1982 (4) TMI 250 - HC - Companies Law

Applicability of Code of Civil Procedure, Cost and expenses payable out of assets in a winding-up by Court

Summary

Issues Involved:
1. Loan Agreement and Repayment
2. Execution and Validity of Hundis/Promissory Notes
3. Statutory Notice and Company's Response
4. Affidavit-in-Opposition and Inconsistencies
5. Alleged Receipt and its Authenticity

Detailed Analysis:

1. Loan Agreement and Repayment
The petitioner lent and advanced a sum of Rs. 45,000 to M/s. Synthetic Wire Industries P. Ltd. on May 15, 1981, at an agreed interest rate of 18% per annum. The company, along with its then board of directors, executed a hundi and/or promissory note for Rs. 45,000 to secure the repayment. Despite the service of the statutory notice under section 434 of the Companies Act, 1956, the loan remained unpaid.

2. Execution and Validity of Hundis/Promissory Notes
The petitioner's case was supported by various company records, including minutes from board meetings and a letter from the company acknowledging the loan. The minutes from the board meeting on May 18, 1981, confirmed the loan taken at 18% interest, repayable by September 16, 1981. The letter dated September 25, 1981, from the company, admitted the loan but cited a lack of funds for non-repayment. The company attempted to argue that the hundis were not properly stamped, but the court found them to be adequately stamped and admissible as corroborative evidence.

3. Statutory Notice and Company's Response
A statutory notice was sent to the company on November 16, 1981. The company's reply, dated December 4, 1981, contained inconsistent statements. It denied the loan but also claimed that Meghraj Berlia and others had already settled the petitioner's claim. The court noted these inconsistencies and found the company's reply contrary to its own records.

4. Affidavit-in-Opposition and Inconsistencies
The affidavit-in-opposition, affirmed by Mohit Kumar Berlia, contained statements inconsistent with the company's records. It claimed the loan was actually lent to the Berlias in their personal capacity, and the company signed the loan document at the petitioner's request. The affidavit also alleged an agreement between the petitioner and the Berlias for repayment, which was not mentioned in the statutory notice reply. The court found these claims to be incomprehensible and inconsistent.

5. Alleged Receipt and its Authenticity
The company produced a receipt allegedly signed by A. Chakraborti, acknowledging full settlement of the loan. The court examined the receipt and found it suspicious, noting it was written in different inks and likely signed at an earlier date. The court concluded the receipt was not genuine. Moreover, the petitioner stated that A. Chakraborti was not authorized to receive the payment, and no authorization was shown by the company.

Conclusion:
The court found the company's defense to be unbelievable and characterized it as a "cock and bull story." The inconsistencies in the affidavit-in-opposition and the dubious receipt led the court to reject the company's contentions. The petition for winding up the company was admitted, and the order for advertisement was made, with specific instructions for publication and a returnable date set eight weeks hence.