1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.53 OF 2010 M/s.Bluechip India Ltd. ....Petitioner V/s. Paradise Infrastructures Pvt.Ltd. ....Respondent Mr.Girin Pandit for the Petitioner. Mr.Sharan Jagtiani with Mr.Rahman i/b M/s.D.H. Law Associates for the Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 21ST JUNE, 2010. P.C. :- 1. This is a Petition for winding up the Respondent company inter- alia on the ground that it is unable to pay its debts. 2. On 20.1.2007 the Petitioner advanced a sum of Rs.1.00 crores to the Respondent repayable with interest at 10% per annum. Whether the advance was by way of a loan as contended by the Petitioner or as an inter corporate deposit as contended by the company makes no difference. The fact that the Petitioner had advance the said amount to the company repayable with interest at 10% per annum is admitted. 3. The company does not deny the fact that it owes the Petitioner a sum of Rs.1.00 crore with interest thereon at 10% p.a. from 20.1.2007 till payment. The only defence is that the amount is not repayable till after the year 2012. This is the only aspect therefore that requires consideration on facts. 4. The documents exchanged between the parties does not 2 specify the term of the loan. In the absence of any stipulation, it would be repayable on demand. According to the company, however, there was an oral agreement between the parties that the loan would not be recalled by the Petitioner till after the year 2012. 5. Mr.Pandit, the learned counsel appearing on behalf of the Petitioner states that this submission is belied by the fact that the company had issued two cheques towards the repayment of the principal amount of Rs.1,00,00,000/- and part payment of interest in the sum of Rs.5,92,000/-. 6. The company however, contended that the practice between the parties was that the company would issue post dated cheques as security from time to time. The cheques which were dishonoured were the last renewed cheques. This, it was submitted by Mr.Jagtiani, the learned counsel appearing on behalf of the company, establishes the oral agreement. 7. The fact that the cheques were issued from time to time would not establish an oral agreement. Issuance of the post dated cheques as security would in fact only be consistent with the amount being repayable on demand. If the amount was repayable after the year 2012, the cheque would have issued bearing a date thereafter. 8. It is important to note that in the reply to the statutory notices, this defence was not taken. The statutory notice is dated 18.4.2009. A typographical error therein was corrected by a letter dated 13.7.2009. The Petition was filed on 15.2.2010. The defence regarding the alleged oral agreement viz. that the loan was not repayable till after the year 2012, was taken for the first time in an affidavit in reply dated 31.3.2010. The defence 3 is therefore, clearly an after-thought. It is impossible to believe the contention in paragraph 20 of the affidavit in reply that the company did not respond to the statutory notices, as it was contrary to the understanding arrived between the parties namely the alleged oral agreement. This is not the normal course of conduct especially for parties such as these. If indeed, there was an oral agreement, as alleged by the company, it would immediately have replied to the statutory notices referring to the alleged oral agreement and denying its liability to repay the loan as demanded therein. 9. Mr.Jagtiani relied upon the letters addressed by the Petitioner from time to time returning the post dated cheques upon the company furnishing the fresh post dated cheques. 10. These letters in fact militate against the oral agreement and establish that the loan was repayable on demand. Each of the letters states : “As discussed and agreed by you payment on the renewed due date is the essence of the extension and please ensure that the cheques are cleared on presentation”. The company did not respond saying that the amounts are payable only after the year 2012. There is nothing to indicate why the company did not at any stage such as in reply to the above letters and the statutory notices record the oral agreement. 11. There is no explanation why the alleged agreement was never reduced to writing even originally. In other words, the company did not suggest any special circumstances, purpose or reason for not recording 4 the agreement in writing. If indeed the loan was repayable only after the year 2012, the simplest thing would have been to record the same in the deposit receipt or elsewhere. This militates against the oral agreement. 12. The Petitioner presented for payment two cheques both dated 31.1.2009 in the sum of Rs.1.00 crore and Rs.5,92,500/-. Mr.Jagtiani relied upon the fact that the proceedings under Section 138 of the Negotiable Instruments Act were adopted by the Petitioner only in respect of the cheque in the sum of Rs.5,92,500/-. This by itself cannot possibly establish an oral agreement. The Petitioner was not bound to file an application under Section 138 of the N.I. Act in respect of the other cheque as well. 13. Mr.Jagtiani submitted that no demand for repayment was made before the statutory notice. This, he submitted, established that the loan was not repayable on demand. 14. The statutory notice dated 18.4.2009 expressly stated that the Petitioner had made a demand on the telephone and that the directors of the company had promised to make payment shortly but had failed to do so. Considering the facts of this case and especially the fact that there was no reply to this statutory notice, I see no reason to disbelieve the same. The submission therefore even on facts is not well found. It would in any event make no difference as the statutory notice itself constitutes a demand. 15. In the circumstances, it is clear that the amount was repayable on demand. There is no defence whatsoever to the Petitioner’s claim. Even at the rate of 10% p.a., the amount due by the company to the 5 Petitioner as on date is at least 1.35,00,000/-. 16. Admittedly, interest was payable only at 10% p.a. That however would only be upto the date of the Petitioner exercising its rights to recall the loan which it did by presenting the said cheque on 31.1.2009. The Petitioner’s claim for interest thereafter cannot be restricted to 10%. That rate of interest was only upto the date the contract was required to be performed. The Petitioner is free thereafter to claim interest in accordance with law. 17. With a view to giving the company an opportunity of paying the amounts, the following order is passed :- i). In the event of the company paying an amount of Rs. 1,35,00,000/- together with further interest at 10% p.a. on the sum of Rs. 1,00,00,000/- from the date hereof till payment on or before 31.8.2010, the Company Petition shall stand dismissed. However even if the payment is made, the Petitioner is at liberty to adopt proceedings for recovery of any further amounts including towards further interest and interest at a higher rate from 31.1.2009 by adopting appropriate proceedings including another winding up petition. ii). In case of failure on the part of the Company to pay the amount as aforesaid, the Petition shall stand admitted and shall be advertised in Free Press Journal, Maharashtra Times and Maharashtra Government Gazette. The Petitioner to deposit an amount of Rs. 10,000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default.