\n
                            learned single Judge         was      perfectly<\/p>\n
    justified      in considering the entire material.                   It is<\/p>\n
    the    case    of the Appellant company itself                that      the<\/p>\n
    company      was   incorporated in the year 1982, and                   its<\/p>\n
    authorised      share capital was only Rs.3 lakh.                    There<\/p>\n
    is    no   material      on   record     to    show     that       before<\/p>\n
    purchasing      the     Worli property in March,            1994,       the<\/p>\n
    company      had carried on any business of             construction<\/p>\n
    of building.       It is, thus, clear from the record that<\/p>\n
    the    only tangible assets of the company is the Worli<\/p>\n
    property, for which the company had paid an amount of<\/p>\n
    Rs.21.75      crores     to the income-tax department.                  The<\/p>\n
    admitted position is that despite expiry of 25 years,<\/p>\n
    even    the    title to this property is not acquired                     by<\/p>\n
    the    company.     In 1998, the Appellant company                 itself<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 35 –\n<\/p>\n
    has    addressed a letter to the Finance Minister dated<\/p>\n
    10-6-1998.       In that letter, it was claimed on behalf<\/p>\n
    of    the company that there is an ab-initio difficulty<\/p>\n
    in    the title of the property, and therefore, it                         was<\/p>\n
    stated    “In the circumstances stated above, we are no<\/p>\n
    more interested in the plot purchased by us.                        You are<\/p>\n
    requested      to    personally      look into the           matter        and<\/p>\n
    direct    the    Income-tax        authority        to     refund          the<\/p>\n
    principal      amount together with interest at the                      very<\/p>\n
    early date.”\n<\/p>\n
    17.     This    letter has been placed on record                    by     the<\/p>\n
    Appellant-company          itself along with the affidavit of<\/p>\n
    Mr.K.K.Motwani dated 16-11-2006.              There is nothing on<\/p>\n
    record    to show that this request made by the company<\/p>\n
    for     return      of    the     property    to      the      Income-tax<\/p>\n
    Department      has      at    any time been withdrawn              by     the<\/p>\n
    company.       It    is the case of        the   Appellant-company<\/p>\n
    itself     that      the      amounts    were    advanced           by     the<\/p>\n
    Petitioners      in      these two company petitions for                   the<\/p>\n
    development      of      the    Worli   property,        because         they<\/p>\n
    wanted    to    participate in the profits that would                        be<\/p>\n
    made    on development of the Worli property.                     Now,       if<\/p>\n
    it    is the case of the Appellant-company itself                        that<\/p>\n
    it    is in no position to develop the property because<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                      – 36 –\n<\/p>\n
    there    is an ab-initio difficulty in the title to the<\/p>\n
    property and that it is claiming refund of money paid<\/p>\n
    to   the Income-tax Department, in our opinion, it                        is<\/p>\n
    safe    to    assume that the substratum of             the      company<\/p>\n
    itself     would       disappear,    and     therefore,        in       our<\/p>\n
    opinion,      no    fault can be found with the             conclusion<\/p>\n
    reached      by the learned single Judge that the company<\/p>\n
    is   liable       to    be   wound up on     just    and      equitable<\/p>\n
    ground.       We    find that the learned single Judge                  was<\/p>\n
    perfectly justified in recording a finding that there<\/p>\n
    is<\/p>\n
         variance of stand taken by the             Appellant-company<\/p>\n
    from    time to time and the position that is                  revealed<\/p>\n
    by   the     audited balance sheet of the            company.           The<\/p>\n
    learned      single      Judge has referred to the            affidavit<\/p>\n
    dated    7-3-2007        filed   on behalf     of    the      Appellant<\/p>\n
    company      in    Company Petition No.171 of 2000 and                  has<\/p>\n
    observed      that in that affidavit a statement was made<\/p>\n
    that five persons have advanced money for purchase of<\/p>\n
    the flats.        However, the balance sheet of the company<\/p>\n
    shows    that      10    persons    had    advanced     amounts         for<\/p>\n
    purchase      of    flats.     It is further to be          seen      here<\/p>\n
    that    the learned single Judge has noted that in                      the<\/p>\n
    balance      sheet a sum of Rs.6,35,30,972\/- was shown as<\/p>\n
    advance      towards      allotment of the flat made             by     one<\/p>\n
    Mr.Lal     M.      Daryanani.      Mr.Motwani in the          affidavit<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 37 –\n<\/p>\n
    filed    in this court admitted that out of the                  amount<\/p>\n
    of    Rs.6,35,30,972\/-        only a sum of    Rs.1,24,00,000\/-\n<\/p>\n
    was    the advance received towards allotment of                   flat.\n<\/p>\n
    The    balance      amount of Rs.5,11,30,972\/- was             brought<\/p>\n
    into    the    company as Motwani’s contribution               towards<\/p>\n
    the      project.           Similarly,       the      amount            of<\/p>\n
    Rs.1,24,00,000\/-        was    shown in the balance sheet               as<\/p>\n
    advance    paid by Mr.K.K.Motwani towards the allotment<\/p>\n
    of    the flat.      But it was stated on affidavit that it<\/p>\n
    was    actually      Mr.K.K.Motwani’s contribution             towards<\/p>\n
    the    project<\/p>\n
                        under    the agreement    dated       28-3-1994.\n<\/p>\n
    After    having      gone through the record        carefully           we<\/p>\n
    find    that    the    learned single Judge        was      perfectly<\/p>\n
    justified      in    holding    that   the   company        has     been<\/p>\n
    maintaining false record and fabricating the records.\n<\/p>\n
    The    managing director of the company was               courageous<\/p>\n
    enough    to    file    an affidavit stating that            what       is<\/p>\n
    shown    in    the    balance sheet of the company             is     not<\/p>\n
    correct    without      giving any explanation          how      income<\/p>\n
    statement      came to be made in the balance sheet,                  and<\/p>\n
    still    the    company argued before us that it was                  not<\/p>\n
    just    and equitable to wind up the company.                We     find<\/p>\n
    that    there    is substance in the submission              made       on<\/p>\n
    behalf    of    the Petitioners in the company              petition,<\/p>\n
    that    the    records were fabricated by the company                   to<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 38 –\n<\/p>\n
    show    that substantial amounts were received from the<\/p>\n
    flat    purchasers, when no such amounts were               actually<\/p>\n
    received,      so    as to deny payment to the persons               who<\/p>\n
    have advanced loans to the company.\n<\/p>\n
    Taking overall view of the matter, in our opinion, no<\/p>\n
    exception      can    be taken to the order of the            learned<\/p>\n
    single      Judge directing winding up of the company                  on<\/p>\n
    the    ground that it is just and equitable to wind                    up<\/p>\n
    the company.\n<\/p>\n
    18.     Now,    taking up the other ground on            which       the<\/p>\n
    winding up of the Appellant company has been ordered,<\/p>\n
    namely      inability     of the company to pay        its      debts,<\/p>\n
    there    is    no    dispute between the parties           that      the<\/p>\n
    amounts      have    been received from the Petitioners                in<\/p>\n
    both    the company petitions by the Appellant company.\n<\/p>\n
    It is not in dispute that interest at the rate of 18%<\/p>\n
    p.a.    was payable on those amounts.         There is also no<\/p>\n
    dispute      that    so   far   as the   Petitioner        Kunal       is<\/p>\n
    concerned,      a part of principal and interest for some<\/p>\n
    time has been paid by the company to that Petitioner.\n<\/p>\n
    It is also not in dispute that interest on the amount<\/p>\n
    advanced by the Petitioner Tarachand was also paid to<\/p>\n
    him    by    the Appellant-company.       The sole defence             of<\/p>\n
                                                 ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 39 –\n<\/p>\n
    the    company in this regard is that what was advanced<\/p>\n
    by    the Petitioners in both the company petitions was<\/p>\n
    not    loan,      but    it was their contribution              as     share<\/p>\n
    holders      of    the company for the development                 of     the<\/p>\n
    Worli    property        and    for that purpose        reliance          was<\/p>\n
    placed       on    the    agreement       dated    28-5-1994,             the<\/p>\n
    resolution        of the company etc.        But the company              has<\/p>\n
    not    given      any explanation as to why in              the      letter<\/p>\n
    dated    7-6-1994 addressed to the Petitioner-Kunal                         it<\/p>\n
    is    stated that an amount of Rs.39,40,000\/- is                       being<\/p>\n
    paid    “towards<\/p>\n
                            refund of loan” and why in              the     same<\/p>\n
    letter      it is stated that an amount of              Rs.9,31,707\/-\n<\/p>\n
    is    being    paid      by     the    Appellant-company           to     the<\/p>\n
    Petitioner         Kunal       “on    your   loan       amount          upto<\/p>\n
    31-5-1994”.         It    is also not explained as to why                   in<\/p>\n
    the    letter      dated 27th March, 1996 addressed by                    the<\/p>\n
    Appellant-company          to    the    Petitioner      Kunal        it     is<\/p>\n
    stated<\/p>\n
         “Re:     Payment of interest on your loan account<\/p>\n
                  with us.\n<\/p>\n
                 This is to inform you that a sum of<\/p>\n
                 Rs.2,25,11,451\/- was outstanding in our<\/p>\n
                 books of accounts as a credit to your<\/p>\n
                 loan account with us as on 1\/4\/1995.”\n<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span><\/p>\n
                                    – 40 –\n<\/p>\n
    In    the    same    letter it is further stated         “The      net<\/p>\n
    interest      amount of Rs.36,46,855\/- has been           credited<\/p>\n
    to    your loan account and the outstanding loan amount<\/p>\n
    as    on    31\/3\/1996 stands at     Rs.2,61,58,306\/-“.             The<\/p>\n
    Appellant-company has also not explained as to why in<\/p>\n
    its     letter      dated   27-3-1996   addressed         to       the<\/p>\n
    Petitioner-Tarachand it states:\n<\/p>\n
         “Re:     Payment of interest on your loan account<\/p>\n
                  with us.\n<\/p><\/blockquote>\n
                 This is to inform you that a sum of<\/p>\n
                 Rs.3,47,83,435\/- was outstanding in our<\/p>\n
                 books of accounts as a credit to your<\/p>\n
                 loan account with us as on 1.4.1995.”\n<\/p><\/blockquote>\n
    19.    What is further pertinent to be noted is that in<\/p>\n
    the balance sheet of the year ending with 31st March,<\/p>\n
    1997    the    names     of both the Petitioners       are      shown<\/p>\n
    under      the column “unsecured loans”.      The same is the<\/p>\n
    position      with    the   balance sheet ending       with      31st<\/p>\n
    March,      1998.    In the face of these documents and              no<\/p>\n
    explanation is being offered by the Appellant-company<\/p>\n
    as to why when the amount advanced by the Petitioners<\/p>\n
    towards their contribution for the development of the<\/p>\n
                                               ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                     – 41 –\n<\/p>\n
    property      in the balance sheet of the company and                        in<\/p>\n
    the    letters    addressed      to     these       Petitioners            was<\/p>\n
    described as ‘a loan’.          In our opinion, therefore, it<\/p>\n
    is clear that the defence put up by the company about<\/p>\n
    there    being an agreement between three groups is                          an<\/p>\n
    after    thought and has rightly been discarded by                         the<\/p>\n
    learned    single Judge.        This aspect of the matter has<\/p>\n
    been    considered      in    detail by      the      learned         single<\/p>\n
    Judge.     After      having heard the learned counsel                     for<\/p>\n
    both    sides    at length and after having                perused         the<\/p>\n
    record    we    find<\/p>\n
                            no    reason    to    disagree           with      the<\/p>\n
    findings recorded by the learned single Judge on this<\/p>\n
    aspect    of    the matter.      It was contended              before        us<\/p>\n
    that    the    Petitioners in the company petitions                      were<\/p>\n
    given    shares      at the face value, because                they      were<\/p>\n
    contributing      monies for development of the property.\n<\/p>\n
    Now,    they want to keep the shares and they also want<\/p>\n
    refund    of their contribution.          When this            submission<\/p>\n
    was    advanced,      on behalf of the Petitioners a                    clear<\/p>\n
    statement      was    made    before    us    that       in      case      the<\/p>\n
    Appellant       company      pays   off      the      debts       of       the<\/p>\n
    Petitioners      in    the    company     petitions,             they      are<\/p>\n
    willing    to    return their shares to the company or                         a<\/p>\n
    such person as may be named by the company.                       Time was<\/p>\n
    sought    to consider this, but ultimately we were told<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                       – 42 –\n<\/p>\n
    that    it    is not possible for the company to pay                       off<\/p>\n
    the    Petitioners        in the company petitions.               In     this<\/p>\n
    view    of the matter, therefore, we find no                     substance<\/p>\n
    in    the    submission made on behalf of               the      Appellant<\/p>\n
    company that the Petitioners in the company petitions<\/p>\n
    want    their      money    to be returned and also               want       to<\/p>\n
    retain their shares.\n<\/p>\n
    20.    It was also contended before us on behalf of the<\/p>\n
    Appellant      company      that    the    learned       single         Judge<\/p>\n
    should      not<\/p>\n
                       have entertained the petitions,                  because<\/p>\n
    the     Petitioners        have     suppressed        joint         venture<\/p>\n
    agreement and had not disclosed that agreement in the<\/p>\n
    petitions.        The learned single Judge, in our opinion,<\/p>\n
    has    rightly      rejected      this contention.             The      joint<\/p>\n
    venture      agreement      which according to the               Appellant<\/p>\n
    has    been suppressed by the Petitioners is not signed<\/p>\n
    by    the    Petitioners.         It   was   contended           that      one<\/p>\n
    Mr.Ramesh      Thadani had signed that agreement and that<\/p>\n
    both the Petitioners in the company petitions are his<\/p>\n
    nominees.         Both    the   Petitioners have           denied        this<\/p>\n
    allegation.         There is nothing on record except                    bare<\/p>\n
    statement      made      on behalf of      the   Appellant-company<\/p>\n
    supporting         such     allegation.       In        our       opinion,<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n<\/p>\n
                                        – 43 –\n<\/p>\n
    therefore,         by   no    stretch       of     imagination             the<\/p>\n
    Petitioners        in   company petitions can be said to                     be<\/p>\n
    guilty of suppressing material fact.\n<\/p>\n
    21.    Taking overall view of the matter, therefore, we<\/p>\n
    find    no    substance       in     these    Appeals.           They      are<\/p>\n
    dismissed      with     costs.       In     view    of     disposal          of<\/p>\n
    Appeals, Notices of Motion are also disposed of.\n<\/p>\n
    22.     At the request of the learned Counsel appearing<\/p>\n
    for    the    Appellants,
\n                             ig     the operation of           the      interim<\/p>\n
    order which is presently operating is continued for a<\/p>\n
    period    of    eight     weeks      from    today.        The      learned<\/p>\n
    Counsel      for    the Appellant states that              during        this<\/p>\n
    period    the Appellants shall continue to abide by the<\/p>\n
    statement      made     by them which has been             recorded          in<\/p>\n
    these proceedings.           Statement accepted.\n<\/p>\n
                                                 (D.K.DESHMUKH, J.)<\/p>\n
                                                 (A.A.SAYED, J.)<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 14:24:14 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court M\/S.Motwani Builders Pvt.Ltd vs M\/S.Kunal & Co on 12 March, 2009 Bench: D.K. Deshmukh, A.A. Sayed – 1 – IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. APPEAL NO.513 OF 2007 IN COMPANY PETITION NO.726 OF 1998 WITH NOTICE OF MOTION NO.3002 OF 2007 ig … M\/s.Motwani Builders Pvt.Ltd. …Appellant v\/s. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-134509","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nM\/S.Motwani Builders Pvt.Ltd vs M\/S.Kunal & Co on 12 March, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-motwani-builders-pvt-ltd-vs-ms-kunal-co-on-12-march-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S.Motwani Builders Pvt.Ltd vs M\/S.Kunal & Co on 12 March, 2009 - 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