2007 (8) TMI 458 - HC - Companies Law

Winding up - refusal to repay loans of combined value of ₹ 6,05,000 - Held that - The petition is admitted for the sum of ₹ 6,05,000 together with interest at the rate of 12 per cent per annum from 15-9-2003. If the company furnishes security of the entire sum, inclusive of interest, upto the date of furnishing of security, in favour of the Registrar, Original Side, the petition will remain permanently stayed and the claim of the petitioning-creditors will stand relegated to a suit. In such event, the security will be held to the credit of the suit in the event such suit is instituted within a period of three weeks from the date of intimation by the company to the petitioners that security in terms of this order has been furnished. In default of the security being furnished within the time permitted, the petition will be advertised once in the Statesman and once in the Ajkal. Publication in the Official Gazette will stand dispensed with. The advertisements will indicate that the matter will be returnable on the next available Court day four weeks after the publication. In the event the petitioners fail to file the suit within the time permitted after receipt of information of security having been furnished, the company will have liberty to obtain discharge of the security.

Summary

Issues:
1. Petition seeking winding up of a company for failure to repay loans.
2. Alleged acknowledgment of loans in 2000 and 2003.
3. Dispute over authenticity of company documents and denial of petitioner's claim.
4. Company's defense based on criminal proceedings and lack of authenticated documents.
5. Court's decision on admitting the petition and setting conditions for repayment.

Detailed Analysis:
1. The petitioners sought the winding up of the company due to its failure to repay loans totaling Rs. 6,05,000 obtained between 1997 and 1999. The loans were allegedly acknowledged in 2000 and 2003, but remained unpaid despite a notice issued under section 434(1)(a) of the Companies Act, 1956.
2. The petitioners claimed to have provided the money for the construction of a hospital by the company in Siliguri, with an agreed interest rate of 24% per annum. They relied on letters and cheques issued by the company in 2000 and 2003, acknowledging the loans and expressing inability to repay due to ongoing development work.
3. The company denied the petitioner's claim, alleging that the petitioners were allotted shares in the company against their applications. The company's response challenged the authenticity of the documents provided by the petitioners and accused them of fabricating evidence.
4. The company's defense was primarily based on criminal proceedings it initiated against the petitioners, claiming that the documents presented by the petitioners were fabricated. However, the company failed to provide authenticated documents to support its defense, leading the court to question the validity of its claims.
5. Despite the ongoing criminal proceedings, the court decided to admit the petition and allowed the company a chance to repay the outstanding amount with interest at 12% per annum from 15-9-2003. The court set conditions for the company to furnish security for the full amount within three weeks to avoid further legal action, with the petition remaining permanently stayed if the security was provided.

This detailed analysis outlines the issues raised in the legal judgment, the arguments presented by both parties, the court's assessment of the evidence, and the final decision reached by the High Court of Calcutta.