K K Modi firms sue SWC over dues

Companies owned by K K Modi have filed a petition for the recovery of dues over Rs 72 crore (Rs 720 million) from the Manu Chhabria-owned Shaw Wallace and Co.

However, SWC has disputed the claim stating that it had filed an appeal against the court judgement ordering it to pay.

This is the latest twist to the dramatic court battle being played out between five companies of the K K Modi group, which have filed five separate petitions in the Calcutta high court, and SWC.

Out of the Modi companies, two were Calcutta based - M K J Developers Ltd and M K J Enterprises Ltd.

Of the others, Visisth Chay Vyapar was based in New Delhi, Kamini Finance and Investment Co was Guwahati based and Hotahoti Wood Product Ltd was located at Nagaland.

SWC in its counter petition filed recently, said all the petitions were liable to be stayed in as much as appeals had been preferred against the order of decree and the appeals were pending in the high court.

The creditors in their petition said that in 1997, a single judge had passed decree against SWC in all five cases. SWC requested the creditors not to proceed with the execution but the creditors moved for execution of the decree.

Subsequently, by an order of the high court, SWC held its creditors meeting and a scheme for repayment was framed. SWC reportedly promised to pay Rs 2.5 crore (Rs 25 million) per month to its creditors but failed to keep its promise. With all avenues exhausted, the creditors filed petitions for execution of the money.

In the execution petitions, the creditors alleged that SWC with an intent to obstruct and to delay the proceedings had framed the so called repayment scheme.

It was also alleged that SWC was disposing material assets without satisfying the decree holder and was trying to remove assets and properties from the local limits of jurisdiction of the Calcutta high court.

SWC described the allegation as baseless and denied the allegation of selling assets, funds and to removing the assets from the limits of the high court.

The hearing of the cases is likely to be held in August.