CREDIT AGRICOLE INDISUEZ Vs. CREDENTIAL FINANCE LTD

JUDGEMENT

(1.) THIS Appeal is directed against the order dated 27th March, 1998 passed by the learned Single Judge of this Court in Company Petition No.265 of 1997. That Company Petition was filed by the present Appellant under Sections 433 and 434 of the Companies Act.

(2.) THE Appellant submitted in its Petition that it is a Banking Company incorporated with limited liabilities under the law relating to incorporation of such companies in France and that they have a branch office in Mumbai. The Respondent had an account at the Bombay branch of the Petitioner. On Friday, 29th March, 1996, the Respondent, which is the company incorporated under the Companies Act deposited a cheque dated 28th March, 1996 in the amount of Rs.1,22,45,466/- in its account with the Petitioner Bank for collection. The said cheque was drawn in favour of the Respondent/ company by one Yojan Finance & Corporate Services Pvt. Ltd. on the State Bank of India's Juhu Tara Branch. According to the Petitioner, the said cheque was presented by the Petitioner in the MICR Outward Clearing of the National Clearing Cell of the Reserve Bank of India. According to the Petitioner, as the cheque was drawn on the State Bank of India, Juhu Tara Branch, the said cheque was not likely to be returned on 30th March, 1996, which was a Saturday. According to the Petitioner, next three days i.e. 31st March, 1996, 1st April, 1996 and 2nd April, 1996 were holidays for the purpose of banking transaction and clearing of cheques. Therefore, no clearing took place on these three days. The next banking working day was 3rd April, 1996. According to the Petitioner, in case that cheque was dishonoured, the State Bank of India should have communicated that fact to the Petitioner through the National Clearing Cell on 3rd April, 1996. But no such communication was received. On 4th April, 1996 assuming that the cheque must have been cleared, at the request of the Respondent/ company, the Petitioner/ bank issued three pay orders aggregating to Rs.1,19,62,500/-. It is pertinent to note here that the pay order No.602018 for Rs.1,09,00,000/- was in favour of the Respondent/company itself. According to the Petitioner, the Petitioner learnt about the dishonour of the said cheque on 4th April, 1996 from the clearing statement received by the Petitioner from the Clearing House. The next day i.e. 5th April, 1996 was also a public holiday. The three pay orders issued by the Petitioner were encashed by the Respondent/ company. On 15-6-1996, according to the Petitioner, the Petitioner issued a letter to the Respondent/ company immediately demanding the amount of the pay orders. Then, correspondence ensued between the parties. The Respondent denied its liability to pay the amount to the Petitioner/ bank. The Petitioner filed Civil Suit No.4316 of 1996 for recover of the amount against the Company as well as the State Bank of India. The Petitioner also issued a statutory notice to the Respondent/ company, which was duly received by the Respondent/ company. The statutory notice, according to the Petitioner, was not complied with by the Respondent/ company. Therefore, Company Petition No.265 of 1997 was filed in this Court. That Company Petition was decided by this Court by its order dated 27th March, 1998.

(3.) THE learned Counsel appearing for the Appellant/ original Petitioner submits that the Respondent does not dispute that the cheque deposited by it in its account has been dishonoured. It also does not dispute that three pay orders were issued in its favour by the Appellant. It also does not dispute that the pay order in the amount of Rs.1,09,00,000/- was in favour of the Respondent/company itself. In the submission of the learned Counsel, therefore, the Respondent/company cannot deny its liability to pay the amount of pay orders to the Appellant. According to the learned Counsel even assuming that the pay orders were issued without even the Respondent/company depositing the cheque, then also the Respondent/company is bound to pay to the Appellant the amount of the pay orders. The learned Counsel relies on the judgment of the Supreme Court in the case of Madhusudan Gordhanda and Co. vs. Madhu Woolen Industries Pvt.Ltd., 1972 Company Cases (Vol. 42), page 125, and submits that the Appellant was entitled to have the Petition admitted, because there was virtually no defence put up by the Respondent. In so far as the Respondent's liability to pay the amount of pay orders to the Petitioner is concerned, the learned Counsel also relies on the judgment of the Delhi High Court in the case of V.K. Jain vs. Richa Laboratories (P.) Ltd., 1993 Company Cases (Vol. 78), page 283, that merely because the Civil Suit is filed will not debar the Petitioner from filing the Company Petition claiming an order of winding up of the Company, because the Company is not in a position to pay its debts.