Document Fragment View

Matching Fragments

The case of Sitaram Bhartia is that the debentures were issued without consideration and that the debentures and the debenture trust deed are fictitious and void documents and were brought into existence by the company fraudulently in order to defeat the claim of its creditors.

5. It appears that Sitaram Bhartia lent and advanced a sum of Rs. 65,000/- to the company on 1-6-1949. He instituted a suit for the recovery of his dues in this High Court on 29-5-1952. He obtained a decree against the company for the sum of Rs. 76,600/- with interest and costs on 15-2-1956. The company preferred an appeal from the decree. On 9-4-1956 the Appellate Court passed an order staying execution of the decree, conditionally, on the company depositing Rs. 35,000/- with the Registrar and furnishing security for Rs. 45,000/- within one month from the date of the order. The company could not make the deposit or furnish the security. On 25-6-1956, the decree-holder obtained an order for transmission, of the decree to the District Court at Arrah. In September 1956 the decree was transmitted to the Arrah Court. On 7-11-1956, the decree-holder applied in the Arrah Court for execution of his decree. On 15-11-1956, the Arrah Court passed an order of attachment of the immovables and machinery belonging to the company. On June 27 and again on 7-8-1958 the Arrah Court passed orders for sale of the attached properties.