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TMI Blog2003 (3) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. TISCO had given working capital to the JTL to the extent of Rs. 9 crores and the assistance so given was to be repaid by the JTL in the form of production commission and selling commission besides payment from export orders. As per section 125 of the Companies Act a charge of Rs. 9 crores was also registered with the Registrar of Companies (ROC), Delhi and Haryana in respect of raw material, unfinished and finished goods and store spares in the JTL units at Faridabad and Kundli in Haryana and Aurangabad and Jalna (Maharashtra). On 3-7-1995, TISCO requested the JTL to confirm its outstanding balance of Rs. 7,10,15,163.53 as per the detailed statement of accounts. By letter dated 6-7-1995, JTL confirmed a sum of Rs. 7,10,01,226.00 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The reply affidavit filed in this Court by the JTL while generally denying the claims of the TISCO contended that the debt was disputed and inter alia pleads as under : ( a )that it was the TISCO s conduct which was responsible for creating difficulties and financial constraints for JTL; ( b )that the unilateral step of TISCO in terminating the contract has caused the present situation; ( c )that the advance given by the TISCO was to be adjusted at the rate of 8 per cent on the payment of each invoice for supplies of hand tools to be made by TISCO to the JTL; ( d )that though the agreement provided for payment at the rate of 8 per cent for value of each export transaction, recovery was made at as high a rate as 26.36 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JTL; (2) Letter dated 7-1-1998 to the same effect; and (3)Letter dated 23-2-1998 where an offer of settlement by way of payment of Rs. 5 crores against the TISCO s claims of approximately Rs. 8.5 crores was written by the Director of the JTL. 7. The respondent s plea is that in the 4 agreements, Ex. A, B, C and D (annexed with the petition), the working capital assistance was to be provided to the extent of Rs. 9 crores on the account of the certain obligations by which TISCO was also bound and the method and manner of repayment was by 8 per cent adjustment on payment of each invoice for the supply of hand tools. It was inter alia provided that from 1-4-1990 till the pendency of the agreement, the JTL guaranteed a minimum compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, what is required to be considered is the provisions of section 434(1)( a ) of the Act under which the statutory notice was sent. The said section relating to presumption of inability to pay the debt reads as follows : " Company when deemed unable to pay its debts. (1) A company shall be deemed to be unable to pay its debts ( a )if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be completed by the end of this month. We hope that the arrangements with them, which are progressing vary well, will be made by April/May this year. The arrangements also envisage settlement of all dues of TISCO. We are informed by Mr. Sharad Gupta on telephone and Mr. Vinod Kumar who visited us today that you are contemplating a legal action for recovery of dues from us which reflects a very natural concern on your part due to delays in repayments by us. However, in view of the circumstances explained above, we request you to defer taking any legal action in the matter." 12. These letters do not reflect any dispute of the debt, raised by the respondent company nor the violation of the terms of the agreement by the petitioner c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sought to be contended in the reply. 14. The respondent has not produced any contemporaneous correspon-dence to corroborate that TISCO had : ( i )violated the agreement between the parties; ( ii )levied interest at 26.36 per cent instead of 8 per cent; ( iii )unilaterally terminated the contract; ( iv )was liable to pay Rs. 50.83 lakhs to the JTL. It has also not been explained satisfactorily why Rs. 1 crore was offered to be paid by 31-12-1997 as contended in Para 15 of the reply. If there were numerous violations of the agreement by the TISCO, such a promise to pay Rs. 1 crore as a gesture of gratitude by a company experiencing difficulties due to the averred conduct of the TISCO is wholly incongruous and incompatible wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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