Calcutta High Court
Kothari Marketing Pvt. Ltd. vs Ramesh Doshi on 6 June, 2000
Equivalent citations: [2003]115COMPCAS272(CAL)
JUDGMENT
1. This appeal is directed against the judgment dated June 24, 1998, passed by the learned single judge of this court in a winding up application wherein after admitting the winding up petition, the learned single judge directed the appellant-company to pay to the respondent petitioning creditor Rs. 2, 15,999 by way of the principal amount, interest assessed thereon and the costs of the winding up application.
2. The aforesaid direction for payment of the aforesaid amount was passed by the learned single judge on the basis of a reasoning contained in the judgment under appeal to the effect that the appellant in the affidavit-in-opposition filed to the winding up application before the learned single judge had not disputed the execution of the two promissory notes for Rs. 1,00,000 each which formed the basis of the winding up application filed by the respondent petitioning creditor in the trial court.
3. To properly appreciate the aforesaid context, we will reproduce herein-below the portion of the judgment under appeal which contains the aforesaid reasoning. It reads thus ;
"It appears that the claim of the petitioning creditor is founded on two promissory notes aggregating to Rs. 2 lakhs, copies of the said two promissory notes have been annexed to the winding up petition. It is the case of the petitioning creditor that both the said promissory notes have been signed by the managing director of the company. This is not disputed by the company in its affidavit-in-opposition. In that view of the matter, I pass the following order."
4. Since the learned single judge specifically mentioned about the admission in the affidavit-in-opposition filed by the appellant-company before the trial court, we necessarily have to refer to the affidavit-in-opposition. The perusal of para. 5 of the affidavit, the only relevant para, of the aforesaid purpose, clearly suggests that the appellant-company had clearly, categorically and unequivocally denied either about having received the loan or the managing director having executed the promissory note at all. In fact, the affidavit-in-opposition is replete with assertion after assertion by the appellant that neither the promissory note was executed by the managing director nor had any consideration passed. We reproduce hereinbefore para. 5 of the affidavit-in-position which speaks for itself.
"5. With reference to paragraph 5 of the petition, each and every allegations contained therein are denied and disputed. It is denied that on July 1, 1996, the company, through its managing director, Madhukar Jayantilal Kothari, borrowed a sum of Rs. 2,00,000 from the petitioner as and by way of accommodation loan as wrongfully alleged or at all. It is also denied that the said Madhukar Jayantilal Kothari executed two promissory notes both dated July 1, 1996, promising to pay to the petitioner on demand or order the aforesaid amount. The annexure being xerox copy of the promissory notes are also denied and disputed and the same are not admitted by the petitioner. It is stated that not a single naya paisa has been lent out by the said Ramesh Doshi and/or borrowed by the company. I put the said Ramesh Doshi to strict proof showing the payment. The promissory notes are not showing any payment. In the background of the company there is no receipt of the company from the said Ramesh Doshi and/or there is nothing due and payable by the company to the said Sri Ramesh Doshi."
5. There is no doubt whatsoever that the appellant had not admitted either about the receipt of the consideration or about the execution of the promissory notes. We are thus at a total loss to appreciate or understand as to how did the learned single judge come to record the aforesaid finding that the fact regarding the execution of the promissory notes was not disputed by the appellant in the affidavit-in-opposition.
6. In a winding up application filed under Sections 433, 434 or 439 of the Companies Act, 1956, if serious disputed questions of fact arise between the rival parties, the resultant consequence is to relegate the parties to a suit. A winding up court in exercise of a jurisdiction under Sections 433, 434 or 439 of the Companies Act, 1956, cannot pass an order for winding up the company nor can issue a direction to a company to pay any sum to the petitioning creditor if the company disputes relevant facts stoutly and squarely in the affidavit-in-opposition. It is only when the relevant facts are either admitted; or undisputed, or the defence put up by the company is so feeble, vague or weak that such an admission can be inferred from the pleadings and from the contemporaneous record, that a winding up court can pass an order in the nature of issuing direction to a company to pay a particular amount to the petitioning creditor. In the case before us, however, what we notice is that the company took upon itself the burden of disputing, rebutting and controverting all the relevant assertions of the petitioning creditor, viz. that either any promissory note has been executed or that any consideration had passed.
7. The learned advocate for the petitioning creditor-respondent has relied upon a judgment of the Supreme Court in the case of Bharat Barrel and Drum Manufacturing Co. v. Amin Chand Payrelal . After going through this judgment we find that the ratio in this judgment is wholly inapplicable to the facts of this case because this judgment was based upon a fact situation where the defendant had admitted the execution of the promissory note but had averred that the execution was not for valuable consideration received but it was for and by way of a collateral security. This judgment can thus be distinguished on the simple ground that in our case the appellant has categorically denied the execution of the promissory notes, In the face of such a denial, therefore, the winding up court cannot be in a position to resolve the disputed questions of non-execution of the promissory notes or as to whether any consideration had passed or not. The parties are, therefore, best left by being relegated to a suit.
8. For the aforesaid reasons, therefore, the appeal succeeds and the judgment under appeal is set aside. The parties are relegated to a suit.
9. The application and the appeal, being treated as on day's list, are disposed of accordingly. All undertakings in that behalf stand discharged- There will be no order as to costs.
10. All parties concerned to act on a signed xerox copy of this dictated order on the usual undertaking.