The Supreme Court on Tuesday dismissed a plea by Sujana Universal Industries, promoted by Union minister of state for science and technology YS Chowdary (popularly known as Sujana Chowdary), in a matter related to loan
default of Rs 106 crore by the firm to the Mauritius Commercial Bank.
A bench headed by justice J Chelameshwar dismissed Sujana Universal’s appeal against a July 2015 order by the Hyderabad HC that allowed the Mauritius bank’s plea seeking liquidation of the company, which had stood as a guarantor to a Rs 92-crore trade financing loan availed by its Mauritius-incorporated subsidiary Heistia Holdings in November 2010. The minister was the chairman of the company then and is currently one of its directors.
Challenging the HC order that set aside an earlier order by a single judge to defer the publication of a notification to initiate the process for winding up for six months to facilitate repayment, Sujana Universal in its appeal said that it was a guarantor company and not a debtor and so a “comany petition” for its winding up was not maintainable.
It said that the lenders could not seek liquidation of guarantor firms through company petitions and and the former only had the right to recover the money through filing civil suits in civil courts.
“… the HC failed to appreciate that the decree obtained by the bank from the Commercial Court of England is nullity in view of its summary nature and ex-parte disposal… a foreign judgment and decree is unenforceable for winding up a company registered under the Companies Act in India,” the appeal filed through counsel D Mahesh Babu stated.
Sujana’s firm further stated that the decree passed by the HC of England, Queens Bench division, lack in bonafides and thus a petition for winding up of guarantor company was not maintainable.
Senior counsel Dushyant Dave and counsel Sanjeev Kumar represented the Mauritius Bank in the apex court.
The bank had told the HC that guarantors were equally liable and hence a company petition was also maintainable against a guarantor firm. Kumar told FE that the outstanding dues from the minister’s firm, including interest and penal charges, have shot up to Rs 106 crore.