2018 (3) TMI 1437 - HC - Companies Law

Application for winding up - cheques dishonored - liability to pay the amount - Held that - The financial accommodation/loan of ₹ 60 lakhs from the petitioner and as recorded in the letters dated July 17, 2013 and September 7, 2014 the respondent company was liable to repay the said amount to the petitioner together with the agreed rate of interest. In order to discharge its obligation, the company had issued two post dated cheques of ₹ 60 lakhs and ₹ 10,54,110/-, respectively both dated September 1, 2015 to the petitioner and when the petitioner presented the said cheques for encashment through its bank, the same were dishonoured on the ground of insufficient funds. Until receipt of the notice under Section 138 of the Negotiable Instruments Act, 1881 from the petitioner, the company did not inform the petitioner not to deposit any of the said two post dated cheques. Even in the affidavit in opposition, the respondent company has not disclosed any document whatsoever to suggest any oral agreement between the parties for adjustment of all the amount receivable by the petitioner against acquisition of any property at Kona, in the district of Howrah. For all these reasons, as find that the defence sought to be made out by the company in this application against the claim of the petitioner, lacks bona fide and the same has no merit. The application for winding up of the company is admitted for a sum of ₹ 73,95,617/- as mentioned in the notice dated December 1, 2015, under Section 434 of the Act of 1956, issued by the petitioner. The company is directed to pay the said sum of ₹ 73,95,617/- to the petitioner within a period of three weeks from date.

Summary

Issues:
1. Application under Section 433(e) of the Companies Act, 1956.
2. Financial accommodation of ?60 lakhs obtained by the company.
3. Dishonored post-dated cheques and subsequent legal actions.
4. Allegations of an oral agreement for adjustment of loan amount.
5. Defense raised by the respondent company.
6. Decision on winding up application.

Analysis:
1. The petitioner, a non-banking financial institution, provided a financial accommodation of ?60 lakhs to the company for a specified period at an agreed interest rate. The company issued post-dated cheques to repay the amount but failed to honor them due to insufficient funds, leading to a legal dispute under Section 433(e) of the Companies Act, 1956.

2. The company, in response, alleged an oral agreement with the petitioner for investing the loan amount in a real estate project for adjusting the dues. However, the petitioner contended that this defense lacked bona fide and was a mere attempt to avoid repayment, highlighting the company's financial incapability to settle the outstanding amount.

3. Upon examination of the evidence, the court found no merit in the company's defense. The company acknowledged the loan receipt and dishonored cheques, failing to provide substantial proof of the alleged oral agreement for adjusting the dues against property acquisition. Consequently, the court admitted the winding-up application for the outstanding amount of ?73,95,617 as per the notice issued by the petitioner.

4. The court directed the company to pay the outstanding sum within three weeks, failing which the petitioner could proceed with public notifications in designated newspapers. The order specified the consequences of default and the subsequent legal actions that would be taken if the payment was not made within the stipulated timeframe.

5. The judgment emphasized the lack of evidence supporting the company's defense and upheld the petitioner's claim based on the documented loan agreement and dishonored cheques. The decision to admit the winding-up application was grounded in the company's failure to demonstrate a valid defense or financial capability to settle the outstanding dues.

6. Overall, the court's decision to admit the winding-up application was based on the clear evidence of the loan agreement, dishonored cheques, and the lack of substantiated defense by the company. The judgment highlighted the importance of honoring financial obligations and the legal consequences of defaulting on repayments in commercial transactions.