2010 (4) TMI 897 - HC - Companies Law

Whether a period of 21 days, which is the time contemplated by section 434 of the Companies Act, 1956, should be added to such date, i.e. June 19, 2006 and limitation should be reckoned after a period of three years therefrom? Held that - It is evident from paragraph 12 of the petition that the petitioner was aware that the claim could no longer be enforced since a period of more than three years had elapsed from the date of the last admitted payment. The petitioner then thought up a date and included it in paragraph 12 of the petition though there is no mention of a payment having been made in July, 2007 in the statutory notice issued in January, 2009. The statement of accounts appended to the petition at pages 18 to 20 also does not reveal that any payment had been made by the company to the petitioner during the financial year 2007-08. For a petitioning creditor to approach this equitable jurisdiction, the person must come with clean hands and utmost candour. Irrespective of whether the petitioner can avail of section 15(2) of the Limitation Act, which appears to be inapplicable to the present case, since it is evident that the relevant averment by the petitioner at paragraph 12 of the petition is contrary to the statements in the statutory notice where the petitioner had categorically stated that the last payment had been made by the company to the petitioner on June 19, 2006, C. P. No. 299 of 2009 is permanently stayed. The petitioner may avail of any other remedy that may be available to the petitioner in respect of the subject-matter of the claim herein.

Summary

Issues involved:
Claim of money lent and advanced, statutory notice contents, reliance on documents and payments made, limitation period for filing petition, applicability of section 15(2) of Limitation Act, nature of creditor's winding up petition, necessity of notice under section 434 of Companies Act, enforceable claim and bona fide dispute, clean hands doctrine, costs assessment.

Claim of money lent and advanced:
The petitioner claimed that a sum of Rs. 5 lakhs was lent to the company on June 12, 1998, repayable with interest at 15% per annum. The petitioner relied on documents like money receipt, confirmation of accounts, cheque payments, and vouchers as evidence of the transaction.

Statutory notice and payments made:
In the statutory notice of January 27, 2009, the petitioner asserted that a sum of Rs. 5 lakhs was repaid by the company but adjusted against interest. The company alleged a payment in July 2007, which was disputed due to lack of written corroboration.

Limitation period for filing petition:
The company contended that the claim was time-barred under the laws of limitation since the last admitted payment was made in June 2006, and the petition was filed on July 9, 2009. The petitioner argued for the inclusion of the time contemplated by section 434 of the Companies Act, 1956, before reckoning the limitation period.

Applicability of section 15(2) of Limitation Act:
The petitioner relied on section 15(2) of the Limitation Act, 1963, to exclude the period of notice before computing the limitation period. However, the court found that this provision may not apply to a creditor's winding up petition and was inapposite in the present context.

Nature of creditor's winding up petition and notice under section 434:
The court clarified that a creditor's winding up petition is not a debt-collecting mechanism but a means to ascertain the company's failure to pay a debt due. Issuing a notice under section 434 of the Companies Act, 1956, triggers the legal presumption of the company's inability to pay.

Enforceable claim and bona fide dispute:
The court emphasized that for a company to be deemed unable to pay its debts, there must be an enforceable claim. In this case, the alleged payment made in 2007 gave rise to a bona fide dispute, affecting the enforceability of the claim.

Clean hands doctrine and costs assessment:
The court highlighted the importance of approaching equitable jurisdiction with clean hands and utmost candor. Due to discrepancies in the petitioner's statements and lack of evidence for the 2007 payment, the petition was permanently stayed, and costs were assessed against the petitioner.

This detailed analysis of the judgment provides insights into the legal complexities surrounding the claim of money lent, statutory notices, limitation periods, and the nature of creditor's winding up petitions, ensuring a comprehensive understanding of the case.