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TMI Blog2005 (1) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay penal interest at the rate of 36 per cent per annum for delayed payments. The suppliers of the assets raised invoices directly in the name of the petitioner. The respondent paid instalments up to March 2001 and sent a letter dated 23-4-2001 requesting the petitioner for moratorium for repayment of instalments, which was also granted by the petitioner. Thereafter, the respondent failed to pay the instalments. The petitioner caused inspection of the respondent premises and found that out of 8 laptops, 4 are available in Chennai and the remaining items were stationed in other cities and the server was located at the premises of VSNL at Chennai. The petitioner sent letter dated 28-7-2001 reminding the respondent the due amount of Rs. 2,72,426 as on that date. By another letter dated 25-8-2001, the petitioner called upon the respondent to voluntarily surrender the assets taken as hire purchase. A sum of Rs. 20,000 was paid by the respondent by way of cheque dated 30-8-2001 enclosing a letter dated 27-8-2001 and informed that steps are being taken to bring the laptops to Chennai. By letter dated 29-8-2001, the respon- dent also agreed to surrender 4 laptops to the petitioner on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay High Court in Viral Filaments Ltd. v. Industrial Bank Ltd. 2001 (4) Comp. L.J. 44 (Bom.). The learned counsel for the respondent company placed reliance on a decision of the Delhi High Court in Bank of Nova Scotia v. RPG Transmission Ltd. 2003 (1) Be 270 wherein a contrary view was taken. The above judgment also does not say that once the creditor approaches the Debt Recovery Tribunal, he cannot approach the Company Court for other reliefs under the Company Law. In the above judgment it has been observed: A possible exception could be where a judicial determination has already taken place, such as where a decree has been passed by a Court of competent jurisdiction, or where, as in the Allahabad Bank s case ( supra ), a decree has already been passed by the Debt Recovery Tribunal. In such cases, the Company Judge would immediately proceed to the second limb of his duties under sections 433 and 434 of the Companies Act, that is post-admission of the petition. At this stage he would appoint a Liquidator and decide on the distribution of the proceeds of the company. It is only in the second limb of jural activity that an actual difference between recovery proceedings an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Mittal [1978] 48 Comp. Cas. 604 and the Punjab High Court in the case of Lakshmi Sugar Mills Company (P.) Ltd. v. National Industrial Corpn. Ltd. [1968] 38 Comp. Cas. 384 . Respectfully agreeing with the said decisions, I do not find any force in the said submission made by the learned counsel for the respondent." (p. 254) ( iii ) Madhusudhan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd., Mahendra B. Parikh [1972] 42 Comp. Cas. 125 (SC) wherein the Honourable Supreme Court held thus: "Two rules are well-settled. First, if the debt is bona fide disputed and the defence is a substantial one, the Court will not wind up the company. The Court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. ( See In re London Paris Banking Corpn. ). Again a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been done properly was not allowed. ( See In re Brighton Club and Norfolk Hotel Co. Ltd. ). Where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 it to the reasonable satisfaction of the creditor;" 7. Sections 433 and 434 of the Companies Act are dealing with cases in which a company may be wound up by the Court. Section 433( e ) is one of the six clauses in which the Company may be wound up by the Court i.e., if the company is unable to pay its debts. Under section 434, a creditor should make a demand requiring the company to pay the amount due to the creditor. The mode of making such payment is also mentioned in section 434. Under sub-clause ( a ) of section 434(1), if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding rupees one lakh [substituted for Rs. 500 by Companies (Second Amendment) Act, 2002] 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refuse to grant any relief to the company sought to be wound up. 11. In the above view, I now consider the facts involved in the case on hand. The respondent entered into a hire purchase agreement with the petitioner and availed Rs. 15,60,426, which is payable in 24 monthly instalments at the rate of about Rs. 65,000 per month. As per the said agreement, the respondent company has made instalments up to March 2001 and sent a letter dated 23-4-2001 requesting the petitioner for moratorium for repayment of instalments, which was also granted by the petitioner. Even after the period of moratorium, the respondent failed to pay the instalments. During the inspection of the respondent premises, it was found by the petitioner that out of eight computers, four computers were stationed in other cities and the server was located at the premises of VSNL, Chennai. The petitioner sent letter dated 28-7-2001 reminding the respondent the due amount of Rs. 2,72,426 as on that date. By another letter dated 25-8-2001, the petitioner called upon the respondent to surrender the assets taken on hire purchase. By letter dated 29-8-2001, the respondent agreed to surrender the four laptops on 10-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in O.S. No. 3006 of 2002 before the XIII Assistant City Civil Court, Chennai for a declaration to declare that the petitioner is not entitled to seize the assets is pending, the company petition is not maintainable. The prayer sought for in O.S. No. 3006 of 2002 is not to seize the immovables which are covered under the hire purchase agreement without following due process of law. The learned counsel for the petitioner submits that in the event of default by the hirer namely the respondent, the right is given under the hire purchase agreement to repossess the hired goods. This Court need not go into the validity of the said suit. However, this Court is entitled to investigate the question as to whether a dispute has been manufactured in order to delay or defeat the realization of dues of the petitioner and is merely a cloak for inability of the company to pay its just debts. Analyzing the facts mentioned above, this Court is of the considered view that the said suit, which is filed for limited relief is merely a cloak for inability of the respondent to pay its just debts and the same may be ignored since the winding up is necessary in public interest. In view of the same, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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