The main legal point established in the judgment is that acknowledgment of a debt by the respondent-company can extend the period of limitation for filing a winding up petition, and the obligation of the company to refund share application money constitutes an unsecured debt due and payable.

Manmohan, J.

1. Present petition has been filed u/s 433(e) read with Sections 434 and 439 of the Companies Act, 1956 (for short 'Act') stating that the respondent-company is unable to pay its debt allegedly amounting to Rs. 50,00,000/- as well as interest.

2. The facts as stated in the petition are that in the year 1994, petitioner was approached by the respondent-company's management for lending money to it at an attractive rate of interest. According to the petitioner, as he was looking for an opportunity to invest in India, he agreed to give an interest bearing loan of Rs. 50,00,000/- to the respondent-company. The petitioner issued a cheque/draft of Rs. 50,00,000/- dated 05th December, 1994 from his account in Allied Irish Bank payable at Bombay in favour of the respondent-company. The said cheque was handed over to the respondent-company's management on 08th December, 1994 and a receipt for the said cheque was issued by the Accounts officer of the respondent-company. The receipt dated 08December, 1994 issued by the respondent-company is reproduced herein below:

RECEIPT

Received Rs. 5,000,000.00 (Rs. Fifty Lakhs Only) from Mr. Bhajan Singh Samra, S/o Mr. Bikar Singh vide draft no. 735085 dt. 05.12.94 drawn on Algemene Bank, Nederland 14, Veer Nariman Road, Bombay-400023.

For Goodwill Foods Pvt. Ltd.

Sd/-

(Rajiv Singhal)

Accounts Officer

DATE: 08/12/94

3. It is stated in the petition that the aforesaid loan was given for a period of two years with interest @ 22% per annum. Upon petitioner's request for redemption of his loan with interest in 1996, respondent-company instead of redeeming the loan, offered to convert it into equity shares in petitioner's favour and also agreed to appoint petitioner as an Executive Director.

4. It is stated that as despite repeated assurances, neither the shares were issued by the respondent-company nor the petitioner was made a Director, the petitioner initiated criminal proceedings in the year 2001 against the respondent-company as well as its Directors under Sections 420 and 120-B IPC, which proceedings are currently pending before the Metropolitan Magistrate, Saket Courts, New Delhi.

5. It is the petitioner's case that it received a letter dated 21st November, 2002 and a certificate dated 23rd February, 2002 from the respondent-company's Chartered Accountant informing him that the alleged loan had been credited as Share Application Money from 1994 onwards.

6. On 09th May, 2006, petitioner sent a statutory notice u/s 434(1)(a) of the Act to the respondent-company for return of loan amount along with interest. However, despite service of statutory notice, neither the loan amount nor interest was repaid to the petitioner. In fact, on 17th July, 2006, respondent-company replied to the legal notice admitting receipt of a sum of Rs. 50,00,000/- from the petitioner, but stating that money was part payment towards Share Application Money. Accordingly, on 07th September, 2006, present petition was filed.

7. Respondent-company in its reply affidavit stated that in the present case, the pre-requisite for filing a petition under Sections 433 and 439 of the Act was non-existent inasmuch as the petitioner is neither a creditor nor any amount is due and payable to the petitioner. Learned counsel for the respondent laid emphasis on the fact that the petitioner had not filed a single document along with the petition from 1994 till 2006 alleging that the aforesaid amount of Rs. 50,00,000/- had been forwarded as a loan.

8. Learned counsel for respondent-company further submitted that the alleged claim by the petitioner was hopelessly barred by limitation as it had been filed after a gap of more than twelve years. It was further contended by the learned counsel for respondent-company that even if it was accepted that the petitioner initially did not know as to how the amount of Rs. 50,00,000/- had been treated by the respondent-company in its books of accounts, it is an admitted fact that the petitioner was aware