Sanjib Banerjee, J.

The parties are not to blame for this creditor’s winding-up petition having lingered for an unnecessary length of time and there being a more protracted hearing than is ordinarily called for in a matter of this kind. It was only an observation of the court that led to a relatively innocuous matter being blown out of proportion upon the court considering it to be significant that subsequent to the present petition being instituted the creditor applied elsewhere for an order in the nature of attachment before judgment against the company and the persons who guaranteed repayment of company’s dues to the petitioner. Further, the fact that the petitioning creditor obtained a substantial order in its favour in the subsequent proceedings also weighed with the court at the initial stage of the final hearing. The cobwebs have, hopefully, now been cleared and the matter seen in proper perspective.

The petitioning creditor is a non-banking financial company which claims to have granted credit facilities in excess of Rs.4 crore to the company in terms of a sanction letter of September 17, 2009 and the subsequent loan agreement of October 5, 2009. The agreement recognised a maximum credit of Rs.5 crore being granted by the petitioning creditor to the company at an interest of 12.50 per cent per annum with 3 per cent per annum additional interest being payable in case of delayed payment of instalments. The agreement was backed by the personal guarantees executed by two directors of the company and the purpose of the loan was to enable the company to meet its working capital requirements.

The loan was partly secured by the company by a pledge of a fixed deposit held in the name of the company in HDFC Bank Limited for a sum of Rs. 75 lakh. The tenure of the loan was extended on September 28, 2010 and in January, 2011 the company requested the petitioning creditor to renew the facility for a further period of six months to which the petitioning creditor acceded by its letter of January 27, 2011.

The petitioning creditor claims to have disbursed the sums of Rs.1,08,38,891, Rs.1,65,83,561 and Rs.2,25,37,125 in three tranches. The payments are said to have been made in February and March, 2011 to creditors of the company on the written instructions of the company. Cheques issued by the company in purported repayment of such sums and the interest thereon were dishonoured upon presentation in June and July, 2011. In July, 2011 the company requested the petitioning creditor to liquidate the fixed deposit and adjust the proceeds therefrom against the amount outstanding from the company to the petitioner. The company has adjusted such sum of Rs.92.54 lakh from the amount disbursed of Rs.4,99,59,577 and claims the balance principal sum of Rs.4,07,05,062 and the interest thereon at the rate of 15.50 per cent per annum.

In the company’s affidavit-in-opposition to the petition, there is an admission of the payments made by the petitioning creditor to the other creditors of the company on the company’s instructions. There is also an admission of the cheques issued by the company being dishonoured on presentation, though the company has contended, in an apparent show of desperation on its part, that there was some unwritten arrangement between the parties that the cheques would not be presented without prior intimation to the company. The company has also alleged that the presentation of the cheques by the petitioning creditor was “incorrect and illegal” but it has, understandably, not been able to elaborate on such assertion. There is, indeed, no shred of defence to the claim of the petitioning creditor indicated in the company’s affidavit. The company, however, proclaims that since there is an arbitral reference which is pending and since the petitioning creditor has obtained orders in respect of properties belonging to both the company and its guarantor-directors, the present unabashed attempt by the petitioner to reduce th