HI-TECH GEARS LTD Vs. YOGI PHARMACY LTD

JUDGEMENT

(1.) By means of the aforesaid petition filed under Sections 433, 434 and 439 of the Companies Act, 1956 (hereinafter referred to as "the Act"), the petitioner, Hi-Tech Gears Ltd. ("the petitioner" in short), has sought the winding up of the company, Yogi Pharmacy Limited, having its registered office at Gurukul Kangri District Hardwar ("the respondent-company" in short) on the ground that the company is unable to pay its debts and should be wound up by this court.

(2.) The petitioner's case in brief is that it is a public limited company engaged in carrying on the business of manufacturing, buying and selling automobile parts, accessories, machinery and other ingredients. On the request made by the respondent-company the petitioner advanced a sum of Rs. 40 lakhs to the said respondent as intercorporate deposit for a period of three months on an interest of 22 per cent. per annum. To secure payment the respondent-company executed documents details of which are mentioned in paragraph 6 of the petition. The respondent, however, instead of making payment sought further extension of time by one month. The extension was granted subject to the payment of interest at the rate of 27 per cent. per annum with effect from December 20, 1995. The respondent-company, however, repaid a sum of rupees ten lakhs only and gave another cheque for Rs. 30 lakhs which was dishonoured by the bank. When contacted, the respondent undertook to pay back the entire amount of Rs. 30 lakhs in three equal monthly instalments with interest at the rate of 27 per cent. per annum with effect from January 7, 1996, As the respondent-company failed to keep its promise, the petitioner was constrained to serve a notice under Section 434 of the Companies Act on the respondent-company which was not complied with, hence the present petition.

(3.) On September 29, 1996, this court issued notices to the respondent to show cause why the petition should not be admitted and advertised. In reply to the said notice the company put in appearance and filed a counter-affidavit. Respondents Nos. 2 and 3 who are the ex-directors however, did not file any reply. The respondent-company in its counter-affidavit While not denying the receipt of Rs, 40 lakhs from the petitioner took the plea that the said amount was advanced as a loan and not as an intercorporate deposit. It was also stated that the respondent has every intention to pay back the entire amount to the petitioner but was unable to do so presently as its money is lying blocked with the overseas buyers. The respondent also took the plea that the terms of the agreement were extracted under pressure by the petitioner, and further stated that the interest of the petitioner is fully secured as it is holding shares of the respondent-company to the extent of 85,900 shares as security. It was further stated that the respondent-company is a flourishing concern employing over 300 persons and denied that it is unable to pay its debts. A rejoinder affidavit was filed on behalf of the petitioner denying the allegation that the money was advanced as a loan and not as an intercorporate deposit. It was also stated that the security of shares of 85, 900 was given by the guarantors and not by the company besides the value of shares was below par and even if it is sold at its face value it will fetch Rs. 8,50,000 and will not satisfy the dues of the petitioner.