The Madras High Court dismissed an appeal filed by Subhiksha Trading Services Ltd, which questioned authority of a representative of Kotak Mahindra Bank Ltd, who filed a winding up petition on behalf of the Bank. The Court also observed that the retail chain’s intention is only to drag the proceedings to suit its convenience.
The appeal was filed by Subhiksha against an order passed by the Madras High Court in December 2011, which dismissed Subhiksha’s appeal, in which it said that V Bhaskaran who was representing the bank do not have any authorisation to file the winding up against Subhiksha, which owe Rs 40 crore to Kotak Bank.
The counsel appeared for the bank argued that V Bhaskaran, associate vice-president, has been authorised to represent the bank in any court of law, consumer court or tribunal in connection with the legal proceedings initiated by or against the bank.
He was also authorised to do all such acts and deeds as may be necessary, including that of appointing advocates to appear on behalf of the bank to file or defend any suits by or against the bank and to execute all such documents and accordingly he has verified the company’s petition. The court said that he was authorised by the company by a board resolution and he is also a principal officer of the company. Hence, the verification done by him is proper.
After hearing both the sides, the HC bench comprising Justice C Nagappan and Justice M Sathyanarayanan, passed an order, which stated “...this court is of the view that the conduct of the appellant-company would clearly lead to the inference that its intention is only to drag on the proceedings to suit its convenience.”
“The conduct of the appellant-company would clearly indicate that it intended to drag on the proceedings to suit its convenience and, accordingly, very belatedly, took out the present application raising objections on hyper-technical grounds,” the court said.
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The court observed that the resolution has to be read in its entirity and not in isolation and the submission of the company regarding the authorisation of the official lacks merit and substance.
It may be noted, the bank has filed a petition for winding up the company, saying that the company has failed to repay the amounts due and payable to the bank. Various other creditors has also filed petitions for winding up.
The bank also opposed a draft scheme of amalgamation sponsored by cash and carry wholesale traders Pvt Ltd, which was dismissed by the court in August 2009, for the reason that the proposal for revival cannot be termed as feasible.
While an appeal filed by Cash and Carry Wholesale Traders Pvt Ltd challenging the company, the court ordered to pursue the procedures for winding up, the Supreme Court observed that it could take up the hearing of the various winding up petitions if the Company Court finds that the scheme of amalgamation is viable financially.
The Company Court, in October 25, 2009, dismissed the petitions for sanctioning the scheme of amalgamation of Blue Green Constructions and Investments Ltd and Subhiksha, holding that the proposed scheme was financially inviable. The appeals on this filed by Subhiksha and Blue
Green Constructions and Investments Ltd were admitted, but, no interim orders were granted.