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High Court Of Calcutta
Ashim Kumar Banerjee
DAULATRAM RAWATMULL PVT.LTD. - Appellant
Versus
PEERLESS GENERAL FINANCE AND INVESTMENT CO.LTD. - Respondent
C. P. 526 Of 1999
Decided On : 03/21/2003
COMPANY LAW - WINDING UP - JUST DEBT - BONA FIDE DISPUTE - WHETHER THE COMPANY LIABLE TO PAY THE LOAN AMOUNT TO THE PETITIONER - WHETHER THE CLAIM WAS SECURED BY COLLATERAL SECURITY - WHETHER THE WINDING UP PETITION WAS MAINTAINABLE.
Fact of the Case:
The petitioner lent Rs. 50 lakhs to the company at an agreed interest. The company defaulted on payment and the petitioner issued a statutory notice of demand for Rs. 25 lakhs on account of the principal amount and Rs. 11,69,353.27 on account of interest. The company denied liability, claiming that the liability was premature and asked for withdrawal of the statutory notice.
Finding of the Court:
The court found that the letter dated 11th November, 1994, relied upon by the company, did not create an obligation on the petitioner not to claim back the loan amount unless and until the same was repaid by M/s. Eastern Sugar and Industries Ltd. The court also found that the company had not been able to demonstrate that the said amount was not payable and would become payable only when they would receive payment from Eastern Sugar Mills.
Issues: 1. Whether the claim raised by the petitioner was a just debt due to them? 2. Whether there was a bona fide dispute between the parties? 3. Whether the claim was secured by collateral security? 4. Whether the winding up petition was maintainable?
Ratio Decidendi: 1. The court held that the claim raised by the petitioner was a just debt due to them as the amount was not in dispute and the only defense raised by the company was that the amount was not payable so long it was not paid by the eastern Sugar. 2. The court held that there was no bona fide dispute between the parties as the letter dated 11th November, 1994, relied upon by the company, did not create an obligation on the petitioner not to claim back the loan amount unless and until the same was repaid by M/s. Eastern Sugar and Industries Ltd. 3. The court held that the claim was not secured by collateral security as a creditor who has a just claim can apply for winding up and a collateral security for the claim cannot operate as a bar in presenting a winding up petition. 4. The court held that the winding up petition was maintainable as the petitioner had a just debt due to them and there was no bona fide dispute between the parties.
Final Decision: The petition was admitted for the principal sum of Rs. 25.00 lakh together with accrued interest @22% on and from 1st April, 1999 till the date of the presentation of the petition and thereafter @10% per annum until realization. The petitioner would also be entitled to balance of the accrued interest for period 20th December, 1994 to 31st March, 1999 aggregating to Rs. 11,69,353.27.
( 1 ) A sum of Rs. 50. 00 lakhs was lent and advanced by the petitioner to the company at an agreed interest. The said deposit was rolled over from time to time. Initially the company could not make payment of the interest as well as the principal amount. Ultimately, a sum of Rs. 25. 00 lakhs was paid on account of principal leaving a balance sum of Rs. 25. 00 lakhs together with interest. The petitioner through its advocate raised a statutory notice of demand dated 3rd April, 1999 inter alia demanding Rs. 25. 00 lakhs on account of balance of the principal amount and Rs. 11,69,353. 27 on account of balance of the interest payable during the period 20th December, 1994 to 31st march, 1999. The company through its Advocate denied its liability as according to them the liability was a premature one and asked for withdrawal of statutory notice. In the affidavit-in-opposition such consistent stand had been taken by the company. To elaborate such stand reliance was placed on a letter dated 11th november, 1994 being Annexure A to the affidavit-in-opposition appearing at pages 12 and 13 thereof. The contents of the said letter is relevant and is quoted below:"we refer to the discussion we had with you and would like to inform you that Shree Hanuman Sugar and Industries Ltd. , has its sugar factory on lease at an annual rent of Rs. 75. 00 lacs with M/s. Gobind Sugar Mills Ltd. the lease is now due to expire. They have made a fresh lease in favour of Eastern sugar and Industries Ltd. , who is now going into public for raising the funds for expansion. Shree Hanuman Sugar and Industries Ltd. , have to take over the assets of around of Rs. 400. 00 lacs from Gobind Sugar Mills Ltd. , and sell or lease out the same to Eastern Sugar and Industries Ltd. Accordingly, they have approached us to organize the funds of Rs. 100. 00 lacs jointly with M/s. Nopany Marketing Co. Pvt. Ltd. We now request you to kindly sanction and disburse us a Term Loan of Rs. 50. 00 lacs against the security of property at premises No. 12, Government place East, Calcutta - 700069 which is owned by us jointly with Nopany marketing Co. Pvt. Ltd. The title of this property is already with you and has been cleared by your and our solicitors. The funds will be utilized for taking over the assets from Gobind Sugar mills by Shree Hanuman Sugar and Industries Ltd. and lease them out to eastern Sugar and Industries Ltd. We shall pay your loan in four years after a moratorium of one year in 16 quarterly instalments. "
( 2 ) SHORT question before me raised by the company was whether the said letter created an obligation on the petitioner not to claim back the amount of loan unless and until the same was repaid by M/s. Eastern Sugar and Industries ltd. for whom the loan was taken. According to the company, since the amount was not repaid by Eastern Sugar and Industries Ltd. they were not liable to make payment of the loan amount to the petitioner.
( 3 ) ON the plain reading of the contents of the said letter quoted (supra) it would appear that the proposal for taking over the sugar mill was the cause for obtaining the loan. In short the company by the said letter justified their need. However, the repayment schedule suggested in the last paragraph of the said letter was unequivocal and did not attach any pre-condition. Apart from the aforesaid letter the company had not been able to demonstrate either from any document or from the conduct of the parties that the said amount was not payable and would became payable only when they would receive payment from Eastern Sugar Mills.
( 4 ) THERE is another salient feature which I would like to point out. Contemporaneous correspondence annexed to the pleadings would show that from time to time the company prayed for restructuring the instalment and had issued various post-dated cheques which were dishonoured for non-payment. Had there been any intention of the parties that the amount would only became payable as
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