KRISHNA TEXPORT INDUSTRIES LIMITED Vs. DCM LIMITED

JUDGEMENT

(1.) THE FACTUAL BACKGROUND IN WHICH THE AFORESAID TWO APPLICATIONS ARE FILED MAY FIRST BE NOTED.

(2.) WINDING UP PETITION (CP NO.11/1999) WAS FILED BY THE PETITIONER AGAINST THE RESPONDENT COMPANY UNDER SECTIONS 433 (E) AND 439 OF THE COMPANIES ACT, 1956 (FOR SHORT `THE ACT') ON THE ALLEGATIONS THAT IT HAD ADVANCED A SUM OF RS.2,50,00,000/- BY TWO CHEQUES DATED 26TH SEPTEMBER, 1997 AND 3RD OCTOBER, 1997 OF RS.1,25,00,000/- EACH BEING INTER CORPORATE DEPOSITS (ICDS). THE RESPONDENT COMPANY EXECUTED TWO PROMISSORY NOTES DATED 26TH SEPTEMBER, 1997 AND 3RD OCTOBER, 1997 REPRESENTING THE AFORESAID AMOUNTS. AT THE REQUEST OF THE RESPONDENT COMPANY, M/S DCM INTERNATIONAL LIMITED, A SISTER CONCERN OF THE RESPONDENT COMPANY, ALSO PLEDGED WITH THE PETITIONER 7 LAC SHARES OF RS.10/- EACH OF M/S DCM DAEWOO MOTORS LIMITED UNDER SHARE CERTIFICATE NO.124708 TO 124710 WITH DISTINCTIVE NUMBER OF SHARES AS 20020231- 20720230 AS SECURITY TOWARDS THE AFORESAID TWO DEPOSITS. THE SAID ICDS WERE FOR A PERIOD OF 120 DAYS AND THE RESPONDENT COMPANY WAS TO REPAY THE SAME TOGETHER WITH INTEREST AT THE RATE OF 25.5 PER CENT PER ANNUM AND IN CASE OF DEFAULT, THE RATE OF INTEREST WAS TO BE ENHANCED BY ADDITIONAL 11 PER CENT PER ANNUM. CERTAIN CHEQUES WERE ISSUED WHICH WERE DISHONOURED. THEREAFTER, ONLY A SUM OF RS. 5 LACS WAS PAID TO THE PETITIONER ON 1ST AUGUST, 1998. THE PETITIONER MADE DEMAND FOR THE BALANCE AMOUNT TOGETHER WITH INTEREST, THUS DEMANDING A TOTAL SUM OF RS.3,15,02,226/- AS ON 10TH AUGUST, 1998. EVEN STATUTORY NOTICE WAS ISSUED. SINCE NO AMOUNT WAS PAID, THE PETITION FOR WINDING UP HAS BEEN FILED.

(3.) THE RESPONDENT COMPANY APPEARED AFTER SERVICE OF NOTICE AND FILED THE REPLY. HOWEVER, DURING ARGUMENTS, THE AFORESAID LOAN TRANSACTION WAS NOT DISPUTED AND WHAT WAS STATED THAT THE COMPANY HAD RUN INTO FINANCIAL DIFFICULTIES AND THEREFORE NOT IN A POSITION TO PAY THE CONTRACTUAL RATE OF INTEREST. ORDER DATED 5TH OCTOBER, 1999, REFLECTIVE OF THIS POSITION, WAS PASSED AND REPRODUCTION THEREOF WOULD BE APPOSITE AT THIS STAGE: