CANARA BANK Vs. ARIHANT INDUSTRIES LTD.

JUDGEMENT

(1.) THE instant is a winding up petition filed by Canara Bank (along,with others) under Sections 433 and 434 of the Companies Act, 1956 ('the Act'). It is the case of the petitioners that the debts on the date of filing of the winding up petition were approximately Rs. 8 crores. The learned counsel for the petitioners has been at great pains to establish that the amount advanced by the Canara Bank and others to the respondent -company has been acknowledged by the respondent -company. It is, however, not considered appropriate or necessary to refer to any of the documents relied upon, in this behalf in view of the fact that at the very outset, Mr. R.C. Setia, the learned counsel for the respondent -company, acknowledged that now the liability of the respondent -company was approximately Rs. 8 crores as suggested by the learned counsel for the petitioners.

(2.) TO recover the aforesaid amount, the petitioners had issued a statutory notice dated 12 -2 -1997, in response to which the respondent -company paid a sum of Rs. 30 lakhs on 18 -2 -1997, which was admittedly adjusted towards interest payable by the respondent -company to the petitioners. Since the petitioners felt that the respondent -company was not in an effective position to discharge its liabilities, they filed the instant petition, whereupon this Court issued notice to the respondent -company on 10 -7 -1997. It is, therefore, clear that this matter has been pending in this Court now for over three years.

(3.) IT transpires that after the filing of the instant petition, there indeed were negotiations between the petitioners and the respondent -company, wherein the respondent -company besides acknowledging the debt it owed to the petitioners, also accepted to discharge its liability by agreeing to a schedule of payment, and indeed issued some cheques in furtherance of the schedule to assert its bona fides. In this behalf, attention of this Court has been invited to the letters dated 24 -7 -1997 and 4 -8 -1997 which have been placed on the record of this case as Annexures P1 and P2 with the replication. A perusal of the aforesaid documents reveals that there was an understanding between the petitioners and the respondent -company that the respondent -company would pay approximately Rs. 10 lakhs on a monthly basis (it is evident from the aforesaid communication that for some months, a sum of Rs. 20 lakhs and a sum of 15 lakhs, respectively, were also indicated for repayment by the respondent -company to the petitioners). Despite the assurances indicated in the letters dated 24 -7 -1997 and 4 -8 -1997, no payments were released by the respondent -company to the petitioners. In fact it is the express claim of the learned counsel for the petitioners that no cheques were issued by the respondent -company in fulfilment of the aforesaid undertaking.