UNITED WESTERN BANK LTD Vs. STATE OF MAHARASTRA

JUDGEMENT

(1.) THIS is a winding -up petition under sections 433 and 434 of the Companies Act, 1956.

(2.) THE case of the petitioners as set out in the petition, is briefly follows : One Everkeen Blade Company Ltd. drew eight bills of exchange all dated 17th June, 1975, the particulars whereof are given in the petition, for valuable consideration, upon the company in favour of the petitioners. The company accepted each of the said bills and undertook to pay the amount under the same. These bills were duly presented to the company on maturity, namely, on or about 18th September, 1975, for payment and payment was demanded. The company, however, failed and neglected to pay the amount of the said bills or any part of the same. The said bills were again presented to the company for payment at the company's office on 19th November, 1975. One A. Krishnamurthy, a director of the company, refused to pay the amount due under the said bill stating that he was willing to pay, "but at present there are no sufficient funds". The presentation and non -payment of the said bills was duly noted and protested under the seal of a notary, Maharashtra State. After this, the company paid to the petitioners a sum of Rs. 49,140 being the amount due under one of the bills, viz., bills No. 19. This payment was made by the company by a cheque which was forwarded by the company to the petitioners along with a letter dated 30th December, 1975. This letter will be discussed in some detail later. As per the company's directions the petitioners have appropriated the said payment of Rs. 49,140 against the amount due under the said bill No. 19. The company, however, failed and neglected to pay to the petitioners the balance of the amount. By their attorney's letter dated 25th August, 1976, the petitioners recorded the facts and called upon the company to pay a sum of Rs. 3,03,132.50 being the aggregate amount claimed by the petitioners under the remaining seven bills. By the same letter, the petitioner also called upon the company to pay interest. This notice was expressly issued under the provisions of section 434 of the Companies Act. The company has failed and neglected to comply with the requisitions contained in the said notice. The petitioners claim that they are creditors of the company in the sum of Rs. 3,24,569.75, as per particulars, exhibit A to the petition. They further allege that the company is unable to pay its debts. The petitioners have also alleged that in the last balance -sheet filed by the company with the Registrar of Companies, only the position of the company as on 31st March, 1975, is shown and that from this balance -sheet it appears that company's position is commercially unsound.

(3.) THE submission of Mr. Mody, the learned advocate for the petitioners, is that from all these affidavits it is clear that the dispute regarding the debt raised by the company is not a bona fide dispute at all and has been raised merely with a view to gain time. As against this, the contention of Mr. Chinoy, the learned advocate for the company, is that the dispute raised by the company is a serious bona fide dispute. It is urged by him that the claim of the petitioners to be the creditors of the company is hotly contested and in a case where such a claim is hotly contested, the testing of the defence cannot be done in a winding -up petition. It is contended by Mr. Chinoy that the provisions of the Companies Act cannot be availed of for the adjudication of a right to obtain payment of the amount where the establishment of such a right would require a lengthy investigation.