9911796707
TMI Blog1989 (9) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... the company petition are that he had advanced four sums of loan to the appellant, namely, Rs 30,000 on January 24, 1980, Rs 15,000 on May 23, 1980, Rs 27,500 on January 24, 1980, and Rs 35,000 on August 7, 1980. The appellant repaid certain amounts against principal and interest, but the appellant-company was not paying the balance amount and that it has come to the knowledge of the respondent that the appellant-company is in heavy debts and is unable to repay the amount of loan. The respondent served a demand notice under section 434 of the Act on the appellant-company which was replied to by the appellant. The appellant denied having received the alleged sum of Rs 35,000 of loan about which only there is a dispute between the parties. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant company preferred this appeal. The respondent has opposed the appeal. We have heard arguments of learned counsel for the parties and were taken through the record of the case. The case of the respondent is that the sum of Rs. 35,000 was advanced by him to the appellant company as a loan. He served a notice in writing at the registered office of the appellant company demanding the refund of that amount together with interest thereon, but that the appellant failed to pay the same or to secure or compound for that to his reasonable satisfaction for more than three weeks after the service of the demand notice on the appellant and that, as such, the appellant company was unable to pay its debt within the meaning of section 433( e ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it was not at all shown by the respondent that the appellant-company was unable to pay any debt owing from it as contemplated by section 433( e ) of the Act. It is settled law and was not disputed by Mr. Rawal, learned counsel for the respondent, that the machinery of winding up is not to be allowed to be utilised simply as a means for realising debts due from a company. A winding up petition is not the legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. If a debt is not disputed on some substantial grounds, the court may decide it on the petition and make an order of winding up of the company. However, if the debt is bona fide disputed, there cannot be 'neglect to pay' within the meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellant-company has neglected to repay the sum of Rs. 35,000 together with interest thereon allegedly advanced as a loan to the appellant. The respondent had admittedly advanced the other three sums of loan during the period from January 24, 1980, to May 24, 1980, by cheques The sum of Rs. 35,000 in question was, admittedly, not paid by any cheque The respondent has taken contradictory stands as regards the mode of payment of the sum of Rs. 35,000. In para 4 of the petition, it was stated that this amount was paid in cash on August 7, 1980. In the very next para 5, this amount was shown as having been paid by pay order dated August 7, 1980. Two photo-copies of the certificate dated February 27, 1984, issued by Shri Vijay Kumar Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by the appellant that although the appellant never received the alleged sum of Rs. 35,000 from the respondent, however, Shri Bhandari had stated that Shri Vimal Chand Jain had told Shri Vijay Kumar Gupta, the present managing director of the appellant-company, that Shri Vimal Chand Jain required a certificate urgently about his having advanced a loan of Rs. 35,000 to the appellant-company and that, at his instance, he (Shri Vijay Kumar Gupta) issued the aforesaid certificate and as there were no particulars regarding the alleged payment of Rs. 35,000 he had left the space blank which was later on filled in by someone on behalf of the respondent as "Pay order dated August 7, 1980". It has also been pointed out on behalf of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had any bearing in the matter of production of the books of account by the respondent. Then again, we fail to see how by the existence of an entry in the books of account of the respondent showing a debit of Rs 35,000 to the account of the appellant-company there was clinching evidence on which alone the court could be satisfied that the sum of Rs. 35,000 was, in fact, paid by the respondent to the appellant-company. In fact, this was no stage for forming a final opinion so as to record satisfaction about the payment of the amount in question. All that the court was required to see at that stage was the prima facie state of things. The learned company judge thus misdirected himself and the impugned order is not sustainable. We, accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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