9911796707
TMI Blog1985 (11) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s winding-up petition which was the unfortunate culmination of a greatly strained Banker Constitutent relationship was pending for over 5 years. 2. We have heard Sri Shekhar Shetty, learned Counsel for the appellant. The petitioning creditor having filed a Caveat, Sri S. G. Sundaraswamy and Sri S. Ramaswamy Iyengar, appeared for the Bank. We have been taken through the order under appeal and the evidence on record. We are satisfied that the findings of the learned Company Judge that the petitioning-creditor has established the existence of a substantial part of the debt claimed by it and that the defence of the Company is not substantial nor in good faith do not call for interference. They are supportable even on the undisputed documentary evidence, leaving out altogether the other evidence which might admit of some debase on certain legal technicalities. We will state the reasons that weigh with us for our inability to accept the several contentions which Sri Shekhar Shetty ably... and at greath length.presented at the hearing on admission. 3. We may, however, briefly set-out the circumstances leading-up to the winding-up petition: The Company was incorporated in the year 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med that as on 31-3-1980 the 'Company' was due to the Bank under seven Cash Credit accounts and the amounts claimed are : Sl. No . Head of A/c Limit sanctioned Amount due 1. Cash CreditA/c. No. 25,00,000 24,50,000-00 2 . Cash CreditA/c. No . 20,00,000 20,00,000-00 3. Cash CreditA/c. No. 18,00,000 14,01,954-89 4. 5,00,000 5,00,000-00 5. Cash CreditA/c. No. 25,00,000 25,00,000-00 6. Cash CreditA/c. No, 77,00,000 1,68,62,365-84 7. Cash CreditA/c. No. 40,00,000 36,47,715-36 Total 2,10,00,000-00 2,93,62,036-09 According to the Bank the limits sanctioned were secured by pronotes executed by the Company in favour of its two directors Sri B.T. Shankar Hegde and his wife Smt. Shaila S. Hegde which they, in turn, endorsed them in favour of the Bank. The Company's stocks, Book-debts, and some of its machinery had been pledged to the Bark by separate 'Letters of Hypothecation'. The loans were guaranteed by the two directors. 5. The Bank says that under the terms of the loan there were express conditions imposed on the Company that it should, at regular, specified intervals, submit to the Bank returns showing production, sales and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that the Bank, as secured-creditor, could not maintain a winding-up petition without either giving up the security or valuing it as required by Section 9(2) of the Provincial Insolvency Act, 1920, and that the Bank having filed, subsequent to the institution of the winding-up petition, suits respecting part of the claims, the winding-up petition could not be permitted to be pursued. There were certain other defences. 7. Learned Company Judge framed 18 issues reflecting the points that arose for determination on the rival contentions. On the side of the Bank, H.S. Bhat (P.W.1) an Officer in the Commercial and Institutional Section of the Bank and Sadashivan (P.W.2) who was Manager of the Rajajinagar Branch where the Company's Account was first opened and operated were examined. A number of documents were produced in evidence. The documents consisted, apart from the correspondence, of the demand promissory notes which were Exhibits P-l, P-9, P-27 P-17, P-64, P-71, P-77, P-85 and P-88 ; Deeds of Hypothecation in Exhibits P-3, P-4..P-11, P-12, P-19. P-25, P-29, P-30, P-35, P-104 and P-105 ; Statement of Confirmation of Balances dated 27-5-1977 in Exhibits P-8, P-16, P-6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest was admittedly due from HGL to the Bank. Therefore it cannot be said that there is a bona fide dispute. " 14) It should be noted that even the dispute regarding interest cropped up only after 1977 as is evident from the balance sheets of HGL. Without adding interest a sum of ₹ 2,54,50,857/- was due from HGL at on 30-6-1979 and a sum of ₹ 2.62,94,862/- was due from HGL as on 30-6-1980. Therefore, even assuming that there was a dispute regarding the rate of interest after 30-6-1977 that dispute by itself will not afford a defence to HGL for repudiating the entire debt due to the Bank. " Learned Company Judge examined the question of solvency of the Company in much detail and held that the Company was irredeemably in debt and that it was just and equitable that a winding up order be made. In regard to the value and worth of the guarantees furnished by Sri B.T. Shankar Hegde and Smt. Hegde, learned Company Judge noticed that out of ₹ 36.24 lakhs stated to be the wealth of Sri B.T. Shankar Hegde, R. 9.57 lakhs were the amounts due to him from the Company itself. So far as Smt. Hegde was concerned, it was noticed that out of her wealth, a sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -09 or a substantial part of it (c) Is the debt bonafide disputed by the Company. (d) Is the Company unable to pay its debt. Is the Company liable to be wound-up as an insolvent Company. Is the discretion to wind-up properly exercised. (e) Are the debts claimed by the Bank statute-barred. (f) Are the balance-sheets and Revival letters void on the ground that the authenticating Directors were themselves interested as creditors (g) Is the winding-up not permissible in view of the subsequent suits filed by the Bank. (h) Is the Bank held to have relinquished its claims under Order II Rule 2 CrP.C. (i) Has the Bank, in relation to the loan-documents, committed acts of forgery and is disentitled to a winding-up order. (j) Should the winding-up order be refused, as all the assets are secured to the Bank and there is nothing to be administered in the winding-up. (k) Is the winding-up on the ground "Just and Equitable" justified. 12. Re: Point (a) : The contention is that the Bank which is a secured creditor cannot maintain a winding-up petition without making an election either to give-up the security or value it as required by Section 9(2) of the Provinci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in the Companies Act itself already providing for the matter in question, or in conflict with the rule which it is proposed to import". These observations, in our opinion, do not advance the contention of Sri Shetty any further. Section 529(1) of the 'Act' attracts the rules of insolvency to winding-up in relation to "the respective rights of secured and unsecured creditors" and confines these Rules so attracted to matters that arise between these two classes of creditors. Sections 528 and 529 of the 'Act' are in the chapter "Proof and Ranking of Claims" and deal with the question of proof of debts and the rights of secured and unsecured creditors. Section 529(2) itself, in so far it expressly envisages, and provides for, the contingency that if a secured-creditor proceeds to realise his security he should pay the expenses incurred by the Liquidator, by implication, rules out the construction contended for by Sri Shetty. The words "in winding-up of insolvent company" in Section 529(1) of the 'Act' has obvious reference to a post winding-up stage. The point to note is that this rule of insolvency is attracted to winding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had no application to winding-up and that there was also no mode of applying it to winding up. Learned Master of the Rolls observed ; "That is quite true in bankruptcy to obtain adjudication, but there is no such Rules in winding-up No such rule apply at all ; but the winding up is equally good whether it is obtained by a secured creditor or an unsecured creditor. " 15. Appellant's objection to the maintainability on this ground is not, therefore, one of substance at all. There is no merit in point-(a). 16. Re : POINT (b) : Has the Bank proved its debt. Issues 1 to 7 framed by the Learned Company Judge relate to this question. Sri Shetty says that the Company had disputed the existence and the extent of the liability and it was up to the Bank to establish, by satisfactory evidence, the existence and extent of the debt. Sri Shetty contends that the Bank had virtually based its claim on the promissory-notes. The Chairman and Managing Director of the Company (R.W.6) had averred that his and his wife's signatures were obtained to these and other documents, which were then in blank forms and the contents were later filled up, by the Bank. Learned Counsel says th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bother to know the contents. But all the same they signed them. Therefore, they are bound by the said documents and they cannot deny the existence of the loan transactions merely on the ground that those documents did not come into existence in the proper manner on the dates mentioned therein." Sri Shekar Shetty says that both these reasons are clearly erroneous and untenable. Counsel says that consistent with the finding that the documents on which the Bank relied were ail filled-up later, there was no question of recording a finding as to the existence of the debt on the mere ground that the documents were not objected to at the time of marking. On this aspect, the point made by Sri Shekar Shetty cannot be lightly brushed aside. It is one thing to say that these infirmities in the documents do not by themselves prove the charge of forgery, but an altogether different thing to say that the omission to object would substitute for proof of due execution. The marking of documents in evidence is distinct from admissibility and probative value. Sri Shekar Shetty may, perhaps, be right in his submission that the documents, if so vitiated, cannot shed their infirmities by reason a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the documents they were signing and that, therefore, the documents could be relied upon by the Court to sustain the Bank's claim. Sri Shetty says that the learned Company Judge was in error in taking this view. There is, perhaps, some force in this too. So far as the documents are concerned, the defence of the Company is one of denial of due execution, though the signatures on all the documents were admitted. In those circumstances, the defence of non-est-factum may not be available to the Company, but, yet, the question of proof of due execution of the documents remains. If execution is denied, the party relying on the document must prove due execution, unless the circumstances themselves raise a presumption of due execution. "Execution" means completing a document by signing a document with knowledge of its content and effect. For a document to be so 'completed' it must, first, be in existence. Where signature is admitted a presumption of due execution might arise under certain circumstances. But such a presumption will not survive the factual finding that what was signed was a blank-form. 18. But it must be mentioned that the two observations of the Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d instalments - the same to be repaid in 6 annual instalments of ₹ 10 lakhs each and one final instalment falling due at the end of 24 months from the date of term loan agreement and that interest for the first two years to be paid in equal instalments along with interest for the 3rd and 4th year." It was also proposed that "the total working capital accommodation of ₹ 222 lakhs will bear interest at 12 1/2% per annum for the first two years and thereafter at normal rates." There were other areas of controversy referred to in the proposal. The points of controversy are clearly limited and identifiable in the proposals. The Company did not deny the borrowings or that substantial sums were due. Therefore, the nature, quality and scope of the defence pertain to specific and identifiable areas : that the loans should have been term-loans ; that interest charged is high ; that out of fresh sanctions substantial sums were unilaterally appropriated towards interest and principal due under other accounts ; that interest and other charges respecting the accounts of the ancillary Companies were debited to the Company on the ground that the Company was their guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledgments. They are categoric and unconditional. 23. Sri Shetty says that once the due execution of the primary documents viz., the pronotes is not proved, the "Balance-sheets" and "Revival letters" would not take the Bank any further. He says that the cause of action is the execution of the pronotes which, according to him, are in the nature of suit documents and if they are excluded, no action could be sustained on mere acknowledgments. He says acknowledgments merely furnish a fresh starting point for limitation and do not furnish a fresh cause of action. Sri Sundaraswami relying upon the decision in Hiralal -v.- Badkulal, urged that an acknowledgment also furnishes a fresh cause of action. A mere unilateral acknowledgment does not supply a fresh cause of action. Acknowledgment in a bilateral transaction can some times mean more than a mere acknowledgment and, under certain circumstances, yield a fresh cause of action also. But generally, unilateral acknowledgment is incapable of furnishing a fresh cause of action (See ; Jeevraj -v.- Lalchand, ). The case in Hiralal's case8 is a case of bilateral transaction and the latter is a case of unilateral transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id : " Their Lordships do not accept the view that a claim against such a company (not made by a proceeding instituted by the presentation of a plaint) is by virtue of the explanation to be considered to be a "suit instituted" within the section" To show the debt, the creditor, in a winding-up petition, may well rely upon the admissions implicit in an acknowledgment of the debt. Such an admission is implicit in every acknowledgment. In Maniram Seth v. Seth Rupchand, ILR 33 Calcutta 1047 the Judicial Committee observed : " An unconditional acknowledgment has always been held to imply a promise to pay, because that is the natural inference, if nothing is said to the contrary. It is what every good honest man would mean to do. " 26. But even if a higher standard of proof of the existence and extent of the debt is necessary, we think even that is supplied by the Revival letters, Exts.P.6, P.7, P.14, P.15, P.21 P.69, P.70, P.75, P.76, P.81, P.82, P.83 and P.84, which, having regard to their terms, are not merely acknowledgments but constitute a fresh promise to pay within the meaning of Section 25(3) of the Contract Act. All these "Revival lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons. They are persons well versed and experienced in business and corporate management. In such cases, if signatures are admitted a presumption of due execution arises. But Sri Shetty says, that the Bank had admitted that the Revival letters of 5-12-1978 had not been signed and returned to them. This admission is sought to be read in the following portions of the Bank's letter, Ext.P.97, dated 31-3-1979 : "8. Again your company have not also forwarded to us so far, despite reminders, copies of the resolution passed by your Board relating to extended drawings in your Cash Credit accounts and execution of revival letters on 5-12-1978. We should request you to kindly do the needful in this regard early." This is sought to be read as the Bank saying that the Revival letters of 5-12-1978 had not been returned at all. What the Bank was complaining about was that inspite of the execution of the Revival letters on 5-12-1978, the corresponding resolutions of the Board had not been forwarded to it by the Company. If the Company had not sent the Revival letters, advertance to the date of their execution as 5-12-1978 in Ext. P.97 would be unmeaning. 28. In Re: Tweeds Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egde and Golay in favour of State Bank of India. Similarly, in any of the Balance Sheets prepared by my firm it has not been shown that the excessive sums were charged as advances from the State Bank..According to me, the amounts shown as due to State Bank in the Balance sheets namely. Exs. P. 123 and P. 127 to P 131 are correct" Sri B.T. Shankar Hegde (R.W. 6) says ; "My company has maintained regular books of accounts regarding its business. Our books of accounts reflect faithfully and correctly the receipts and expenses pertaining to our business. It also shows the amounts What the SBI says that it had lent, but it is not correct. The moneys appearing to have been paid by SBI also find a place in our books. The debit balance of the company accord with the debit balance against us in the books of the bank up to 1976. Subsequent to 1976 the debits in our books accord with the debit Balances against us in the bank, but there have been differences regarding interest payable." As to the reasons for non -payment, R.W. 6 alleges : " I have not paid that amount found to be due in Ext. P. 127 since my stand is that I have been cheated by the SBI and on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver-drawn. In some cases sums were appropriated by the Bank towards the liability of the Ancillary Companies whose loans the Company had guaranteed. It may be that for these transfers and appropriations there were no express consent or authority from the Company. As to the permissibility of such appropriations as a matter of regular banking practice R.W. 3 (Company's Chartered Accountant) says : ".When further limits were sanctioned the excess debits were regularised by book adjustment. This is a very normal banking practice. The company had not taken any objection to such regularisation." The second point is that the loans were mot payable on demand. We have held in para 24 supra that sums due under a cash-credit are repayable when the account is called up. The third contention on the point is that there were substantial counter-claims by the Company against the Bank for damages. These claims had not crystallised into decrees. The counter-claim actually urged in the suit was about 15 lakhs. A claim for damages for breach of contract is not a claim for a sum presently due and cannot be set against the dues to the Bank (see Union of India -v.- Raman Iron Foundry). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present a winding-up petition. Sub-section (2) of Section 439 says that a 'secured-creditor' is deemed to be a 'creditor' within the meaning of Section 439(1)(b). Having regard to the scheme of Part-VII it does not appear logical that the expression "creditor" in Section 434(1)(a) should be given a meaning different from what it connotes in Section 439. In the case of the secured-creditor, therefore, the only way compliance could be shown to the statutory-demand is otherwise than by offering security. Indeed, winding-up petition is one of the means of recovery of a just debt. It is a mode of equitable execution. Therefore, the Company must, in view of non-compliance with Ex.P.47 be deemed to be unable to pay its debts within the meaning of Section 433(e) of the Act. 35. Even assuming that a 'secured-creditor' does not have the benefit of, and is out-side, Section 434(1)(a), the inability of the Company to pay its debts could be established independently of the deeming provision. The creditor can establish such inability to pay debts on the part of the Company by evidence aliunde. The Bank, in our opinion, has so established. 36. R.W.3, the Char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to say, if the existing and probable assets will be insufficient to meet the liabilities, taking into account not only liabilities presently due but also those which are contingent and prospective." 37. Learned Company Judge has gone into this question elaborately and has, in substance, held that both the kinds of insolvency are established in this case. We are in respectful agreement fully with the learned Company Judge that the first kind of insolvency is established viz., the Company is unable to meet its current liabilities and current demands upon it including the debts; owing to the Bank. This is sufficient for the purposes of this case. However, as regards the second kind of insolvency which takes into account larger issues of the financial stability of the Company the matter may, perhaps, bear further examination. We do not want to be understood to say that the finding of the learned Company Judge on this aspect is unsupportable. After a full consideration, the Bank may be entitled to have that finding also affirmed. But it is not necessary to go into these questions because, for the purposes of Section 433(e) of the 'Act' it is not accessary to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is insolvent in this larger sense, which in turn depends on the correctness of the Valuation Reports Exhibits R- 4 and R-ll. It is unnecessary to be gone into it as, even assuming that the Company was not insolvent in the larger sense, the finding that it was unable to repay its current liabilities and demands on which we entirely agree with the Learned Company Judge - would itself be sufficient to support the conclusion that the Company is unable to pay its debts. We, therefore, find no substance in the challenge to this finding. The third point urged is that even if the existence of the debt and inability on the part of the Company are both established, a winding-up order is not made as a matter of course, unless the Court is satisfied that, having regard to all the circumstances, it is a proper exercise of discretion to make an order of winding-up. Sri Shetty says that an order of winding-up is an order of last resort and should not be made except with great circumspection and upon compelling considerations. That a winding-up is a serious matter can not be gainsaid. The proposition may really mean nothing more than that, in view of its inexorable finality, the Court would req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than that in accordance with settled practice the Court can only exercise its descretion in one way namely by granting the order These statements can be reconciled on the basis that although the matter is "a complete and unfettered judicial discretion" the discretion is exercised in in accordance with certain established principles, but the principles do not bind the Court in an all or nothing way. In accordance with these principles the creditor has a prima facie right to a winding-up order which is subject to certain exceptions." In accordance with these principles the creditor has a, prima facie, right to a winding-up order subject of course to certain well-recognised exceptions. Referring to the limited scope of the discretion to refuse winding-up and exceptional considerations under which an order could be denied, Palmer says : (1) Where the petitioner's debt is less than £ 200 ; (2) the debt is bona fide disputed by the company ; (3) the company has paid or tendered payment of the petitioner's debt : (4) the winding up is opposed by other creditors ; and (5) the company is in the process of being wound up voluntarily." Having r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings matters are decided on the basis of sights and obligations of the parties as on the date of the commencement of the list ; though, however, it is open to the Court to, take note of subsequent events both of fact and law to mould relief. Supreme Court in Rajahmundry Electric Supply Corporation Ltd. -v.- A. Nageshwara Rao & Ors., held: "The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when present cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation." Again in Seth Mohan Lal and Anr. -v.- Grain Chambers Ltd. Muzaffarnagar & ors., , the Supreme Court observed : "Primarily, the circumstances existing as at the date of the petition must be taken into consideration for determining whether a case is made out for holding that it is just and equitable that the Company should be wound-up." Again in Rameshwar and ors. -v.- Jot Ram and ors., the Supreme Court observed : "It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company respecting the same debts and the directors held a fiduciary capacity in relation to the Company and that in acknowledging and reviving the debts they were virtually acknowledging and reviving the debts of the Company in their own favour. Sri Shetty contends that in such a case, the acknowledgments and revivals are void, because of the conflict between duty and interest. He contends that even if the acknowledgments and revivals are other-wise valid, the circumstances that in respect of the same transaction the directors who authenticated the Balance-sheets and signed the Revival Letter are themselves in the position of creditors of the Company would vitiate the transactions. In support of the proposition that the Directors were themselves in the position of creditors of the Company, learned Counsel recalled that the Company had executed the promissory-notes in favour of the two directors who had, in turn, endorsed them in favour of the Bank. This, according to Shri Shetty, put the Directors in the position of creditors in relation to the Company in respect of the transaction. Sri Shetty relied upon two decisions: A.C.K. Krishnaswami -v.- Stressed Concrete Constructions P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to a part of the whole-claim, bad split-up the cause of action and in respect of the rest of the claim, not included in the first-suit, there was a relinquishment under Order II Rule 2 of the Code of Civil Procedure. In view of the relinquishment, says Counsel, the debts to the extent not included in the first-suit were not recoverable and no winding-up order could be based on such debt. Learned Company Judge has rejected this defence. We respectfully agree with the view taken. 49. It is no doubt true that the Bank had, subsequent to filing of winding-up petition, instituted three suits. Sri Shekhar Shetty stated that the claim in the first suit was ₹ 14 lakhs and that the Company would, if so directed, deposit this amount under protest, subject to the result of the suit. So far as the other two suits are concerned, Sri Shekhar Shetty's contention is that the claims in the subsequent suits and the entire rest of the Bank's claim were hit-at by Order II Rule 2 of the Code of Civil Procedure. Incur opinion, the sanctions of limits from time to time were distinct transactions giving rise to distinct causes of action. In some cases the sanctioned limits were operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also come in the evidence of RW-1 that the documents executed during his time were executed by Sri and Smt Hegde in favour of the Bank and they were so executed in the normal course of business and though he had noticed the absence of dates in some documents, he had brought this to their notice. If the nature of cash credit transactions are understood in their proper perspective, in my view, despite the discrepancies in the various documents pointed out to me by the Learned Counsel, they have come into existence in the regular course of banking business and therefore, the plea of forgery must fail. The plea of forgery is also not sustainable since in my view HGL has ratified and adopted the accounts of the Bank regarding transactions in question by its own conduct as reflected in the balance sheets of HGL and the revival letters Exs. P-6, 7, 14, 15, 69,70 etc." Sri Sundaraswamy says that the observations of the Company Judge that some of the documents were signed when they were blank -- Sri Sundaraswamy would not call them findings -- even to the extent they go, are not justified and that even if on account of insufficiency of evidence of due execution, some doubt is ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included in them is swept up by the debentures.. I think, therefore, that at the present time, no practical good can result from a winding up order". From the order of the Company Judge, apparently, this point was not urged before him. But it appears to us that the position is really different on the facts. First, even a creditor who has full security for bis debt can move for winding-up though he may not seek to prove his debt in winding-up: (See-Pennington, 4th Edition,) Secondly, all the assets of the Company were not secured to the Bank. Karnataka State Financial Corporation was another secured creditor. It had supported the winding-up RW-3 refers to the existence of other debts to the extent of ₹ 74 lakhs. Thirdly, the case, of the Bank is that the value of the security had itself greatly denuded over the years and its debt in a large measure remained unsecured. The principle to which Sri Shetty appeals cannot, in our opinion, be invoked in the present case. We, therefore, see no substance in the point urged. 53. Point (k) ; Re : 'just and 'Equitable' Ground The next contention was that whether the finding of the Learned Company Judge on the 'j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l market when his foreign collaborator went into bankruptcy before bis project took off is also not clear from the record. However, with no formal education and starting his life in a humble way, he made a bold bid to achieve industrial fame." Sri Shetty urged that the considerations that learned Company Judge took as relevant were, by themselves, neither material nor conclusive. The circumstances that the Company had not declared dividend was not, by itself, decisive nor was the circumstance that the shares of the Company which were of a face value of ₹ 100/- had been shown to have been purchased, after the filing of the winding up petition, at ₹ 3/- per share. Sri Shetty pointed out that by no actuarial valuation could this value of ₹ 3/- per share be said to be the break-up value and that, at ail events, they were all after the filing of the petition. Sri Shetty stated that the learned Company Judge had, in substance, persuaded himself to the view that the substratum of the Company had disappeared. Learned Counsel urged that the view of the Company Judge on the 'just and equitable' ground was wholly unsupportable. He said that though Clause (f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Act'- We do not wish to be understood as having recorded a finding against the Bank under the ground available in Section 433(f). As stated earlier that finding on further examination, may be found fully justified. But, even without it the winding-up order can stand. 56. Before parting with the case we think that it will not be inappropriate to say that Company's enterprise did initially show some promise and potentiality. A modern Technology in this field and in the field of Printed Circuit Boards is, perhaps, an area with potentialities. On account of circumstances which can only be called unfortunate the Company has found itself in the present mess. The winding-up order would put a final seal on all its ambitions and potentiality. The apprehension of the Bank expressed quite often during the hearing was that, with all the security, it may not be able to realise even a part of its just dues. It appears to as that if Sri Hegde would put himself in a position to offer to the Bank terms which may be better than what the Bank would gain by its dissolution, then a way may, yet be found to rehabilitate the industry even after winding-up. We can only hope that, at least, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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