9911796707
TMI Blog1996 (3) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... ch took place between the petitioner and respondent No. 2, it was agreed that the petitioner would purchase two lakhs equity shares in the company at the rate of Rs. 25 per share. The amount representing the value of two lakhs shares in the sum of Rs. 50 lakhs was to be paid through a demand draft in the name of the company and the shares were to be delivered within one week thereafter. A draft dated May 16, 1991, in the sum of Rs. 50 lakhs drawn on the Jammu and Kashmir Bank, Ludhiana favouring respondent No. 1 was delivered to J.P. Jain with a list of nominees in whose favour the shares were to be issued. A photocopy of the draft is annexure P-1 with the petition. According to the petitioner after repeated requests the respondents delivered one lakh equity shares in August, 1992, of Oswal Agro Mills Limited to the petitioner, though these shares were to be issued within a week of the payment. The petitioner in that behalf suffered a huge loss on account of the non-delivery of equity shares. The company became liable to refund the money on May 23, 1991, itself and the company by not returning the money to the petitioner has become a debtor and the petitioner has become a creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressure on Diana Properties to forgo its claim. The petitioner himself negotiated with Diana Properties for the purchase of shares and has not paid the full consideration even after the lapse of three years. Again the petitioner negotiated for the purchase of one lakh equity shares of Bindal Agro Ltd. with Diana Properties. He, therefore, in the process owed a sum of Rs. 1,62,00,000 with interest. The further stand of respondent No. 1 is that no agreement took place between the petitioner and the respondent-company for the sale of shares and any petition based on a contract in violation of law is not enforceable. The petitioner by filing this petition is trying to avoid his liability qua Diana Properties. Respondent No. 1 cannot hold shares and, therefore, it could never contract with the petitioner for the sale of shares and if respondent No. 2 had undertaken to arrange for sale of shares of the company in favour of the petitioner, the claim only lies against respondent No. 2 and not respondent No. 1. Execution of the agreement for the sale of shares on behalf of respondent No. 1 has been denied. It is further the case of respondent No. 1 that in order to cultivate relations with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss dealings did not arise and that it is unimaginable that a person would advance an amount of Rs. 55 lakhs for ten years free of interest. The amount was advanced by way of draft. The allegations made by the petitioner in the petition have been reiterated and the corresponding allegations made in the written statement have been denied. It is stated that J. P. Jain was acting for and on behalf of respondent No. 1 and was not acting on his own behalf and it is he who took the draft which was delivered to the respondent-company and thus the respondent-company cannot say that the said J. P. Jain was not authorised. If respondent No. 1 was not to deliver the shares as agreed, there was no occasion for the petitioner to advance such a huge amount and that too, interest free, and for a period of ten years. It is averred that the very fact that two lakh shares, one lakh of respondent No. 1 and one lakh of Bindal Agro Limited had been given to the petitioner after the receipt of Rs. 55 lakhs, goes to show that the amount was paid by the petitioner for the sale of shares. The allegation about the liability of the petitioner towards Diana Properties has been denied. It is further stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he strength of the suit filed by Diana Properties cannot, in my opinion thwart these proceedings by submitting that there is a bona fide dispute between the parties regarding the amount in question. The admitted case of the respondents is that they have not delivered or transferred any share, either of Oswal Agro Mills Ltd., or of Bindal Agro Ltd., in favour of the petitioner or his associates. The respondents in clear terms, however, admitted that they are liable to pay to the petitioner a sum of Rs. 55 lakhs, which they received through demand drafts, after a lapse of ten years and that too without interest. Thus in the facts and circumstances of this case, it is not for this court and especially in these proceedings to go into the question whether the petitioner is liable to pay to Diana Properties a sum of Rs. 1,62,00,000 for the sale and purchase of two lakh shares of Oswal Agro Mills Limited and of Bindal Agro Limited. The simple case of the petitioner that remains is that a sum of Rs. 55 lakhs was paid to the respondents which stands admitted and the respondents have failed to deliver the shares or to return despite notice dated April 19, 1994, and that no probable defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secure, or compound for it to the reasonable satisfaction of the creditor. Section 439 provides for moving an application to the court for winding up of a company in the situation as detailed therein. Section 434 introduces a fiction when it provides an instance of "deemed inability" where the company fails to pay a debt within the requisite period of receipt by it of a notice of demand requiring the company to pay. Ordinarily mere failure to pay a debt would not be inability to pay a debt, but section 434 introduces the fiction of deemed inability to pay even when the company may be solvent and able to pay its debts. Presumption of inability to pay would arise when a notice is served upon the company making a demand of debt exceeding Rs. 500 and requiring the company to pay the same and the company has for a period of three weeks neglected to pay the same or to secure or compound for it to the satisfaction of the creditor. It is in the above background to be seen whether this petition is liable to be admitted or not. Mr. Sibal learned counsel appearing for the respondents submitted that even if the allegations as made by the petitioner in paras. 3 and 4 of the petition are admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or quota paper granted under the export control order is a personal privilege granted to a party. It is not property where the principal has allowed the agent to sell the export licence to a third party by resorting to subterfuges employed by them, thereby circumventing the provisions of the export control order, the transaction is illegal and against public policy. The parties being in pari delicto, the principal cannot recover from the agent the price realised by him from such sale. The case would thus fall within the ambit of the rule ex turpi causa itself and the court will not lend its help to a person who bases his claim upon an immoral or illegal act." Reference in this behalf was also made to Bhaskarrao Jageshwarrao Buty v. Smt. Saru Jadhaorao Tumble, AIR 1978 Bom 322. However, in my opinion it is not necessary to develop further on this point as it is not the admitted case of the parties that an agreement for the purchase and sale of shares was entered into between the parties. According to the petitioner he paid a sum of Rs. 50 lakhs for the purchase of shares whereas according to the respondents the amount of Rs. 55 lakhs was paid by the petitioner in order to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been tried to be projected by reference to the above cases, is that the amount is not yet due. Again, the contention, in my view, has no merit. Undisputedly the parties are not related to each other nor is there a business dealing between them. It is unimaginable that a person will pay a sum of Rs. 55 lakhs to a company as interest free loan for a period of ten years simply to cultivate business relationship. No document is forthcoming in support of the plea of the respondents that the amount was advanced to it as interest free loan for a period of ten years and is not repayable before the expiry of the period. Even if it be taken for the sake of argument that the amount was given as a loan to the respondent-company, in the absence of any document, it can be recalled at any time unless it is shown that it cannot be recalled before the expiry of a definite period. The petitioner served a notice dated April 19, 1994, requiring the company to pay the amount with interest and the respondent having failed to pay the amount and to reply to the notice, it has to be taken that the petitioner is a creditor and the company is liable to pay its debts, which became due immediately on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notice and did not at any point of time between May 16, 1991, and April 19, 1994, write to the petitioner or bring to his notice that the amount paid by the petitioner was taken as an interest free loan for a period of ten years in order to cultivate business relationship between the parties. Diana Properties for the first time served a notice on the petitioner in July, 1994, after the filing of the present petition, which was filed in May, 1994, and filed a suit against the petitioner thereafter. Thus, in my opinion, the respondents are trying on the one hand to take advantage of the proceedings initiated by Diana Properties against the petitioner and on the other hand, are trying to confuse the issue by saying" that the loan was an interest free loan for a period of ten years. It is not understood as to how a company would sell shares worth about a crore of rupees, as per the company, to a stranger without getting the payment and will remain silent or a period of about two/three years for that amount and only file a suit after the present petition is filed. Thus, in my opinion, the suit has been filed by Diana Properties at the instance of the respondents so as to pressurize ..... X X X X Extracts X X X X X X X X Extracts X X X X
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