2013 (4) TMI 875 - HC - Companies Law

Summary

Issues Involved:

1. Whether the claim of the petitioner is time-barred.
2. Whether the E-mail dated 1.4.2008 constitutes an acknowledgment of liability u/s 18 of the Limitation Act, 1963.
3. Whether the promissory note is admissible in evidence.
4. Whether the winding-up petition u/s 433(e) of the Companies Act, 1956 is maintainable.

Summary:

Issue 1: Time-Barred Claim

The learned single Judge dismissed the petition on the grounds that the claim was time-barred. The Judge held that the E-mail dated 1.4.2008 was not an acknowledgment of liability as it was given after the expiration of the limitation period. However, the appellate court found that the period of limitation should start from 31.10.2005, the date agreed upon in the promissory note, rather than 28.3.2005, the date of resignation. The E-mail dated 1.4.2008 was sent within the limitation period, hence the claim is not time-barred.

Issue 2: Acknowledgment of Liability

The appellate court noted that the E-mail dated 1.4.2008 from the Managing Director of the respondent company acknowledged the debt and the issuance of the promissory note, thus constituting an acknowledgment of liability u/s 18 of the Limitation Act, 1963. This acknowledgment renewed the limitation period, making the filing of the petition on 24.11.2008 within the permissible time frame.

Issue 3: Admissibility of Promissory Note

The learned single Judge initially held that the promissory note was insufficiently stamped and thus inadmissible in evidence. However, the appellate court clarified that the requirement for the original promissory note with appropriate stamp duty arises only in a suit for recovery of money, not in a company petition for winding up. Hence, the promissory note, even if a copy, was admissible for the purpose of the winding-up petition.

Issue 4: Maintainability of Winding-Up Petition

The appellate court found that the respondent company had admitted its indebtedness and failed to pay the amount due, rendering it commercially insolvent. Therefore, the winding-up petition u/s 433(e) of the Companies Act, 1956, was maintainable. The appellate court set aside the order of the learned single Judge and remitted the matter back for disposal on merits.

Conclusion:

The appellate court allowed the original side appeal, setting aside the order of the learned single Judge and remitting the matter for disposal on merits, holding that the claim was not time-barred, the E-mail constituted an acknowledgment of liability, the promissory note was admissible, and the winding-up petition was maintainable.