Just when it seemed like the legal troubles were over for Satyam Computer Services, paving the way for its merger with Tech Mahindra, yet another litigation has come up in the Andhra Pradesh High Court, this time seeking winding up of the company for non-payment of debt.
Ekadanta Greenfields Pvt Ltd, a subsidiary of IL&FS Engineering and Construction Company (formerly Maytas Infra), has filed a petition claiming that it had lent Rs36.50 crore to Satyam on various dates as temporary advances through cheques drawn on Axis Bank, of which Rs23 crore was overdue.
It has sought an order for winding up Satyam under the provisions of the Companies Act 1956 and also appointment of a provisional liquidator.
On Ekadanta, few details are available. As per the petition, it is into acquisition and development of agricultural land.
Though there were claims from various entities to the extent of about Rs1,230 crore, Satyam’s management has been refusing any such liabilities. However, after a forensic audit following the revelation of an accounting fraud by Satyam’s founder B Ramalinga Raju, the company had maintained the claim amounts in a suspense account.
In an attempt to counter such refusal by Satyam, Ekadanta said, “A part repayment of Rs17,92,00,000 was made by the Respondent Company (Satyam) to the Petitioner Company (Ekadanta) subsequently in November 2008 by way of three cheques, clearly admitting the debt due to the Petitioner Company.”
However, there have been no repayments thereafter and repeated reminders did not yield any reply, it claimed.
“It is settled law that when the debtor has admitted a debt but thereafter relies on vexatious defenses as an afterthought to evade repayment, such defense cannot be counted as a bonafide dispute. In the absence of a bonafide dispute and the admission by the Respondent Company of the debt outstanding and due, the Respondent Company can be said to have neglected to pay the amount owed to the Petitioner Company in the absence of any explanation to the reasonable satisfaction of the instant creditor, namely the Petitioner Company,” it said.
To be sure, Satyam has been involved in several litigations, most of which have been amicably resolved. The Andhra Pradesh High Court is also currently hearing an application made by Satyam for ratifying the merger proposal with Tech Mahindra. Besides the creditors, Satyam's shareholders too have approached the court seeking a revision of the merger formula. The court has also sought the audit of the company’s accounts through an independent auditor.