DEUTSCHE BANK AG Vs. SUNMICK EXPORTS P LTD

JUDGEMENT

(1.) THE petitioners have filed this winding up petition against the company alleging that the cheque in an amount of Rs. 3,37,65,064, dated March 29, 1997, when presented for payment to the bank was dishonoured on account of insufficient funds. It is the case of the petitioners that they had given what is known as a packing credit facility to the company in order to meet certain export orders received by the company. Though a statutory notice was served on the company under Section 434 of the Companies Act, 1956, no reply was sent and consequently the present company petition.

(2.) AN affidavit has been filed on behalf of the company by one Mr. Dattat-raya Sondekar. In paragraph 3 (b) of the affidavit, it has been alleged that in terms of the agreement of understanding between the petitioners and the company, the petitioners were fully secured before, during and after the export by hypothecation of goods and other securities as set out therein. This included a direct assignment of the monies payable by Neptune General Trading, the foreign party, by drawing a bill of exchange directly in favour of the petitioners and the same being accepted by Neptune General Trading thereby discharging the respondent-company of any initial liability. It is alleged that without any cause or reason, Neptune General Trading had delayed payment though never denying their liability. It is also alleged that the company has to recover and receive large sums of money from various other debtors also. It is alleged that the company is a financially sound company. It is alleged that before granting the packing credit facility, the petitioners had verified the purchase orders and the bona fides and worthiness of Neptune General Trading and after due verification had advanced the sums to the company. It is further contended that in terms of the arrangement the petitioners had received money from Neptune General Trading. An additional affidavit has been filed on behalf of the petitioners. In that, the petitioners have pointed out that they had purchased six export related bills of exchange under the export packing credit facility granted to the respondent-company. It is pointed out that they have received one amount on April 16, 1996, in respect of which they have given credit to the company. It is further pointed out that after the filing of the petition, they have received on November 6, 1997, another payment for which also they will give credit to the company.

(3.) AT the hearing of the petition, on behalf of the petitioners it is contended that the company had in respect of the amount advanced, issued to the petitioners, the cheque dated March 29, 1997, which was dishonoured by forwarding letter of March 27, 1997. The bills of exchange which are purchased, it is pointed out, are much earlier to the issuance of the cheque. On behalf of the company it is contended that it is true that the company availed of the packing credit facility. It is further pointed out that there was a novation of the contract inasmuch as the petitioners after having purchased the bills were directly to deal with Neptune General Trading. Attention is invited to instructions given by the petitioners to their bankers abroad to remit the money received in favour of the petitioners' account in New York. In the light of that it is contended that there is no amount due and payable by the company to the petitioners. It is further contended that the cheque was given and was not to be encashed. In support of this contention learned counsel for the company has invited my attention to the various provisions of the Negotiable Instruments Act, 1881, more specifically Sections 31, 34, 64, 134 and 135.