DEUTSCHE BANK Vs. STATE

JUDGEMENT

(1.) THIS petition has been filed under sections 433 and 434 of the Companies Act with a prayer that the Company be ordered to be wound up as it is unable to pay its debts.

(2.) THE petitioners had granted to the Company a packing credit facility in foreign currency upto the limit of U. S. $ 15 lakhs. The aforesaid facility was sanctioned on 10th October, 1995. the terms and conditions for the sanction of the packing credit facility are mentioned therein. It is the case of the petitioner that in respect of the credit facility there is due and payable by the Company to the petitioner a sum of Rs. 3,20,91,096. 02 towards the principal and a sum of Rs. 37,24,234. 27 ps. towards interest upto 31st March, 1997. The Company was called upon to clear the dues from time to time. The petitioner received from the company Cheque No. 473600 dated 29th March, 1997, for the sum of rs. 3,37,65,064 drawn in favour of the petitioners to the Company account with Punjab National Bank, Bhosari Branch, Pune, with instructions to adjust the amount of the cheque towards the overdue export bills purchased payments due and payable to the petitioners. The petitioners accepted the above cheque towards the payment of their dues in pursuance to the Company's letter dated 27th March, 1997. The aforesaid cheque was dishonoured due to "insufficient funds". The petitioners stated that they had accepted the above cheque for value and the borrower has default to make payment to the petitioner in respect of their dues. By Advocate's letter dated 9th April, 1997, the petitioners called upon the company to pay the dues. In this letter it was also stated that the dishonour of a cheque is a criminal offence and that both the Company as well as the authorised signatory/director would be liable for prosecution under section 138 of the Negotiable Instruments Act, 188 i, hereinafter referred to the "the Act". Statutory notice as required under sections 433 and 434 of the Companies Act was served on the Company dated 23rd April, 1997. Another notice was sent on 16th June, 1997 to the company. However, no reply was received to the aforesaid notice.

(3.) AN affidavit to oppose the admission of the petition was filed by the Company. It is stated that the petitioners have not come to Court with clean hands and have suppressed important material facts. The company is stated to be a reputed Company. It is further stated that the company is a running Company employing about 30 employees. It is regularly paying its statutory dues. The Company is stated to be financially sound. The packing credit facility was granted to the respondent company as a composite transaction on the basis of the purchase orders placed by one Neptune General Trading (LLC) of United Arab emirates (hereinafter referred to as "neptune") Prior to the grant of the facility, the petitioners had themselves verified the purchase orders and the bona fides and/or creditworthiness of Neptune. It was only after, due verification about the soundness of the foreign party that the petitioner advanced the sum to the company. The respondent Company then procured the goods as per the purchase orders and supplied the same to Neptune. These goods were received and accepted by Neptune without any dispute or demur as regards quality or otherwise. In terms of the agreement of understanding between the petitioner and the respondent company, the petitioners were fully secured before, during and after the export in the following manner.