TMI Blog2001 (3) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... above Inter Corporate Deposit alongwith interest thereon shall not be subject to lien of any kind and no adjustment of principal or interest amount can be made with other debts or claims which we may owe you." In clause 5, it was stipulated that the outstanding amounts shall bear interest at 24 per cent per annum in the event of default and in clause 7, it was stated that the acceptance of the cheque drawn by the petitioner would tantamount to the respondent agreeing to the terms and conditions governing the ICD as set out in the letter. On 7-6-1995, an amount of Rs. 26,25,000 inclusive of interest became due and payable. The respondent-company having failed to repay the amount, a notice dated 17-6-1997 was issued on behalf of the petitioner by its advocate calling upon the respondent to pay an amount of Rs. 47,95,002 inclusive of interest or else to face a proceeding for winding up under section 433/434 of the Companies Act, 1956 ( the Act ). This notice was replied to on 7-7-1997 by the company s advocates stating that instructions were being obtained from the company and in the meantime, all the allegations were denied. It is common ground, that no reply thereafter was submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ften make, pending a detailed reply which in the present case was never sent. The tenor of the second reply dated 16-1-1998 was that the company was liable to repay the dues of the petitioner. 3. In the affidavit in reply which has been filed on behalf of the company to the company petition the case which has been sought to be made out in defence is that the petitioner is the promoter of a company known as J.K. Udaipur Udyog Ltd. and that the said company is its wholly owned subsidiary. According to the respondent-company, the ICD was a finance arrangement to enable the company to subscribe to the issue of Partly Convertible Debentures of the J.K. Udaipur Udyog Ltd. The respondent-company as co-manager to the public issue had also under-written a part of the issue and according to the respondent, it accepted this deposit of Rs. 25 lakhs only to accommodate the J.K. Group of Companies which was trying to save the public issue of Partly Convertible Debentures of J.K. Udaipur Udyog Ltd. which was undersubscribed. In para 3 of the reply, it has been stated that the petitioner has over simplified the matter by only stating that they had placed an Inter Corporate Deposit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had been heavily undersubscribed to the extent of 40 to 50 per cent. According to the respondent, in pursuance of this arrangement, the petitioner and another group company, Pranav Investments Ltd. deposited Rs. 25 lakhs each with the respondent and the respondent subscribed to 1,50,000 Partly Convertible Debentures. According to the respondents, after the Partly Convertible Debentures were converted into equity shares, the shares would be sold in the open market upon which, the petitioner would be repaid the amount of deposit. This in my view, does not constitute a valid or bona fide defence for a number of reasons. Firstly, the defence which is sought to be made out in the affidavit in reply does not find any place in either of the two letters addressed on behalf of the respondent to the statutory notice of winding up of 17-6-1997 and 26-12-1997. The petitioner in those two notices was demanding the repayment of its dues along with interest and if according to the respondent, the amounts deposited by the petitioner were not an Inter Corporate Deposit but, really an arrangement of Finance to enable the respondent to subscribe to the public issue, there is no mention of any su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th interest as agreed upon by the respondent. Essentially, the defence of the respondent is that the Court should ignore the terms and conditions governing the placement of the deposit which were reduced to writing on the supposed plea that, this was merely an arrangement for providing finance. I do not find that the defence is bona fide or capable of acceptance by the Court even in the petition for winding up. 6. The ICD became due for payment on 7-6-1995. On 16-1-1998, which was within a period of three years, the respondent-company acknowledged that it would within the next two months submit a proposal "in respect of the settlement of the outstanding dues". The company petition has been filed on 1-7-1999. There is, therefore, no basis in the plea of limitation. 7. Finally it must be recorded that it was sought to be contended by a further affidavit dated 28-2-2001 of the respondent that the company petition has not been verified by a duly authorised representative within the meaning of Order 29, Rule 1 of the Code of Civil Procedure, 1908. There is absolutely no merit in this contention since the General Power of Attorney, a certified true copy of which has been append ..... X X X X Extracts X X X X X X X X Extracts X X X X
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