CHANCHAL DEVI. Vs. SILVER CEMENT PRIVATE LTD.

JUDGEMENT

(1.) This petition has been filed under section 439(1)(d),Companies Act, 1956 (hereinafter to be called 'the Act') by a creditor for winding up Silver Cement (P) Ltd., Jodhpur (in short, respondent company) with the averments, in short, as follows.

(2.) The petitioner deposited certain amount with the respondent company with the condition that interest @ 12% will be paid and the amount may be withdrawn at any time. The respondent company was indebted to her to the extent of Rs. 46,370 on 31 March, 1991. Thereafter, Rs. 12,751 have accrued as interest from 31 March, 1991, to 30 June, 1992. The total amount outstanding against the respondent company as unsecured loan is Rs. 59,121. In Oct., 1991, the petitioner was in need of the money and requested the respondent company and its new directors, Umesh and Dinesh Dhoot, to repay her (the) amount. They requested their father for issuing a cheque and he issued a cheque on 18 Oct., 1991, for Rs. 49,160. This amount included interest up to Oct., 1991. The director, Umesh Dhoot, requested the petitioner to present the cheque in bank after some time. She waited for 51/2 months and, there-after, deposited the cheque on 7 April, 1992. On 8 April, 1992, the cheque was returned with the remark 'payment stopped by the drawer'. She contacted the director, Umesh Dhoot, for payment of the amount of cheque and the latter told her that the company was at present running in loss and requested to wait for three months more. She waited for three months more but no payment was made. She served a notice under section 434(1)(a) of the Act upon the respondent company. Its reply was given by the respondent company, raising false, frivolous and fictitious dispute. The respondent company is unable to pay its debts.

(3.) On 13 Oct., 1992, the respondent company moved an application with the prayer that admission of the company petition may kindly be revoked and company petition be dismissed and till then, further proceedings be stayed with the averments, in short, as follows. The present directors of the respondent company, Umesh Dhoot and Dinesh Dhoot, took over the management of the respondent company on 18 Oct., 1991, from the old management represented by Sumer Mal Jain group pursuant to the agreement dated 18 Oct., 1991, containing the terms and conditions regarding liability, debts and claims relating to the period prior to the change of the management. According to it, Sumer Mal Jain group agreed that in case the actual dues payable to the Rajasthan Financial Corporation by the respondent company as on 17 Oct., 1991, exceeded Rs. 40.50 lakhs, the old management would bear the burden of such excess amount. It was also agreed that all liabilities/claims/dues including sales-tax demand in respect of the respondent company pertaining to the period prior to 18 Oct., 1991, would be met by the old management, i.e., Sumer Mal Jain group. Till 18 Oct., 1991, Sumer Mal Jain, his near relative, Vijay Raj, and his father, Dungarmal, were shareholders of the respondent company and Sumer Mal Jain was one of the directors. There were other directors, but they were outsiders, At the time of the aforesaid agreement dated 18 Oct., 1991, it was very clear in between the parties to the agreement that Sumer Mal Jain group were in the old management ; the other directors were living outside Jodhpur ; they agreed that the amounts due to the respondent company from the old management would be the responsibility of the local director, Sumer Mal Jain ; he will also recover amounts from the debtors of the respondent company to the extent of Rs. 2,56,344 and will deposit the same with the respondent company for being paid to the outside director, Shri Pawan Gupta. Reply to the notice was given clearly raising a bona fide dispute and disclosing all facts which have been concealed by the petitioner in her company petition. The petitioner was well aware about the fact that the amount of the unsecured loans were to be paid after the adjustment of the old liabilities as per the agreement dated 18 Oct., 1991. Stop payment was made pending settlement of dues between the parties. There is a genuine dispute about the amounts payable to the petitioners. The petitioner has concealed all these facts in her petition. Sumer Mal Jain and his group owed huge amount to the respondent company which far exceeds the amount due to them. There is no question of any amount being due to the petitioner. The above company petition is simple abuse of the process of the court. A winding up petition is not a mode for the recovery of debt. If the company is shown to be solvent and debt is bona fide disputed, it is not admitted. Ex parte admission of the winding up petition with advertisement thereof has serious consequences on the reputation of the company. The company petition has been advertised in Rajasthan Patrika only. Petiboner was minor when (an) amount was deposited by Sumer Mal in the respondent company in her name. At the time of the execution of the agreement dated 18 Oct., 1991, Annexure R/1, Sumer Mal assured the new directors that he would discharge the old liabilities and as such cheques were issued to his group in respect of their deposits. On verification, it was found that there were many old liabilities and the respondent company was liable for them. The dues of the Rajasthan Financial Corporation were found to the extent of Rs. 41,91,880. The petitioner was well aware of the agreement, Annexure R/1, executed in between the old management and the new management, the liabilities of the old management, i.e., her father, and until their adjustment she was not entitled to get any amount. New management has never faced any financial crisis. Old losses have been recouped and old dues have been paid to the extent of Rs. 11 lakhs. Notice under section 434 of the Act was not served at the registered office of the respondent company.