IOCEE EXPORTS LTD. Vs. STERLING COMPUTERS LTD.

JUDGEMENT

(1.) THE company petition has been filed for winding up of the respondent -company under the provisions of Sections 433(3) and (8) and 439 of the Companies Act, 1956. The name of the respondent -company, as seen from the memo filed by the respondent -company dated 10 -8 -2000, has been changed from M/s. Sterling Computers Ltd. to M/s. Essar Teleholdings Limited with effect from 27 -11 -1997. Accordingly, the name of the respondent -company in the cause title shall stand amended substituting the name M/s. Essar Teleholdings Limited.

(2.) THE case of the petitioner is that the respondent -company has been established for the manufacture, sale and purchase of computers and accessories and its authorised capital is Rs. 50 crores made up of 5,00,00,000 equity shares of Rs. 10 each and its paid up capital is Rs. 5 crores made up of 5,00,00,000 equity shares of Rs. 10 each in which calls in arrears are to the extent of Rs. 4,500. It is stated that the respondent -company issued a letter dated 5 -11 -1993 requesting the petitioner for arranging intercorporate deposits on the terms mentioned therein and the petitioner was providing loans from 8 -11 -1993 to 8 -12 -1993 by way of cheques and pay orders. According to the petitioner, there was a mutual and running account and after giving credit to the payments made by the respondent, the respondent was liable to pay a sum of Rs. 34,95,350 as on 31 -7 -1997. It is stated that a periodical statement was sent to the respondent and the last payment made by the respondent was a sum of Rs. 5,00,000 on 22 -10 -1994. It is stated that the petitioner sent various reminders and in spite of the same, the respondent has not paid the money and the respondent was indebted to the petitioner a sum of Rs. 34,95,350 as on 31 -7 -1997, It is also stated that the respondent -company was in continuous correspondence with the petitioner from 8 -11 -1993 requesting for deposits and the respondent also wrote letters to the petitioners on 8 -11 -1993, 17 -11 -1993, 11 -5 -1994, 18 -8 -1994 and 21 -10 -1994. It is also stated that the petitioner maintained the balance on the basis of the agreement dated 5 -11 -1993 and debited the respondent -company with interest and service charges on appropriate dates and was sending statement of accounts to the respondent -company. It is stated that the respondent has never disputed the statement of accounts sent by the petitioner. It is stated that initially the respondent was prompt and regular in payment and paid a sum of Rs. 1, 25, 100 and appropriate credit was given to the respondent -company. It is stated that several cheques issued by the respondent for interest and service charges were dishonoured and returned and the petitioner refers to the cheques for a sum of Rs. 41,700 each which were returned on 9 -1 -1994 and 10 -1 -1994. It is stated that the respondent also issued cheques for a total sum of Rs. 30,00,000 which were also returned and dishonoured. It is therefore stated that the financial position of the respondent -company is in precarious condition and it is not in a position to pay the debt. The petitioner refers to its various letters dated 15 -4 -1994, 15 -7 -1994, 14 -8 -1994, 16 -9 -1994, 19 -10 -1994, 28 -12 -1994, 28 -6 -1995, 31 -7 -1995, 28 -6 -1996 and 30 -10 -1996 calling upon the respondent to settle the account and pay the intercorporate deposit with interest to the petitioner, It is stated that the account of the respondent -company was maintained as a running and mutual account and all moneys paid were given credit to and all interest and service charges were debited to the respondent as per the agreement dated 5 -11 -1993. It is therefore stated that the respondent is due to pay a sum of Rs. 33,82,598 and in spite of the statutory notice, the respondent has not paid the money. Therefore, the petitioner has filed the petition for winding up of the respondent -company on the ground that the respondent has failed to make payment even after the issue of statutory notice and the financial position of the respondent is not sound and the respondent is unable to meet its obligations as and when they fall due. Therefore the respondent -company should be ordered to be wound up.

(3.) AT the time when the matter came up before this Court, the company petition was admitted and notice was ordered and the respondent filed a counter affidavit. According to the respondent, the petitioner has agreed to provide an accommodation to the respondent by way of a temporary financial accommodation to the extent of Rs. 30 lakhs in November 1993 and the said sum was received by the respondent on various dates between 8 -11 -1993 and 17 -11 -1993 and the entire sum was repaid on 9th, 10th and 15th December, 1993 in three instalments of Rs. 10 lakhs each. It is stated that the subsidiaries of the petitioner company, namely, M/s. GTL Exports Private Limited and M/s. Season's Exports Private Ltd. raised debit notes under the head, 'service charges' for a sum of Rs. 1, 25, 100 which were also paid by the respondent. It is stated that there was no understanding for any further payment by the respondent to the petitioner, nor was there any further sum due by the respondent to the petitioner. It is also stated that the respondent required a further sum of Rs. 30 lakhs which was paid by the petitioner in the month of December 1993. It is stated that the entire sum of Rs. 30 lakhs was repaid on 20 -4 -1994. 18 -8 -1994, 21 -9 -1994 and 22 -10 -1994. It is further stated that there is no demand for payment of interest or service charges either from the petitioner or its subsidiaries as in the case of earlier intercorporate accommodation. It is stated that the transaction between the petitioner and the respondent was not commercial or business transaction either by way of loan or deposit, but a friendly accommodation of funds needed for business purposes. The respondent has set out the reasons for accommodation of the money paid to the respondent. The respondent denied the letter dated 5 -11 -1993 and stated that one K. Santhanagopalan signed the letter and he had no authority to sign the letter and Santhanagopalan resigned in the year 1996 from the respondent office and he is no longer in service of the respondent company. The case of the respondent is that the petition has been filed in the year 1997 after the change in the management of the respondent company in 1996 and the petition has been filed with mala fide intention and is motivated with an intention to gain an unfair advantage. The respondent denied that a sum of Rs. 34,95,350 is due and payable by the respondent to the petitioner. The respondent denied the correctness of the statements as erroneous. The main case of the respondent is that the petitioner has made demands after the change in the management with ulterior motive and the letter dated 8 -11 -1993 was secured after the resignation of K. Santhanagopalan and after the change in the management of the respondent company. The respondent denied that it is liable to pay interest and service charges and there is no agreement for the same. It is stated that the financial position of the respondent company is fairly sound and the respondent denied that any amount is due to the petitioner from the respondent. The respondent also enclosed a statement of accounts as per the books of account of the respondent company.