1 R IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE15H DAY OF JULY, 2015 PRESENT THE HON'BLE MR. JUSTICE VINEET SARAN AND THE HON’BLE MR. JUSTICE ARAVIND KUMAR OSA NO.20/2014 BETWEEN: KINGFISHER AIRLINES LIMITED A PUBLIC LIMITED LIABILITY COMPANY, INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT UB TOWER, LEVEL12UB CITY24VITTAL MALLYA ROAD, BENGALURU-560 001 ..APPELLANT (BY SRI.S.V.RAJESH, ADVOCATE) AND: AEROTRON LIMITED A COMPANY INCORPORATED AND EXISTING UNDER THE LAWS OF ENGLAND AND WALES, HAVING ITS REGISTERED OFFICE AT WESTLEY HOUSE, FLEMING WAY WEST SUSSEX, RH10 (GA) UNITED KINGDOM REPRESENTED BY ITS2SRI.A.C.ACHAPPA, CONSTITUTED ATTORNEY. ..RESPONDENT (BY SRI.S.S.NAGANAND, SENIOR COUNSEL ALONG WITH ADVOCATE, M/s.NDA PARTNERS) COUNSEL FOR THE APPELLANT HAS FILED THE ABOVE APPEAL U/S483OF THE COMPANIES ACT, 1956, R/W SECTION4OF THE KARNATAKA HIGH COURT ACT, 1961, PRAYING THIS HON'BLE COURT TO SET ASIDE THE IMPUGNED ORDER
DATED6H DECEMBER, 2013, PASSED BY THE LEARNED COMPANY JUDGE IN CO.P NO.214 OF2012AND ALL ACTION, IF ANY, TAKEN IN PURSUANT THEREOF. THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, VINEET SARAN J, DELIVERED THE FOLLOWING: JUDGMENT
Respondent company Aerotron Limited, having its office in United Kingdom, had filed company petition No.214/2012 under Section 433(e) and (f) read with Section 434 and 439(1)(b) of the Companies Act, 1956 for winding up of the appellant-company.
2. The case of respondent is that certain amounts were admittedly due to be paid by the appellant company 3 to the respondent company for which an agreement was entered into between the two companies on 24.02.2012 whereby the appellant company had acknowledged its liability to pay the outstanding amounts in installments spread over several months between March and October, 2012. Appellant contested the matter by denying its liability to pay the said dues, on the ground that the same were disputed dues and it also raised an objection that since the respondent company was carrying on business in India with an established place of business in India and having failed to comply with the provisions of Section 592 to 594 of the Companies Act, it would be prohibited from bringing a suit or instituting legal proceedings in India, as provided under section 599 of the Companies Act. After hearing learned counsel for the parties, vide a reasoned order dated 06.12.2013 passed by the learned Company Judge, company petition has been admitted and posted for hearing on the question of advertisement of the petition. Challenging 4 the said order of admission of the company petition, this appeal has been filed.
3. We have heard Sri.S.V.Rajesh, learned counsel for appellant as well as Sri.S.S.Naganand, learned Senior counsel along with Sri.A.C.Achappa, learned counsel for respondent and perused the records.
4. To support his contention that the respondent company is carrying on business activities in India, learned counsel for appellant has placed reliance on certain print outs of the website of the respondent company wherein it has been stated that the company provides support system to its customers in India as well as other countries by providing technical assistance, spare supplies and distribution. It is submitted that on the website of the respondent company it is also mentioned that the company has developed new markets in Egypt, India, Kazakhistan and Jordan. On the basis of this, learned counsel for appellant has vehemently 5 contended that the company is carrying on business in India. However learned counsel has not been able to show any document in support of his contention that the respondent company is having any office, warehouse, store house etc., within the territory of India or any of its employees are permanently posted in India. The documents on which the learned counsel for appellant has relied upon only goes to show that respondent company provides technical service in India by providing spare parts and other technical assistance which would not mean that they have any establishment or office in India but provide such services on demand, as and when required by staff or Engineers going to India temporarily for providing such services. As such, we are not satisfied with the objection of the appellant that in such circumstances the respondent company would be obligated to comply with Section 592 to 594 of the Companies Act, 1956. 6 5. Learned counsel for appellant has relied upon decision of the Delhi High Court rendered in the case of M/s.Dabur (Nepal) Pvt. Limited Vs M/s.Woodworth Trade Links Pvt. Limited reported in (2012)175 Comp. cases 338 to support his contention that if a company has an office or establishment within the territory of India it would have to comply with the provisions of section 592 to 594 of the Companies Act. On facts, the said decision would not be applicable as in the said case the company in question was a subsidiary of an Indian Company which admittedly had its warehouse, store house in India where the goods of the company was stored. Said company also had transactions within India and had an address of correspondence in India. As such, we are of the view that the ratio of the said Judgment would not be applicable to the facts of this case.
6. As regards admission of the debts by appellant company payable to the respondent company, learned 7 company Judge has placed reliance on the agreement between the two companies dated 24.02.2012 whereby the appellant company has acknowledged an outstanding of US $ 56,16,024.12 plus accrued interest after 31st January, 2012. Admittedly said amount has not been paid within the time provided in the said agreement or even thereafter. Thus, being prima facie satisfied that the appellant company was unable to pay its debts, company petition has been admitted. In such facts, admission of the petition cannot be faulted.
7. In the end, learned counsel for appellant has also submitted that under the FOREIGN EXCHANGE MANAGEMENT (ESTABLISHMENT IN INDIA OF BRANCH OR OFFICE OR OTHER PLACE OF BUSINESS) REGULATIONS, 2000 there is a prohibition under Regulation 3 for establishing branch office in India by a Foreign company without prior approval of Reserve Bank of India. In view of the fact that we have already held above that the appellant has not been able to place any 8 material on record to show that the respondent company has any office (be it a site office or project office or warehouse or store house) within the territory of India, the provisions of the Regulations of 2000 would not be applicable. In view of the aforesaid, we do not find any good ground to interfere with the order of admission passed by learned Company Judge. Appeal is accordingly dismissed. However, there shall be no order as to costs. Sd/- JUDGE Sd/- JUDGE SBN