9911796707
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Issues Involved:
1. Whether the petitioner is a money lender requiring registration under the U.P. Regulation of Money Lending Act, 1976. 2. Whether the agreement between the petitioner and respondent was made under coercion or undue influence. 3. Whether the managing director of the respondent was authorized to agree to the interest rate of 27%. 4. Whether the petitioner held adequate security in the form of equity shares, negating the need for winding up. Detailed Analysis: 1. Money Lending Registration Requirement: The respondent contended that the petitioner, Hi-Tech Gears Ltd., needed a certificate of registration under the U.P. Regulation of Money Lending Act, 1976, to recover the loan, arguing that the petitioner was engaged in money lending. The court found this submission misconceived. The Act exempts public companies from its purview regarding loans, advances, or deposits. The petitioner's business objects did not include money lending, as evidenced by its Articles of Association, which allowed investment of surplus funds as intercorporate deposits. The court concluded that the petitioner was not a money lender under the Act and did not require registration. 2. Coercion or Undue Influence in Agreement: The respondent alleged that the terms of the agreement, including the interest rate, were extracted under pressure, suggesting coercion or undue influence. The court found this argument unsubstantiated. There were no specific pleadings or evidence supporting the claim of coercion. The court noted that the respondent had approached the petitioner for the intercorporate deposit and had agreed to the terms, including the interest rate, which was reduced upon the respondent's request. The managing director, a substantial shareholder and promoter, could not be presumed to be coerced. The court referenced case law indicating that mere need for a loan or high-interest rates do not imply coercion or undue influence. 3. Authorization of Managing Director: The respondent argued that the managing director was not authorized to agree to the increased interest rate of 27%. The court found that the managing director was authorized by the board of directors to execute necessary documents, including modifications. The increased interest rate was agreed upon when the respondent sought an extension for repayment. The court cited Calcutta High Court precedent allowing assumptions of proper authorization for directors acting within their apparent authority. Thus, the managing director's agreement to the interest rate was deemed valid. 4. Adequacy of Security in Equity Shares: The respondent claimed that the petitioner held adequate security in the form of 85,900 equity shares, which could be sold to realize the dues. The court found this security inadequate. The shares were not in marketable lots, had a lock-in period, and were quoted below par value. Even if sold at face value, the shares would fetch only Rs. 8,50,000, insufficient to cover the Rs. 30 lakhs due. The court noted that the shares were in the names of the managing director and his wife, not the company, and the transfer deeds had expired. Thus, the security was not adequate to negate the winding-up petition. Conclusion: The court found that the respondent-company did not deny its liability to pay Rs. 30 lakhs with interest and had defaulted on the statutory notice. The petition for winding up was admitted, but the publication of the advertisement was stayed for two months, provided the respondent deposited Rs. 30 lakhs in two instalments. If the respondent defaulted, the petitioner could proceed with the advertisement. The case was listed for further orders after one month.
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