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TMI Blog2007 (2) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... tions mutually agreed upon. 4. Rasiklal Ratitlal Trading Pvt. Ltd. had sold, supplied and delivered to the company items of various fabrics and had raised, issued and delivered to the company their 7 invoices for the aggregate sum of Rs. 77,12,001. The said 7 bills had fallen due for payment during the period 24-4-2003 to 10-6-2003. 5. M/s. Rasiklal Ratilal had also sold, supplied and delivered to Company items of various yarns as ordered by them and, subsequently, raised, issued and delivered to the Company 8 invoices for an aggregate sum of Rs. 60,65,929. The said 8 bills had fallen due during the period 24-4-2003 to 25-6-2003. 6. The RR Group, thus, claims to have raised the aforesaid 15 (7+8) bills of exchange for the value received thereunder by Company, the details of which are given in paras 8 and 9 of the petition. The RR Group has availed bill discounting facilities extended by the bank and discounted aforesaid 15 bills which were drawn and duly accepted by the Company by endorsing their acceptance on the said bills. 7. The Company had issued 15 cheques of various dates and amounts, details of which are to be found in para 12 of the petition towards the payment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even after adjusting recoveries effected from time to time, still they have pending recovery in the sum of Rs. 99,26,156.10 which the company has repeatedly acknowledged by their letters dated 10-3-2003; 21-5-2003; 5-6-2003 and had issued cheques in discharge of their liability towards the petitioner-bank, which have also been dishonoured. In the circumstance, the company's liability towards the petitioner has been duly acknowledged and admitted. It is, thus, contended that the company's subsequent refusal to make payment is mala fide and an after thought. 14. The petitioner-bank has also brought on record that the Company is in the process of disposing of their properties as set out in para 44 of the petition, that the company was the owner of trade mark "HAKOBA" and that the company has sold their trade mark along with some of their assets and have encashed large sums of money to the detriment of its creditors. It is also alleged in the petition that the petitioner has learnt that the Company is trying to liquidate its assets in favour of its directors and also sold two flats situated in "Woodland Building" at Fedder Road, Mumbai and one vacant plot at Borivli to Mahanagar T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon clause (g) of section 118 of the N.I. Act, went on to contend that the terms 'holder' and 'holder in due course' are defined in sections 8 and 9 of the N.I. Act respectively. He urged that a holder in due course is presumed to have paid the consideration and that the respondents are estopped from disputing the liability of the bank and denying to make payment thereof. 20. The learned counsel further submits that there is no counter claim of the Company against the bank. Acceptance of the bills of exchange by the Company is not in dispute. Issuance of 15 cheques in discharge of their liability is also not in dispute. It is also not in dispute that those cheques were not honoured by Company's banker for want of funds. That the amounts realised from time to time from RR Group has been given credit of and to that extent the liability of the company is reduced. 21. Per contra, Mr. S.H. Doctor, learned senior counsel appearing for the company took me through the various paragraphs of the petition and tried to find fault with each pleading of the petitioner. He urged that nowhere in the petition the petitioner-bank has urged that they are the "holder" or "holder in due cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist at all. He submits that even if the case of the respondent is accepted in toto, it is clear that the respondent-company is a party to the transactions of creation of documents to accommodate the said RR Group. In the circumstances, it cannot be said that the defence put up by the respondent is an honest defence. He, thus, urged that the defence of the respondent should not be accepted as bona fide. He relied upon judgment of the learned Single Judge in case of Canara Bank v. Hames Enterprises [Summary Suit No. 1192/1999 dated 18-3-2002] (unreported). He, thus, submits that the entire stance is nothing but a mala fide defence. 25. Mr. Saraf further urged that pendency of the arbitration dispute between the company and RR Group has nothing to do with the recovery of the petitioner-bank since the subject outstanding dues are due and recoverable from the company itself. He, thus, submits that looking to the intention of the company to dispose of their properties from time to time, a provisional liquidator needs to be appointed during the pendency of this petition. Legal Backdrop 26. Having heard rival contentions, it is well-settled that winding up petition should not be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom whom he derived his title. 31. The perusal of the above provisions would make it clear that the maker of a bill of exchange is the drawer; the person thereby directed to pay is called the drawee; after the drawee had signed his assent upon the bill he is called the acceptor, in the absence of any contract to the contrary, the acceptor, before maturity of a bill of exchange, is bound to pay the amount thereof at maturity according to the acceptance the amount thereof to the holder on demand. 32. The "holder" is that person who in his name is entitled to possess the instrument, whereas the "holder in due course" is a person who is possessor of an instrument even when it is payable to bearer. Under the Indian law, a holder, to be a holder in due course, must not only have acquired the bill, note or cheque for valid consideration but should have acquired it without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. An endorsee for consideration can be a holder in due course means, any person who gets possession of the negotiable instrument for consideration without being an endorsee. A mere reference to section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered part of the amount due from the party accommodated, he can only recover the balance from the acceptor as held by the Apex Court in the case of American Express Bank Ltd. v. Calcutta Steel Co. [1993] 76 Comp. Cas. 768. Consideration for admission 37. Having taken prima facie survey of the legal provisions around which the subject transactions revolve, having given my anxious and careful consideration to the facts and circumstances of the case, prima facie; find no merit in the contention raised by the company which runs, thus, that the subject bills of exchange are merely accommodation bills to enable the RR Group to raise and receive finance from the petitioner-bank. Let me now consider the strength of this plea. 38. It is pertinent to note here that the company did not dispute the signatures on the documents of bills of exchange. The defence of the respondent, if accepted, would mean that to accommodate the said RR Group, the respondent signed those documents knowing that the documents were capable of being used by the said RR Group for withdrawing money from the bank. Thus, even if the case of the company is accepted in toto, it is clear that the company is a party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques. When the cheques are issued, the presumption is that they are issued for valuable consideration. It is not in dispute that the petitioner-bank has parted with money as such it is futile to contend that the bills of exchange are without any consideration. The plea in this behalf is also untenable and by no stretch of imagination it can be accepted by any judicial mind. 42. Now, let me turn to the conduct of the respondent to find out as to whether the dispute is bona fide. The petitioner-bank was asked by the respondent-company not to put the cheques for encashment and assured them of payment of their dues. In two letters written by them to the petitioner-bank, there is absolutely no whisper disputing their liability. On the contrary, tenor of the letters would show that the respondent wanted time to make arrangement since one of their directors was in hospital. 43. When the bills were presented, Mr. Bipin H. Kapadia, Executive Director of the respondent-company, who is party to the counter affidavit filed before this Court, stated before the Notary as under : ".....My company is not paying because my company does not owe and apart there are many litigations pending in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para 44 are perused in the light of mere denial to those allegations without specific denial, one has to reach to the conclusion that the respondent-company does not want to discharge its admitted liability and in the process wants to dispose of its properties. As such, petitioner would be entitled to claim interim relief in terms of prayer clause (c) therefore, one has to conclude that the defence taken by the Company is frivolous moonshine which on the face of it cannot be accepted and it clearly being an afterthought, the same cannot be termed as raising bona fide dispute. The petitioner has made out a prima facie case for admission of the petition. It, therefore, needs to be admitted. 46. In the result, petition is admitted. It is to be advertised in Indian Express and Navshakti. Petition is made returnable on 27-3-2007. Petitioner to deposit Rs. 10,000 with the Prothonotary and Senior Master within four weeks from today towards cost of publication. 47. There shall be interim relief in terms of prayer clause (c) of the petition. 48. At this stage, Mr. Doctor, learned senior counsel for the Company prayed for stay of this order for two weeks. The said prayer is opposed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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