JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---By a letter dated 24th February, 1992, the petitioner agreed to grant to the respondent-company in the present case. M/s. Lloyds Steel Industries Ltd., a term loan of Rs. 5.52 crores for the purpose of enabling the respondent to construct dwelling units for its employees at Wardha. The respondent executed various documents in favour of the petitioner, including a Demand Promissory Note dated 21st August, 1992, promising to pay to the petitioner an amount of Rs. 5.52 crores with interest at the rate of 22% per annum for value received. A loan agreement dated 17th August, 1992 and a supplementary loan agreement also of the same date were executed by the Company. On 27th August, 1992, the Chairman of the company and one of its Directors executed Guarantee Agreements by which they guaranteed the due repayment of the amount disbursed by the petitioner.

2. A letter dated 24th February, 1992 issued by the petitioner sanctioning the term loan, inter alia, stipulated that the rate of interest would be as per the guidelines of the National Housing Bank for NHB refinanceable loans and that there would be a service charge of 2%. The letter, inter alia, provided that penal interest at 2% over and above the interest charged on the loan would be payable in the event of the repayment schedule not being adhered to. The loan agreement which was executed on 17th August, 1992, provided that the applicable rate of interest would be 22% or as prescribed by the NHB on the applicable portion of the loan. The loan was repayable in 120 equal monthly instalments over a period of 10 years.

3. On the basis of the documents which were executed by the respondent, the petitioner disbursed to the respondent an amount of Rs. 5.52 crores-Rs. 1 crore on 21st August, 1992, Rs. 1.85 crores on 18th August, 1993, Rs. 1.15 crores on 10th September, 1993, Rs. 1 crore on 19th October, 1993 and Rs. 52 lakhs on 7th January, 1994. By its letters dated 1st April, 1995 and 1st April, 1998, the company has acknowledged the outstandings which are due and payable to the petitioner. In the second of those letters, the company has acknowledged its liability of Rs. 4,42,15,834/- as being amount due and payable to the petitioner. On 27th August, 1999, a demand notice came to be addressed on behalf of the petitioner by its Advocate to the respondent claiming repayment of an amount of Rs. 5,72,18,397/- together with further interest and it was also stated that the said notice was a statutory notice prior to the institution of winding up proceedings. In a reply dated 21st September, 1999 it was inter alia stated on behalf of the company that the company had made an offer to furnish additional security in favour of the petitioner in respect of the properties of the company situated at Wadala, Shivaji Park, Mahalaxmi and Sion but, that there was no favourable response from the petitioner.

4. The company has created an equitable mortgage of its immovable property admeasuring 25.15 Hectares situate at Wardha and the reference thereto is contained in a Memorandum entered into on 17th August, 1992, a copy whereof is annexed at Exh. H to the Company petition.

5. The Company petition has been instituted on the basis that, as on 27th September, 1999 when the petition was filed, an amount of Rs. 4,11, 66,156/- was due and outstanding on account of the principle and that together with the interest and other charges, a total amount of Rs. 6,10,15,192/- is due to the petitioner.

6. An affidavit in reply has been filed to the Company petition on behalf of the respondent. In setting out the defence of the company to the petition, the following submissions were urged on behalf of the respondent:

(i) By November 1997, the Company had paid to the petitioner an amount of Rs. 4.52 crores towards the repayment of the loan. This fact has not been adverted to in the company petition, nor is there any reference in the particulars of the claim to the payments which have

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