9911796707
TMI Blog1989 (12) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... rt may, however also, direct furnishing of some securities. Incidentally, it is to be noted, however, that where a debt is disputed, it is the duty of the court to go into the question of the genuineness or otherwise of the dispute and, in the event, the court is primarily satisfied as regards its genuineness and bona fides , such a liberty ought always to be given to the petitioning creditor and the court ought not itself to embark upon a detailed adjudication of the disputes between the parties. Conversely, however, in the event the dispute raised by the company does not seem to be genuine, it is a plain exercise of the judicial power to direct winding up of the company. The expression bona fide in common English parlance means genuine: good faith (vide Chambers Twentieth Century Dictionary). In Om Prakash Mohta v. Steel Equipment and Construction Co. P. Ltd. [1967] 1 Comp LJ 172; [1968] 38 Comp. Cas. 82 (Cal), bona fide dispute has been ascribed to mean a dispute based on a substantial ground. The English courts, however, attributed honesty as an equipment of bona fide ( R v. Holl [1881] 7 QBD 575 (CA)) dispute on substantial ground. Considering, however, of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me should be allowed to a litigant who has not taken advantage of the discretion exercised twice in its favour by filing the necessary affidavit. To my mind, it is apparent that all attempts were made by the company to delay and harass the petitioning creditor and it had no defence to the petitioner's claim and thus no affidavit-in-opposition was filed and since April 21, 1987, till today the matter has been kept pending and almost two months have passed and no steps whatsoever were taken for filing any affidavit. It is only during the course of hearing when the company felt that the preliminary plea taken was not going to be acceptable to the court, then a third extension of time for filing of an affidvait was sought and as such, the court is disinclined to give any further indulgence to such a litigant." The order of Mrs. Bose J., however, was challenged before the court of appeal and the appellate court disposed of the appeal in the application by directing deposit of all the instalments in terms of the order dated June 19, 1987, though, however, time to pay as regards the first instalment was extended till July 22, 1987. Such a deposit was directed to be made to the advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing effect: "The court has viewed the order dated September 29, 1987, and particularly noted the conduct of the party, namely, the company. Time and again, the court had given indulgence to the company to enable it to pay the dues of the petitioning creditor and taking advantage of the extensions given, it appears that the vacation Bench was moved for extending the time to make payment in terms of the order passed by the court on September 17, 1987. Be that as it may, it appears by the order dated September 28, 1987, the vacation Bench has extended the time to make payment for instalment due on October 3, 1987, till November 2, 1987. This order, however, does not interfere with the order passed by this court, since it is clear that the extension would not interfere with the payment for the other dates of instalments, and it appears that there has been default in payment of instalment for the month of October, 1987. As such, no further mercy or indulgence should be shown to the company which appears to be taking advantage of the extensions given not with a view to pay the petitioning creditor's dues, but merely to take time and to avoid payment of its debts. Advertisements will t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated June 19, 1987, also speaks for itself and the conduct of the company would be apparent therefrom. It is significant that, when the winding up petition was admitted, several extensions were granted for filing the affidavit-in-opposition, but no affidvait-in-opposition, was filed and after the advertisements have been published, the self-same ground has been taken by the company to file its affidavit-in-opposition The court sees no reason to grant any further indulgence to the company and, as such the prayer for extension of time to file the affidavit-in-opposition is rejected. Accordingly, the court has no opinion but to pass the order in terms of prayer ( a ) of the petition. All parties and the official liquidator are to act on the signed copy of this dictated order..." The matter again, however, travelled to the court of appeal and the appellate court in its order dated January 21, 1988, recorded the inadvertence of the lawyer appearing for the company as regards the filing of affidavit. By reason of failure to draw the attention of the learned company judge in regard to the affidavit which was filed before the company judge at that stage after admission of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany. On the factual score, it appears that, on February 6, 1981, the petitioner at the request of the company lent and advanced a sum of Rs. 2,90,000 repayable on demand with interest thereon at the agreed rate of 18% per annum. Subsequently, however, the company on its part between April 20, 1981, and December 22, 1981, paid a sum of Rs. 2,00,000 by four cheques drawn in favour of the petitioner herein. On September 16, however, a further sum of Rs. 10 lakhs was lent and advanced by the petitioner to the company with interest thereon at the agreed rate of 16% per annum. The payments were however, made by ten cheques drawn on the Punjab and Sind Bank for Rs. 1 lakh each in favour of the company and all dated September 16, 1985. The company, however, also executed a promissory note for Rs. 10 lakhs in favour of the petitioner dated September 16, 1985, repayable on demand. On December 9, 1985, a further sum of Rs. 4 lakhs was also lent and advanced with interest thereon at the agreed rate of 16% per annum and the company also executed a promissory note for Rs. 4 lakhs as a collateral security in favour of the petitioner. From time to time, interest bills were raised as and by way, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company and simultaneously, on September 16, 1985, itself at the request of the petitioner, ten bearer cheques of Rs. 1 lakh each were issued and made over by the company to the petitioner. The third case made out by the company is that the petitioner and the company and its other associates maintained a very cordial relationship till they fell out in 1986 and the petitioner in 1985, represented to the company that he was in dire need of cash and that he would deem it a great favour if the company could see its way to provide temporary accommodation to him so that a sum of Rs. 14 lakhs could become available to him in cash. During the course of hearing, strong criticism was levelled on behalf of the company as regards the case made out by the petitioner to the effect that, in the normal course of events, no one would issue ten cheques. While it is true that there might be some justification of such comments in regard to the aforesaid, the fact remains that the issuance of the cheques was not disputed on the contrary, it has been stated that the money was repaid by ten self-bearer cheques of Rs. 1 lakh each by the company to the petitioner. The company came out with a definite ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In my view, the answer is in the negative. If one has to give credence to the defence raised by the company, the following questions immediately come up for consideration: ( a ) Why would a person issue ten cheques which were duly encashed by the payee but obtain payment immediately thereafter? ( b ) A person having a sum of Rs. 4,213.11 in a particular bank account would issue ten cheques for Rs. 1 lakh each. ( c ) A die-hard businessman would leave the promissory note for Rs. 14 lakhs with another even after payment assuming payment has been made. These questions, on this state of facts, remain unanswered. In my view, promissory notes worth Rs. 14 lakhs would be left outstanding on the representation that the same would not be dealt with is rather difficult to accept. Similar is the position in regard to the case made out by the company for issuance of ten cheques on the same day and four cheques on another occasion immediately after the issuance of the cheques by the petitioning creditor. It is at this juncture, also that the earlier stages of the proceedings to be noted, namely, payment of instalment at least some by the company in terms of the order of this court. Reading the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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