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Debt recovery from a public limited company

Page no : 3

Suri.Sravan Kumar (senior)     18 February 2018

check whether any arbitration clause is incorporated in the agreement. If such clause is incorporated you have to go for arbitration.

1 Like

Harinath (employee)     19 February 2018

Thanks Tushar sir, As you said we're filing summary suite within next 2-3 weeks. 

However I need help on the High Court. Now the judge did not pass judgement he just gave a stay order extending it for 1 more month. Now obviously this will come to bench again after 1 month..so at that time can I file one more petition protesting judge order of giving extension? If yes, how do I do it..Kindly advise.

Dear Suri sir - we have NO arbitration clause in the company PO and nor in our quotation. So do you have any other recommendations? 

Regards,

Tushar Jha (Advisor)     20 February 2018

No point filing a petition protesting judge's order of giving extension. The whole exercise will be futile and pointless. Your main focus should be to contend before the Court (in next hearing) regarding the sustainability of the FIR filed by you based on the Supreme Court's judgment in the case of Iridium India Telecom Ltd v. Motorola Incorporated & Ors. [(2011) 1 SCC 74]

Getting emotional or 
capricious
before the judge won't fetch you any better results.

Focus on filling Summary Civil suit (under Order 37 of CPC) or Winding up petition against the Company. 


 

1 Like

Harinath (employee)     20 February 2018

Okay Sir.. we've already mentioned the Iridium judgement in our counter and so we'll stress that part.

Meanwhile.. just new information popped up on Feb 12 on the company website...basically a communication under Regulation 30(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 under subject - REVISION IN CREDIT RATING OF BANK FACILITIES.. SEBI approved credit rating agency had published the following report and put up on the cmpnay website - which said their loans to the company is declared NPA by SBI and Canara bank

"The rating revision reflects the delays in debt servicing by the Company on account of stretched liquidity and classification of the Company’s bank accounts as NPA. The rating also reflects the weakened credit profile of the company due to net losses, declining net worth and poor debt coverage indicators."

So my question is -  will it help me if i tell this to the Judge? Do I document this findings?

BTW, what is Tommorrow Slip under the USR type in court language?

Regards

Tushar Jha (Advisor)     21 February 2018

Telling judge about CDR or NPA declared by banks against the Company will not help you in any way.

See this:- https://www.lawyersclubindia.com/forum/Company-in-liquidation-77247.asp#.VbC8z_mqqkp

Now, the company/banks will file an application before National Company Law Tribunal (NCLT) for declaring themselves insolvent. A plea for insolvency is submitted to the adjudicating authority (NCLT in case of corporate debtors) by financial or operation creditors or the corporate debtor itself. The max time allowed to either accept or reject the plea is 14 days. If the plea is accepted, the tribunal has to appoint an Insolvency Resolution Professional (IRP) to draft a resolution plan within 180 days (extendable by 90 days), following which the Corporate Insolvency Resolution process is initiated by the court. For the said period, the board of directors of the company stands suspended, and the promoters do not have a say in the management of the company. The IRP, if required, can seek the support of the company’s management for day-to-day operations. if the CIRP fails in reviving the company the liquidation process is initiated. As soon as the case is referred to NCLT, the company will get an automatic stay-order against all civil/revenue/money-recovery court proceedings till 6 months.

Furthermore Hon'ble Supreme Court's ruling about debt priority still holds goods as held in the case of 
Union of India Vs. Somasundram Mills (P) Ltd. [AIR 1985 SC 407] that,
"It is a general principle of law that debts due to the State are entitled to priority overall other debts. If a decree holder brings a judgment-debtor's property to sale and the sale-proceeds are lying in deposit in court, the State may, even without prior attachment exercise its right to priority by making an application to the executing court for payment out. If however, the State does not choose to apply to the Court for payment of its dues from the amount lying in deposit in the Court but allows the amount to be taken away by some other attaching decree holder, the State cannot thereafter make an application for payment of its dues from the sale proceeds since there is no amount left with the Court to be paid to the State. However, if the State had already effected an attachment of the property which was sold even before its sale, the State would be entitled to recover the sale proceeds from who ever has received the amount from the Court by filing a suit. Section 73(3) read with 73(2) of C.P.C. contemplate such a relief being granted in a suit."


USR is unstamped Register Number which is a number provided to document that has been filed by either of the parties but not yet admitted/numbered in the court.

1 Like

Harinath (employee)     21 February 2018

Our Counter Petition is appearing under the USR tab with a number assigned to it, does it mean that my counter petition is accepted by the judge? 

Thanks Tushar sir for all the help. 

Harinath (employee)     01 March 2018

Hello Friends,

What interim reliefs can I claim in Summary suite? No lawyer I have contacted ( 6 lawyers till date) is telling me this. I saw this while searching on internet..can you please help?

_____________________________
Interim and Ad-Interim Reliefs: Pending the hearing and final disposal of the Suit, the Hon'ble Court so as to prevent the ends of justice from being defeated, be pleased to Order -

f) The Hon'ble Court, in the due exercise of their powers u/s 94 and O.38 of CPC, 1908, issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not give security for his appearance, and if he fails to comply with any order for security commit him to the civil prison; (as may be applicable to the facts of the case)

g) The Hon'ble Court, in the due exercise of their powers u/s 94 and O.38 of CPC, 1908, direct the defendant to either (i) furnish security to produce any property belonging to him and to place the same at the disposal of the Court or (ii) order the attachment of his property, or, (iii) furnish the bank guarantee for the Suit amount or (iv) deposit the Suit amount in the Court;

h) The Hon'ble Court, in the due exercise of their powers u/s 75 and O.26 of CPC, 1908, be pleased to appoint Court Commissioner, to hold a scientific, technical, or expert investigation; or to perform any other ministerial act; (as may be applicable to the facts of the case) (Please see the Note below)

i) Interim/ad-interim reliefs in terms of prayer clauses _______ as aforesaid.

j) Such further and other reliefs as this Hon'ble Court may deem fit and proper in the circumstances of the case as may be necessary.

Note: In Summary Suits, the Reliefs could only be in the nature of Money, i.e. the Principal sum and the interest, if any claimed, and no declaration or injunction of any nature could be asked for. In Summary Suits, even unliquidated compensation or damages cannot be claimed. However, if other Reliefs are also required to be sought, then, preferably, a leave of the Court under O.2 R.2 may be obtained to file a separate Suit for other Reliefs. Nevertheless, a comprehensive regular Suit may be filed claiming all Reliefs, instead of filing two Suits. Further, whereas Summary Suits are not maintainable in every District Court, in such cases, a comprehensive Suit for all the Reliefs may be filed. Also, please take note of this whilst making averments in the body of Plaint.

_____________________

Regards

 

 

Tushar Jha (Advisor)     01 March 2018

1. Refer Bombay High Court's judgment in the case of Nimbus Communications Ltd Vs. Board of Control for Cricket in India.
See this: https://indiankanoon.org/doc/106556444/

2. See this judgment by Andhra Pradesh High Court https://indiankanoon.org/doc/1826656/​

3. Very difficult to get an interim attachment of debtor's property in Summary Suit, see this judgment in the case of Raman Tech. & Process Engg. Co. & Anthrs. Vs. Solanki Traders [ 2007(3)SCALE419 : (2008) 2 SCC 302]
Link to the judgment: https://indiankanoon.org/doc/9447/​

4. The Code of Civil Procedure uses different expressions in relation to incidental proceedings and supplemental proceedings. Incidental proceedings are referred to in Part III of the Code of Civil Procedure whereas Supplemental Proceedings are referred to in Part VI thereof.
Difference between incidental proceedings and supplemental proceedings has been explained by Hon'ble Supreme Court in the case of 
Vareed Jacob Vs. Sosamma Geevarghese & Ors. [AIR 2004 SC 3992]                 Link to the judgment: https://indiankanoon.org/doc/19951/​

5. Furthermore, Hon'ble Supreme Court has held in Manohar Lal Chopra Vs. Rai Bahadur Rao Raja Seth Hiralal [
AIR 1962 SC 527] that,

"We are of opinion that the latter view is correct and that the Courts have inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of Order XXXIX of Code of Civil Procedure. There is no such expression in Section 94 of CPC which expressly prohibits the issue of a temporary injunction in circumstances not covered by Order XXXIX or by any rules made under the Code. It is well-settled that the provisions of the Code are not exhaustive for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them. The effect of the expression 'if it is so prescribed' is only this that when the rules prescribe the circumstances in which the temporary injunction can be issued, ordinarily the Court is not to use its inherent powers to make the necessary orders in the interests of justice, but is merely to see whether the circumstances of the case bring it within the prescribed rule. if the provisions of Section 94 were not there in the Code, the Court could still issue temporary injunctions, but it could do that in the exercise of its inherent jurisdiction. No party has a right to insist on the Court's exercising that jurisdiction and the Court exercises its inherent jurisdiction only when it considers it absolutely necessary for the ends of justice to do so. it is in the incidence of the exercise of the power of the Court to issue temporary injunction that the provisions of Section 94 of the Code have their effect and not in taking away the right of the Court to exercise its inherent powers.

There is nothing in Order XXXIX, Rule 1 & 2, which provide specifically that a temporary injunction is not to be issued in cases which are not mentioned in those rules. The rules only provide that in circumstances mentioned in them the Court may grant a temporary injunction."

Harinath (employee)     30 July 2018

Hello Friends,

in short - we filed IPC 420 against company management on Nov 2017, they went to High Court for Quash and they manage to get adjournments till date. 2 judges changed in High Court till date but there is no sight of any relief to me..so somewhere I read that filing a PIL will help to expedite the case. Kindly suggest. Will it help me?

BTW, the company management filed a counter case at a police station stating he came with rowdies to their office..the case was filed against my father in Dec 2017, it was a just a complaint copy, FIR was not registered till date by those police. We told police that company filed this complete after we filed an FIR against the company management. So I guess police ignored company officials and did not call my father till date..anything that i can do to exploit this situation to put company management in tight spot?? please suggest.

Also, we filed a seperate money recovery suite against the company in April 2018..till date they did not file counter, they're just asking time. next date is August 2018. I will update you guys shortly.

Please give me your thoughts about filing a PIL.. 

Regards,

Harinath (employee)     27 January 2019

Hi Friends,

I'm back after 6 months to give you folks an update on my case and also seek a suggestion -

Summary: 1. We filed an FIR u/s 420, 406 IPC on Nov 2017 against the company MD & his folks at PS. The opp side approached High Court for quash and it is currently pending. No hearing is happening past 1 year at HC and I'm said the judge is not inclined to take up the case and so the registrar is not posting the case.

2. We also filed an Ordinary Summary suite at City Civil Court 9 months ago for money - Invoice amounts + 24% due. The current stage at Court is - fixing up issues on the next date, i.e on Feb 2nd week 2019

3. In the meanwhile - my mom suffered brain stroke in Nov 2018 and she's completely bed ridden. My father is unable to open workshop and he's also under serious pressure to close workshop and repay creditors whatever due and sit at home to take care of my mom.

Now, I need suggestions - if you guys 've followed my thread from beginning - there is a special condition - we have a finished Powerpack (manufactured equipment) which the customer ordered for Rs. 18Lacs and he refused to take delivery and nor pay for it inspite of making it ready on time. 

Due to the recent development with regards to the medical condition of my mother and mounting up medical expenses - we 're thinking to sell that finished equipment as scrap - so we it will a relief to us. I cannot wait for court order as I dont know when i'll get the money. If I've to do this - what should I do? How do I inform the court and a get a favarable order before the final order. I cannot wait for 6 months or 1 year - I 've to sell this equipment as scrap within next 2-3 months.

 So friends - please guide me with few suggestions.

My thinking - I want to file a petition in the City Civil Court in OS suite asking / informing the court that I want to sell this equipment as scrap and the entire amount of 18L to bee debited to the opposite party. 

Friends - if you ve any questions - pls let me know. Thanks

Harinath (employee)     27 January 2019

Hi Friends,

I'm back after 6 months to give you folks an update on my case and also seek a suggestion -

Summary: 1. We filed an FIR u/s 420, 406 IPC on Nov 2017 against the company MD & his folks at PS. The opp side approached High Court for quash and it is currently pending. No hearing is happening past 1 year at HC and I'm said the judge is not inclined to take up the case and so the registrar is not posting the case.

2. We also filed an Ordinary Summary suite at City Civil Court 9 months ago for money - Invoice amounts + 24% due. The current stage at Court is - fixing up issues on the next date, i.e on Feb 2nd week 2019

3. In the meanwhile - my mom suffered brain stroke in Nov 2018 and she's completely bed ridden. My father is unable to open workshop and he's also under serious pressure to close workshop and repay creditors whatever due and sit at home to take care of my mom.

Now, I need suggestions - if you guys 've followed my thread from beginning - there is a special condition - we have a finished Powerpack (manufactured equipment) which the customer ordered for Rs. 18Lacs and he refused to take delivery and nor pay for it inspite of making it ready on time. 

Due to the recent development with regards to the medical condition of my mother and mounting up medical expenses - we 're thinking to sell that finished equipment as scrap - so we it will a relief to us. I cannot wait for court order as I dont know when i'll get the money. If I've to do this - what should I do? How do I inform the court and a get a favarable order before the final order. I cannot wait for 6 months or 1 year - I 've to sell this equipment as scrap within next 2-3 months.

 So friends - please guide me with few suggestions.

My thinking - I want to file a petition in the City Civil Court in OS suite asking / informing the court that I want to sell this equipment as scrap and the entire amount of 18L to bee debited to the opposite party. 

Friends - if you ve any questions - pls let me know. Thanks


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