- (1.) BY and under a cheque dated 7th March, 1995, drawn in the State Bank of India, the petitioner placed an Inter Corporate Deposit (I. C. D.) with the respondent company for a period of 90 days. The terms and conditions governing the I. C. D. were recorded by the petitioner by a letter dated 8th March, 1995 and it has been stated in para 6 of the company petition that these terms were accepted by the company by affixing its stamp on the letter. The relevant terms and conditions in the letter dated 8th March, 1995 provided that interest for the period 9th March, 1995 until 6th June, 1995 would be payable on a quarterly basis and on maturity the principal amount of Rs. 25 lakhs would be remitted to the petitioner with interest at the rate of 20% per annum on 7th June, 1995. Clause 3 of the terms and conditions provided as follows : "3. The above Inter Corporate Deposit along with interest thereon shall not be subject to lien of any kind and no adjustment of principal or interest amount can be made with other debts or claims which we may owe you. " In Clause 5, it was stipulated that the outstanding amounts shall bear interest at 24% per annum in the event of default and in Clause 7, it was stated that the acceptance of the cheque drawn by the petitioner would tantamount to the respondent agreeing to the terms and conditions governing the I. C. D. as set out in the letter. On 7th June, 1995, an amount of Rs. 26,25,000/- inclusive of interest became due and payable. The respondent-company having failed to repay the amount, a notice dated 17th June 1997 was issued on behalf of the petitioner by its Advocate calling upon the respondent to pay an amount of Rs. 47,95,002/- inclusive of interest or else to face a proceeding for winding up under sections 433/434 of the Companies Act, 1956. This notice was replied to on 7th July, 1977 by the companys Advocates stating that instructions were being obtained from the company and in the meantime, all the allegations were denied. It is common ground, that no reply thereafter was submitted to the statutory notice of winding up dated 17th June, 1997 and there has, in the circumstances, been no reply on merits denying either the receipt of the amount of Rs. 25 lakhs as an I. C. D. or the liability of the company to repay the amount to the petitioner. Significantly, there has been no denial of the terms and conditions governing the I. C. D, which were adverted to in the statutory notice of winding up, including the reiteration that the I. C. D. was liable to be refunded by the company without being subject to a lien of any kind or any adjustment of principal or interest with any other debt or claim which the petitioner may owe to the company. On 26th December, 1997, second notice under sections 433/434 was addressed by the Advocate of the petitioner and to the notice a reply came to be addressed on 16th January, 1998 by the company. In its reply, the company stated that in response to the notice of the petitioner, a guarantor of the company had held a meeting with a representative of the petitioner and "having regard to the on account payment made on that day, towards your over all account, it was agreed that the proposal would be submitted to you in the next two months in respect of settlement of the outstanding dues". The company, it must be noticed, also stated that it was agreed that certain claims raised by the petitioner were subject to final reconciliation and were thereby not valid and the proposed settlement should reflect the correct position.
(2.) THE petition for winding up has been instituted on the basis that there is a debt due and payable by the respondent to the company and that despite receipt of the statutory notice of winding up, the company has failed to repay the amount of the I. C. D. of Rs. 25 lakhs together with interest accrued thereon as agreed under the underlying terms and conditions of the contract between the parties. It must be noted at the outset, that in the correspondence which has been exchanged between the parties and which is annexed to the company petition, the company has not denied either the receipt of the I. C. D. in the amount of Rs. 25 lakhs, the underlying terms and conditions upon which the petitioner placed an I. C. D. with the company and the obligation of the company to refund the dues of the petitioner with interest accrued thereon. As noticed earlier, the first reply dated 7th July, 1997 on behalf of the company was a formal denial, as Solicitors often make, pending a detailed reply which in the present case was never sent. The tenor of the second reply dated 16th January, 1998 was that the company was liable to repay the dues of the petitioner.
(3.) IN the affidavit in reply which has been filed on behalf of the company to the petition the case which has been sought to be made out in defence is that the petitioner is the promoter of a company known as "j. K. Udaipur Udyog Limited" and that the said company is its wholly owned subsidiary. According to the respondent-company, the I. C. D. was a finance arrangement to enable the company to subscribe to the issue of partly convertible debentures of the J. K. Udaipur Udyog Limited. The respondent-company as co-manager to the public issue had also under-written a part of the issue and according to the respondent, it accepted this deposit of Rs. 25 lakhs only to accommodate the J. K. Group of companies which was trying to save the public issue of Partly Convertible Debentures of J. K. Udaipur Udyog Limited which was undersubscribed. In para 3 of the reply, it has been stated that the petitioner has "over simplified the matter" by only stating that they had placed an Inter Corporate Deposit of Rs. 25 lakhs with the respondent without stating as to why this amount has been invested. According to the respondent, one of its promoter directors, Shri Kailash Mehta was closely associated with one S. C. Jain who was the Group Financial Advisor of the J. K. Group of Companies. Essentially the defence is that the issue of Partly Convertible Debentures was undersubscribed and that in order to save that issue, Kailash Mehta of the respondent was approached by S. C. Jain of the petitioner to subscribe for the Partly Convertible Debentures. Accordingly, it was agreed that the company would subscribe to 1,50,000 P. C. Ds. each of Rs. 150/- and in order to finance the said application for allotment, the Singhanias through their Group of Companies would advance a sum of Rs. 50 lakhs to the respondent in the garb of an inter corporate deposit. After the allotment of 1,50,000/- P. C. Ds. the company would sell 3 lakhs equity shares which became available as a result of the conversion of the P. C. Ds. in the market and reimburse the amount which had been advanced by the J. K. Group and which had been placed as an Inter Corporate Deposit. In the circumstances, it has been stated that the respondent made an application for 1,50,000 P. C. Ds. and paid the allotment money aggregating to Rs. 63 lakhs out of which 1 lakh P. C. Ds. were applied for in the name of Mr. Kailash Mehta of the respondent. It has been stated that before the lodgement of these applications with the bankers to the issue, the petitioner and an other J. K. Group Company, Pranav Investments Ltd. advanced an amount of Rs. 25 lakhs each in the garb of an Inter Corporate Deposit.;