CENTRAL BANK OF INDIA Vs. MCKENZIES LTD

JUDGEMENT

(1.) The Central Bank of India has filed the present petition for winding up of the company named Mckenzies Ltd. on the ground that the company is unable to pay the debt of Rs. 2,65,540.74 with interest thereon at the rate of 12 per cent. per annum, which appears to be due on the footing that the bank on the application of the company opened letters of credit and secured guarantees under French credit system for and on behalf of the company for the import of the company's goods. The bank at the request of the company arranged for the clearance of the company's goods ad consignments. The bank, thereafter, delivered all the relevant documents to the company against the trust receipts executed by the company and duly transferred the relative bills in advance on account of the company and the said account was, therefore, duly debited. It is on the foot of this account that the alleged claim of the bank appears to be due from the company. The bank gave statutory notice dared 28th December, 1970, under section 434(1) (a) of the Companies Act, and demanded the payment of Rs. 2,59,188.86 with interest thereon at the rate of 12 per cent. per annum. It appears that the said notice was not complied with and hence the petition for winding up.

(2.) The petition was accepted on 16th April, 1971, and was made returnable on 18th June, 1971. It appears that on the application of the petitioners, it was adjourned for two weeks by an order dated 16th July, 1971. Thereafter, the matter did not appear on board until today. Thus, between 16th July, 1971, and 13th January, 1976, a petition for winding up was not prosecuted after its presentation on 16th April, 1971.

(3.) The intervening period of several years is explained by the large number of precipes filed by the company and consented to by the bank, whereby both the bank and the company by consent have obtained adjournments from time to time ranging for a period of two weeks to eight weeks mainly on two grounds referred to hereafter.