1998 (8) TMI 490 - HC - Companies Law

Summary

Issues Involved:

1. Locus standi of the petitioner to file the winding-up petition.
2. Whether the dues of the transferor-company have become time-barred.
3. The liability of the respondent-company to pay interest after the expiry of the intercorporate deposit period.
4. Compliance with Rule 21 of the Companies (Court) Rules, 1959.

Detailed Analysis:

1. Locus Standi of the Petitioner:

The petitioner, Fortis Financial Services Limited, sought the winding up of the respondent-company under sections 433(e) and 434 of the Companies Act, 1956, on the grounds of unpaid debts. The respondent contended that the petitioner had no locus standi as it was not a creditor. However, the court noted that the petitioner had merged with Empire Finance Company Limited, and the scheme of amalgamation was approved by the Bombay High Court and the Delhi High Court. The relevant order stated: "with effect from the appointed date all the debts, liabilities, duties and obligations of the transferor-company may be transferred without further act or deed to the transferee-company." This transfer included the right to recover debts, thus giving the petitioner locus standi to file the petition.

2. Time-Barred Dues:

The respondent argued that the dues were time-barred. However, the court found that the respondent had acknowledged the debt in a letter dated August 4, 1995, which stated, "the account will be cleared very shortly." This acknowledgment extended the limitation period under section 18 of the Limitation Act. The court dismissed the respondent's contention that the acknowledgment was invalid due to the signatory's authority, noting that the letter was on the respondent's letterhead and signed by the Assistant Vice-President (Finance), a senior executive.

3. Liability to Pay Interest:

The respondent contended that it was not liable to pay interest after the expiry of the intercorporate deposit period and that interest claims were not debts unless adjudicated. The court did not delve deeply into this issue at this stage, as the primary matter was whether a prima facie case existed for admitting and advertising the petition under rule 24 of the Companies (Court) Rules, 1959. The court noted that the respondent had admitted to owing Rs. 88,310, which remained unpaid despite statutory notice, thus establishing prima facie grounds for the petition.

4. Compliance with Rule 21 of the Companies (Court) Rules, 1959:

The respondent argued that the petition was not maintainable as it did not comply with Rule 21 of the Companies (Court) Rules, 1959. The court did not find merit in this argument at this stage, focusing instead on the prima facie case for admitting the petition.

Conclusion:

The court found that a prima facie case was made out for admitting the petition and advertising it. However, to mitigate serious repercussions for the running company, the court ordered that the petition would not be advertised for two months if the respondent deposited Rs. 88,310 with the court within six weeks. If the amount was not deposited, the order for advertisement would become operative. The case was listed for further orders after six weeks.