TMI Blog2001 (9) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... re application money. In a nutshell, the loan advanced by the petitioners to the respondent-company was treated as share application money in the books of account till a proper and legal share subscription agreement was entered into for allotment of shares by the company to the petitioners. Till such time, the said money remained as an advance with the company. It is alleged by the petitioners that in spite of repeated requests the company failed and neglected to enter into a share subscription agreement for allotment of shares to the petitioners. It called upon the respondent-company to return the said amount with interest at the rate of 24 per cent per annum from the date of receipt of the said amount by notice dated 14-8-2000. By its rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as goodwill. According to the respondents, it was a gentelemen s understanding that no formal agreement would be required and hence no agreement was drawn upon. It is further mentioned in the affidavit that at the request of Shri Singh, the petitioners were also included as promoters of the respondent-company. Shri Singh, was inducted as a director of the respondent-company with effect from 1-4-1994. According to the respondents, Shri Singh was not initially designated as managing director but he carried out all the work as a managing director with effect from 1-4-1994. He was, however, officially appointed as managing director with effect from 1-12-1994, and continued as such till 15-6-1996. According to the respondents the said Shri Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawn by his clients cannot now be revived and, therefore, the petitioners are entitled to get their share application money invested by them with the respondent-company back with interest at the rate of 24 per cent per annum. Shri Kadam has pointed out that in the account books and the balance-sheets, the liabilities of the said debt is admitted. In the balance-sheets the said amount is reflected as share application money. 4. On the other hand Shri Aradeshar, the learned counsel for the respondent-company has vehemently opposed admission of the petition. According to the learned counsel for the respondents, the petitioners were not entitled to claim back the said amount by naming the said amount as share application money. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate and, therefore, the claim of the petitioners for interest at the rate of 24 per cent is not at all tenable. It would require evidence on the point whether there was an oral agreement of loan given by the petitioners to the respondent-company repayable with interest at the rate of 24 per cent per annum. Shri Kadam has however, replied to the said contention of the respondent-company declining to accept the offer of allotment of shares as his clients had revoked the contract by the notice sent by them demanding the money back. 5. It is crystal clear from the petition as well as the affidavits that the claim of the petitioners is not an ascertained or liquidated one. What was the nature of the money given by the petitioner to the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not an admitted or liquidated debt but has been bona fide disputed by the respondent-company. 7. The petitioners have already filed a civil suit in this Court for recovery of the aforesaid alleged debt from the respondent-company. Though according to Shri Kadam, pendency of the civil suit is not a bar to maintain a company petition, according to me, since the petitioners have resorted to a legitimate civil remedy to recover their alleged debt, the present company petition cannot be entertained at all. It is well-settled legal position that the company petition is a last resort for the parties and it must satisfy the prescribed conditions of the Companies Act. Winding up provisions cannot be used as a pressure tactics to recover an all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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