1 CP-215-10 IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISIDICTION jmi COMPANY PETITION NO. 215 OF 2010. M/s. Teletime International Limited. ..Petitioners. vs. Santosh Processors Private Limited. ..Respondent. .... Mr. A. M. Sarogi a/w. A. Mishra for the Petitioners. Mr. R. Cama i/b R. A. Fernandes i/b Law Global for the Respondent. .... CORAM : S. J. KATHAWALLA, J. DATE : 27th OCTOBER, 2010. P.C. By this Company Petition, the Petitioners are seeking winding up of the Respondent Company Santosh Processors Private Limited (“the Company”) under sections 433 and 434 of the Companies Act, 1956. The Petition is at the stage of admission. 2. This Petition was earlier heard on 27th September, 2010 and parties were informed that the Petition is dismissed. However, when the reasons were being dictated, this Court had certain queries qua some averments in the pleadings. The matter was therefore kept for Directions 2 CP-215-10 on 30th September 2010 and the Order dated 27th September, 2010 was recalled. The Company was allowed to file its reply and the Additional Affidavit filed by the Petitioners is taken on record and the Petition is heard afresh. 3. According to the Petitioners, the directors of the Petitioners had cordial relation with the directors of the Company. Somewhere in the year 2004 the directors of the Company for themselves and on behalf of the Company approached the Petitioners for financial assistance. The directors of the Company presented a rosy picture to the directors of the Petitioners and represented to them that if the Petitioners deposit necessary amount with their Company, the Company will refund the amount double than what is deposited by the Petitioners within a period of 5 years. Based on the said representations the Company had “instigated” the Petitioners to deposit a sum of Rs.4,00,000/- which came to be deposited by cheque. In the Particulars of Claim annexed to the Petition it is contended that the amount of Rs.4,00,000/- paid by the Petitioners to the Company on various dates by cheque is due and payable by the Company with interest upto 16th January 2010 as follows :- 3 CP-215-10 Name of the Company Date Amount Days Rate Interest SANTOSH PROCESSORS PVT. LTD. 14.05.2004 29.06.2004 30.06.2004 08.09.2004 100000.00 100000.00 100000.00 100000.00 2075 2029 2027 1958 18.50 18.50 18.50 18.50 105171 102840 102738 99241 Say Rs.4,10,000.00 It is contended by the Petitioner have contended that the Company was required to refund double the amount to the Petitioners within a period of 5 years and by this time, if the interest is calculated on the said sum of Rs.8,10,000/- to be refunded by the Company a sum of Rs.8,10,000/- would be become due and payable by the Company to the Petitioners. 4. According to the Petitioners though the said amount became due and payable in the year 2009, the Company failed to repay the said amount along with the accrued benefits i.e. double the amount in respect thereof on one pretext or the other. The Petitioners have also filed an Additional Affidavit annexing the Ledger Account maintained by the Petitioners in respect of the Company and the audited accounts of the Company along with a Certificate of the Chartered Accountant that as per the Balance Sheet of the Petitioners for the year ended 31st March 2009 an amount of Rs.4,00,000/- is receivable from the Company. 4 CP-215-10 5. The Petitioners therefore, through their Advocate issued a Statutory Notice dated 16th January, 2010 to the Company calling upon the Company to pay an amount of Rs.8,00,000/- to the Petitioners. The Company vide its Advocate’s Reply dated 3rd February, 2010 denied and disputed its liability to pay any amount and further contended that the Claim of the Petitioners is time barred. The Petitioners thereafter filed the above Company Petition seeking winding up of the Company. It is submitted on behalf of the Petitioners that the Company is unable to pay its debts and deserves to be wound up. 6. The Company has filed its Affidavit in Reply disputing the Claim of the Petitioners. The Company has denied having made any representations to the Petitioners to double any amount. The Company has submitted that the entire case of the Petitioners is false and fabricated. There was no such contract oral or written between the Company and the Petitioners for doubling the amount in five years. It is submitted that the amounts reflected in the Bank Statement were not towards deposits with the Company by the Petitioners. It is stated that business of the Company is not to accept deposits and doubling them but the Company is in the business of bleaching and dyeing and the business relating to textiles. It is denied that any amount as alleged or otherwise 5 CP-215-10 is due and payable by the Company to the Petitioners. It is submitted that the amounts received by the Company in the year 2004 were against commercial transactions and hence long time adjusted by the Company. It is submitted that the Company had provided its services to one of the Directors of the Petitioners and the said Director had paid the said sums from the Petitioners Company which is the family Company of the Petitioners. It is submitted that there is no liability standing on date of the Company against the Petitioners. 7. I have perused the contents of the Petition and the Affidavits filed by the parties. An amount aggregating to Rs.4,00,000/- appears to have been paid by the Petitioners to the Company between the period 14th May 2004 to 8th September 2004. According to the Petitioners, the said amount became due on different dates i.e. 14th May 2009, 29th June 2009, 30th June 2009 and 8th September 2009. However, there is not a single letter from the Petitioners to the Respondents until 16th January 2010 by way of a Statutory Notice alleging that the Company is required to pay to the Petitioners double the amounts paid by them to the Company in the year 2004. The Company has by its reply dated 3rd February 2010 immediately disputed the claim of the Petitioners and has also contended that the claim of the Petitioners is 6 CP-215-10 barred by the law of limitation. It therefore appears that the Petitioners have made a claim qua the amounts paid by them to the Company in the year 2004 only in the year 2010. Prima facie it seems that upon realising that its claim would be barred by the law of limitation, the Petitioners have contended that the said amounts were advanced by the Petitioners on an understanding that the Company would return double the amounts after five years. Interestingly, though it is the case of the Petitioners that the amounts paid in the year 2004 by the Petitioners were to be doubled and paid by the Company on its due date, the Petitioners in the Particulars of Claim have calculated interest at the rate of 18.50% from the respective dates of issue of cheques aggregating to Rs.4,00,000/- upto 16th January 2010 i.e. the date of the statutory notice. 8. It is a well settled principle of law that the Company Court does not conclusively adjudicate the claims of parties but investigates summarily whether dispute as regards indebtedness is bonafide or not. In the instant case, in view of the aforestated facts, in my view, the Company has raised a genuine and bonafide dispute and have at least prima facie offered a proper/substantial explanation for its plea of no liability. The dispute, therefore, requires adjudication on further evidence in a properly constituted suit. The Hon’ble Apex Court has 7 CP-215-10 also in its decision in Amalgamated Commercial Traders (P) Ltd. vs. A.C.K. Krishnaswami and Another, reported in 1965 Company Cases 456 inter alia held that - “it is well settled that a winding up Petition is not a legitimate means of seeking to enforce payment of a debt which is bonafide disputed by the Company. A Petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed.............”. 9. For the aforestated reasons, the Company Petition is dismissed. However, there will be no order as to costs. 10. Needless to add that in the event of the Petitioners filing a civil suit against the Company in the matter in issue, the same will be disposed of on its own merits without taking into consideration any of the observations made in this order, which are prima facie and not upon a detailed adjudication of the disputes between the parties. [ S.J. KATHAWALLA, J. ]