TMI Blog2002 (6) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,00,000 equity shares of Rs. 10 each and its paid up capital is Rs. 5 crores made up of 5,00,00,000 equity shares of Rs. 10 each in which calls in arrears are to the extent of Rs. 4,500. It is stated that the respondent-company issued a letter dated 5-11-1993 requesting the petitioner for arranging intercorporate deposits on the terms mentioned therein and the petitioner was providing loans from 8-11-1993 to 8-12-1993 by way of cheques and pay orders. According to the petitioner, there was a mutual and running account and after giving credit to the payments made by the respondent, the respondent was liable to pay a sum of Rs. 34,95,350 as on 31-7-1997. It is stated that a periodical statement was sent to the respondent and the last payment made by the respondent was a sum of Rs. 5,00,000 on 22-10-1994. It is stated that the petitioner sent various reminders and in spite of the same, the respondent has not paid the money and the respondent was indebted to the petitioner a sum of Rs. 34,95,350 as on 31-7-1997. It is also stated that the respondent-company was in continuous correspondence with the petitioner from 8-11-1993 requesting for deposits and the respondent also wrote letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent, the petitioner has agreed to provide an accommodation to the respondent by way of a temporary financial accommodation to the extent of Rs. 30 lakhs in November 1993 and the said sum was received by the respondent on various dates between 8-11-1993 and 17-11-1993 and the entire sum was repaid on 9th, 10th and 15th December, 1993 in three instalments of Rs. 10 lakhs each. It is stated that the subsidiaries of the petitioner company, namely, M/s. GTL Exports Private Limited and M/s. Season s Exports Private Ltd. raised debit notes under the head, service charges for a sum of Rs. 1,25,100 which were also paid by the respondent. It is stated that there was no understanding for any further payment by the respondent to the petitioner, nor was there any further sum due by the respondent to the petitioner. It is also stated that the respondent required a further sum of Rs. 30 lakhs which was paid by the petitioner in the month of December 1993. It is stated that the entire sum of Rs. 30 lakhs was repaid on 20-4-1994, 18-8-1994, 21-9-1994 and 22-10-1994. It is further stated that there is no demand for payment of interest or service charges either from the petitioner or its s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has admitted the liability and the respondent has raised a dispute only for the purpose of defending the company petition after admitting the liability. Learned counsel referred to various letters issued by the petitioner demanding interest and the respondent has not denied the demand of interest made by the petitioner. Mr. Viswanathan, learned counsel also referred to the statement of accounts of the petitioner and submitted that the statement of accounts clearly shows that a sum of Rs. 34,95,350 was due and payable by the respondent as on 31-7-1997 and in spite of the demands made by the petitioner, the respondent has not paid the amount. Learned counsel also referred to the balance sheet of the respondent company and submitted that the financial position of the respondent company is not sound and it is liable to be wound up. Learned counsel further submitted that the objections raised by the respondent in the counter affidavit had not been raised at any point of time earlier and it is not a bona fide dispute and when the respondent has admitted the liability to pay interest by the issue of cheques, it is not now open to the respondent to deny that it is not liable to pay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner is false and untenable and the claim for interest is not borne of records. Learned senior counsel submitted that each entry has to be proved and none of the entries in the copy of statement is proved and it is not equitable to wind up the respondent company. His case is that the petitioner has not come with clean hands and on this account, the petition is liable to be dismissed. 6. I have carefully considered the submissions of Mr. P. Viswanathan, learned counsel for the petitioner and Mr. V. Ramachandran, learned senior counsel for the respondent. I find that there is force in the submission of Mr. V. Ramachandran, learned senior counsel regarding the claim of interest made by the petitioner. The petitioner has mainly relied upon the letter dated 5-11-1993 of the respondent addressed to the petitioner agreeing to pay interest the rate of 50% per annum on the deposit availed by it. The letter also sets out other terms of the intercorporate deposit. Mr. V. Ramachandran, learned senior counsel referred to the notice issued by the advocate on behalf of the petitioner dated 23-12-1996 wherein it is stated as under : "My client states that on 1-11-1993 you approached my cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployment of expression, appropriate interest in the notice dated 23-12-1996 would not have been made. Further, there is no reference to the payment of service charges at all in any of the letters and the respondent has not acknowledged the letters and agreed to pay interest and service charges. In my view, the respondent has raised a bona fide dispute on the question of payment of interest and service charges. 9-10. Secondly, insofar as the reliance placed by the petitioner on the dishonour of cheques is concerned, the cheques produced by the petitioner were returned on 9-1-1994 and 10-1-1994 and those cheques were issued in the name of M/s. GTL Exports P. Ltd., a subsidiary of the petitioner. According to the petitioner, the cheques were issued in the name of the subsidiary only on the basis of instructions given by the petitioner. Therefore it is a matter of evidence whether there was any such instruction or understanding between the parties to issue cheques in favour of M/s. GTL Exports P. Ltd. towards payment of service charges and interest and whether any action has been taken by the said company against the respondent when cheques were dishonoured. Therefore it is a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition for winding up is not a proper remedy. This Court also held that the bona fide dispute of the liability has to be determined having regard to the conduct of parties, character of plea and circumstances of the case. This Court further held that where there is necessity to go into the authenticity of the documents produced in proof of the debt requiring examination and cross-examination of witnesses, the winding up of the company cannot be ordered. I hold that the decision in Neg Micon s case ( supra ) would squarely apply to the facts of the case. 13. Mr. V. Ramachandran, learned senior counsel referred to the decision of the Andhra Pradesh High Court in Bombay Glass Blowing Industries v. Bio Vaccines P. Ltd. [1999] 98 Comp. Cas. 174 where the Andhra Pradesh High Court held that the Company Court has no jurisdiction to pass an order directing payment of unascertained and indefinite amount of interest because it is the function of the Civil Court to award interest. I have already held that the claim of the petitioner of interest is disputed and the dispute is a bona fide and substantial one. I am not expressing any opinion whether the petitioner is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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