( 1 ) THE applicant, namely Official liquidator, representing the Company in liquidation (M/s. The Saptagiri Financiers), has filed this application under Sections 446 (2) and 583 of the Companies Act, 1956 read with Rules 9 and 11 (b) of the Companies (Court) Rules, 1959 praying for a direction to the respondents to jointly and severa1ly pay to the applicant a sum of Rs. 14,55,750/- along with interest thereon at the rate of 18% per annum from 29-3-1997 till the date of rea1ization.

( 2 ) THIS Court, by order dated 26-11-1999, passed in C. P. No. 11 of 1999, ordered winding up of the applicant-company. It is stated in the affidavit filed in support of the application, that as per the information available from the files of the company in liquidation, late Sri. S. Narasimhulu Chetty and Sri. S. Nanda Gopa1 Chetty and their children, who are the respondents herein, have obtained a loan of Rs. 9,00,000/- from the applicant by executing a Mortgage deed, scribed in Telugu, for expansion of their business and clearing of their debts, and that the said amount was paid to the executants in two spells - Rs. 5,00,000/- by way of Cheque No. 417109, dated 10-11-1994 and Rs. 4,00,000/- by way of cheque No. 417829, dated 2-12-1994. It is further stated that the loanees while acknowledging receipt of the loan amount, paid an amount of Rs. 22,500/- towards interest for the period from 10-11-1994 to 9-12-1994 by way of Cheque No. 417285, dated 6-12-1994. According to the applicant, as per the information furnished in the list of Debtors/statement of Affairs/statement of Account by the ex-partner of the company in liquidation, the respondents have to pay the applicant a sum of Rs. 14,55,750/- as on 29-3-1997. It is their further case that the notices sent to the respondents demanding the amounts due and payable, were served on respondent Nos. 1, 3, 4 and 5 and while the notices in respect of respondent Nos. 2 and 6 returned unserved, and that till the date of filing of this application, the respondents have not made any payment, and as such, they are liable to pay the amounts mentioned in the application.

( 3 ) IN pursuance of the notice ordered by this Court, the respondents entered their appearance through a Counsel and filed counter. In the counter filed by respondent no. 1 on behalf of the respondents, he is denied the averments made by the Official liquidator in support of his claim. It is stated that they have no knowledge of the Company Petition and the winding up of the applicant-company. Respondent No. 1 in his counter avers that respondent Nos. 2 and 3 are his brothers, while Respondent nos. 4 to 6 are the children of his eldest brother, who died in the year 1997. He denied the execution of the Mortgage Deed in favour of the applicant and the receipt of the loan amount of Rs. 9,00,000/- mentioned in the Mortgage Deed, for developing their family business and clearing their loans, and contended that they have no connection whatsoever to the loan transaction. He states that as All the family members got separated long back and are living separately, the question of they executing Mortgage Deed jointly and receiving loan amount, and more particularly, for developing their business, does not arise. It is stated that the Mortgage Deed is a collusive document, which is not supported by any valid attestations and passing of any consideration. They have not received any amounts mentioned in the Mortgage deed and at no point of time have they given any authorization to late Sri S. Narsimhulu Chetty and late Sri Nand Gopal chetty either to borrow the loan amount or issue cheques or receipts on behalf of them. The counter A1so denies payment of interest of Rs. 22,500/- to the applicant in connection with the loan transaction. The documents indicating borrowing of loan and payment of interest, relied upon by the applicant in support of their claim, according to the respondents, are sham, and cannot be looked into, more so when Mo