9911796707
TMI Blog2001 (12) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... f said amount of Rs. 4,87,200, the company did not allot the shares in favour of the petitioners. The petitioners wrote various letters to the company and its directors and also personally visited the offices of the company at Mumbai, Delhi, and Shillong complaining of such non-allotment of shares. Shri T.S. Bareh, chairman of the company, Shri M.S. Jairam, managing director of the company and Shri Sukhram Verma, director of the company partly settled the claim of the petitioners by making payment to four petitioners an amount of Rs. 1,90,400 by bank drafts dated October 16, 1996, drawn on Bank of Baroda, Parliament Street Branch, New Delhi. The said three officers of the company assured petitioner No. 1 that they would settle the entire claim of the petitioners within a period of two months thereafter. But despite such assurance, the balance amount of Rs. 2,96,800 paid as application money for the shares was not refunded to the petitioners. By notice dated April 22, 1998, the petitioners through their advocate called upon the company to pay the said balance amount of Rs. 2,96,800 together with interest at the rate of 24 per cent per annum. In the said notice, the advocate of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi, and that the managing director of the company was not aware of the purpose for which such payments were made. The managing director of the company has further stated that no assurance was made by any authorised officer of the company to settle the amount alleged to be due to the petitioners. In reply to the notice dated August 22, 1998, of the advocate of the petitioners, a letter dated August 20, 1995, was sent by the company s lawyer to the petitioners but was returned undelivered. An affidavit in rejoinder has been filed on behalf of the petitioners on April 19, 1999, stating, inter alia, that current account No. 63 was opened in the State Bank of Indore by a resolution of the board of directors of the company on March 23, 1993, and that the application for opening up of the said current account No. 63 was signed on behalf of the company by its director and that current account No. 63 was opened in accordance with the procedure of the bank. Further copies of certificates issued by Nava Jeevan Co-operative Bank Limited on July 1, 1994, have been annexed to the said affidavit in rejoinder to show that the cheques on the said bank have been paid to the State Bank of Indor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company was liable to the State Bank of India to pay a sum of Rs. 2,51,91,796.96 and the company has furnished security in favour of the State Bank of India by creating charge over their properties and that the said charge was registered in the office of the Registrar of Companies, Shillong, and further the State Bank of India has filed O.A. No. 42 of 2000 in the Debt Recovery Tribunal at Guwahati on July 31, 2000 for recovery of the said amount of Rs. 2,51,91,796.96. On May 21, 2001, an affidavit-in-reply has been filed by the company raising a plea in para. 5 thereof that the company petition was barred by the law of limitation. On June 28, 2001, the petitioners have filed a rejoinder contending that since the company has made part payment and has assured for payment of the balance amount along with interest, the subject-matter of the petition was not barred by the law of limitation. At the hearing Mr. Sahewala, learned counsel for the petitioners, submitted that it will be clear from the letter dated October 18, 1994, of the State Bank of India to the petitioners annexed to the petition as exhibit A that cheques for Rs. 4,87,200 which were given by the petitioners hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. E-63 was unauthorisedly opened and that the amounts paid into the said account No. E-63 were not received by the company should not be accepted. He further argued that the averments in paragraphs, 11, 12 and 13 of the petition as well as paragraph 14 of the affidavit-in-opposition filed by the State Bank of India would show that the company is commercially insolvent and is unable to pay its debts including the debt of Rs. 2,51,91,796.96 to the State Bank of India. In reply, Mr. D. Baruah, learned counsel for the company, submitted relying on the affidavit-in-opposition filed on behalf of the company that out of the amount of Rs. 4,87,200 only Rs. 56,000 worth of cheques were in favour of EML-Rights Issues Account No. 62 in State Bank of Indore and accordingly shares worth Rs. 56,000 were issued in favour of the petitioners, but the balance amount of Rs. 4,31,000 was paid by cheques in favour of the current account No. 63 of the company in State Bank of Indore and this current account No. 63 was opened unauthorisedly by some sub-brokers and jobbers in connivance with the bank officials. He further submitted that the said amount of Rs. 4,31,000 paid into the current account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... desh v. Hyderabad Vegetable Products Co. Ltd. AIR 1963 AP 243, that the expression "commercial insolvent" means that the assets of the company are such and the existing liabilities are such as to make the court feel satisfied that its existing and probable assets would be insufficient to meet its existing liabilities. Mr. Baruah explained by referring to the balance-sheet of the company filed in court that the company has sufficient assets to pay off its existing liabilities. Regarding the suit filed by the State Bank of India, Mr. Baruah submitted that the loans granted by the State Bank of India are all secured by mortgage of the properties of the company, the value of which is more than the alleged dues towards the loans. According to Mr. Baruah, the company cannot be said to be commercially insolvent. Mr. L. Talukdar, appearing for the State Bank of India relying on the affidavit filed by the State Bank of India submitted that the State Bank of India is a secured creditor of the company and has filed O.A. No. 42 of 2000 in the Debt Recovery Tribunal at Guwahati for recovery of Rs. 2,51,91,796.96 on July 31, 2000. He cited a recent decision of the Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners, even if accepted by the court, would not have the effect of extending the period of limitation for filing a suit for recovery of the balance amount by the petitioners under sections 18 and 19 of the Limitation Act, 1963. Section 25(3) of the Contract Act, however, provides that an agreement made without consideration is void unless it is a promise made in writing and signed by the persons to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law of limitation. In other words, even where a debt is barred by the law of limitation, a fresh contract by the debtor containing a promise to pay the creditor can be enforced by the court if such a contract is in writing and proved to be signed by the debtor or his agent generally or specially authorised in that behalf. In the instant case, although the petitioners have pleaded in paragraph 9 of the petition that three officers of the company assured petitioner No. 1 for settling the entire claim within a period of one or two months therefrom, no such assurance or promise in writing and signed by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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