GANAPATI COMMERCE LTD Vs. BANK OF RAJASTHAN LTD

JUDGEMENT

(1.) The Court : In this application the petitioner has prayed for winding-up of the company on the basis of allegations that having acknowledged its dues to the petitioner, the company had failed to pay its debt and that the company was insolvent and its continuance to exist constituted a threat to the commercial morality of the public. It would appear from the pleadings of the parties that, between October 17, 1994 and January 19, 1995 the petitioner had advanced and the company had received an aggregate sum of Rs. 4,25,00,000 by way of a 'packing credit loan'. The loan was to be repaid by the company, in terms and conditions of the agreement between the parties, by submitting export documents within a month from the date of the advance, and in any event within 180 days therefrom. Except for a sum of Rs. 22,20,000, inspite of demands, the company had failed to pay any portion of the balance amount of Rs. 4,02,80,000. According to the petitioner the company was indebted to the petitioner for an aggregate sum of Rs. 6,56.76007. On the basis of those allegations the petitioner made an application for winding up of the company. The petitioner made a second application for winding up of the company on the allegations that the company was unable to pay to the petitioner a sum of Rs. 1.50.62.908, being interest on the original dues up to December 31.1996 computed at the agreed rate. The dues which had accrued by way of interest in terms of the agreement between the parties, the petitioner had debited the amount in an overdraft account of the company, maintained by the petitioner in its books of accounts. The parties jointly requested, and the two applications were heard analogously and are disposed of by this order. The petitioner alleged that it had made several demands for repayment of its dues but the company did not and was unable to make any payment. Advocate for the petitioner argued, that the company did not reply to the statutory notice of demand, and that no defence of any worth had been made out by the company in its affidavit in opposition.

(2.) Advocate for the company submitted that though the applications before this court were in the nature of winding up applications, in effect the petitioner was interested in recovering its dues, and that by reason of the provisions contained in the Recovery of Debts, Dues to Banks and Financial Institutions Act, 1993, the two applications for winding up were not maintainable and were liable to be returned to the appropriate Tribunal, constituted to hear and dispose of such matters. He specifically placed and relied on sections 17 & 18 of the Act. He contended, that the legislature had categorically barred the intervention by the law-courts in any matter relating to or concerning the recovery by the banks of any debt due or payable, to the banks.

(3.) Appearing on behalf of the bank, advocate for the petitioner submitted that the bank had made applications where the only prayer was for winding up of the company, and no where in the petitions was there any prayer for recovery of its dues or debt. He argued that while the Act was in respect to recovery of the dues and debts of the banks, the Tribunal did not have the capacity to order winding-up of the company, nor would that application, if made before the Tribunal, be an application representative in nature and consequently the creditors of the company would be left in the dark. He contended, that having admitted the claim and being unable to make out any defence, the company was aware that in terms of the relevant provisions of the Companies Act it was liable to be wound-up, and that it was therefore left with no choice but to make frivolous and untenable submissions before this Court. In support of his submissions, he cited and relied on a decision reported in AIR 1995 Cal 367.