DENA BANK Vs. KHATAU DYES AND FIBRES LIMITED

JUDGEMENT

(1.) THIS is a creditors petition for winding up of The Khatau Dyes and Fibres Ltd. , (hereinafter referred to as "the Company") under section 439 read with sections 433 (e) and 434 of The Companies Act, 1956 (hereinafter referred to as The said Act)

(2.) THE Company is a wholly owned subsidiary of The Khatau Kakanji Spinning and Weaving Co. Ltd. (hereinafter referred to as Khatau Mills ). The Company has been incorporated and registered under the provisions of the said Act having authorised capital of Rs. 10,00,000/- divided into 10,000 Equity Shares of Rs. 100/- each and the issued, subscribed and paid up capital of Rs. 1,00,000/- divided into 1000 Equity Shares of Rs. 100/- each with the object to carry on business of spinners and doublers of fibre substances, makers of bleaching, dyeing, printing and processing materials and of buying, selling, importing and exporting yarn, cotton and other cotton staple fibre, yarn, waste, silk, artificial silk, rayon, nylon, wool, jute and other fibre substance materials. Between the month of February, 1987 and June, 1987, the Company draw 47 D. A. Bills of Exchange amounting to Rs. 1,29,76,000/- which were duly accepted by one M/s. Fashion Prints Ltd. The said Fashion Prints Ltd. honoured only 14 D. A. Bills of Exchange out of the said 47 D. A. Bills of Exchange and paid only the sum of Rs. 33,00,000/- to the petitioners leaving the remaining 33 D. A. Bills of Exchange amounting to Rs. 96,38,013/- unpaid by them. The Company as drawer of the said 33 D. A. Bills of Exchange was bound and liable to pay to the petitioners the amounts of the said D. A. Bills of Exchange togetherwith interest thereon. Further, between the month of October, 1987 and December, 1987, the Company drew 20 D. A. Bills of Exchange on the said Khatau Mills amounting to Rs. 76,06,623/- which were duly accepted. The said Khatau Mills did not honour the said D. A. Bills of Exchange on their maturity and the Company as drawer the of was bound and liable to pay to the petitioners also the amounts of the said 20 D. A. Bills of Exchange together with interest thereon. The petitioners had granted a Cash Credit Hypothecation facility to the Company in respect whereof the sum of Rs. 1,29,798. 77 with further interest at the rate of 16. 5% per annum was found due and payable by the Company to the petitioners as on 30th June, 1988. As on 30th June, 1988, an aggregate sum of Rs. 82,52,483/- together with further interest to be calculated at the rate of 17. 5% per annum on Rs. 76,06,623/- as from 1st July, 1988, an aggregate sum of Rs. 1,16,67,341/- together with further interest to be calculated at the rate of 19. 5% per annum on Rs. 52,97,631/- and at the rate of 17. 5% per annum on Rs. 43,40,382/- as from 1st July, 1988 an aggregate sum of Rs. 1,29,798. 77 in respect of the Cash Credit Hypothecation Facility granted to the Company with further interest thereon at the rate of 16. 5% per annum to be calculated as from 1st July, 1988 because due and payable by the Company to the Petitioners. The petitioners several times and finally by their Advocates letter dated 23rd September, 1988 called upon the Company to pay to the petitioners the said amounts. The Company despite having received the said letter dated 26th September, 1988 failed and neglected to make the payment of the said amounts to the petitioners. By its letter dated 28th November, 1988, the Company requested the petitioners to bear with it and assured that the payment of the dues of the petitioners would be shortly made. The Company did not pay the said amounts to the petitioners. Since the Company was unable to pay its debt, on 25th January, 1989, the petitioners presented this petition for the Company being would up under the provisions of the said Act.

(3.) ON 7th August, 1989, the Company acknowledge and admitted that the sum of Rs. 2,30,43,588/- was due and payable by it to the petitioners as on 30th June, 1989 which the Company agreed to pay to the petitioners together with further interest thereon in instalments as provided for in the Consent Terms signed by the petitioners and the Company on 7th day of August, 1989 and filed in this Court on that day. On 7th August, 1989, Order in terms of the said Consent Terms was passed by this Court. As per the said Consent Terms, the Company became liable to pay to the petitioners the said sum of Rs. 2,30,43,588/- and interest in instalments as mentioned therein which the Company failed and neglected to pay. Neither the said Khatau Mills nor even Sunit Chandrakant Khatau made any payment on behalf of the Company to the petitioners under the said Consent Terms. The petition accordingly stood admitted and the same has been duly advertised.