A.K. Banerji, J. - (1.) Company petition No. 13 of 1994 has been filed by the Punjab National Bank (petitioner in short) against M/s. Modi Rubber Limited (respondent company in short) having its registered office at Modinagar, Ghaziabad, under section 433(e) of the Companies Act, 1956 (the Act in short) on the ground that the company is unable to pay its debts, consequently, should be wound up by this court. Company petition No. 14 of 1994 has been filed by the petitioner bank against M/s. Modipon Limited, having its registered office at Modinagar, Ghaziabad, under section 433(e) of the Act on identical grounds, namely, that the respondent company is unable to pay its debts. As common facts and identical questions are involved in both these company petitions, both have been connected and heard together and are being decided by a common judgment.
(2.) The relevant facts in brief as set out in the aforesaid two petitions are that M/s. Modi Spinning and Weaving Mills Company Limited (M/s. Modi Spinning in short) approached the petitioner bank for a bonus term loan of Rs. 101 lakhs. The said loan was sanctioned and disbursed by the petitioner to the said company on 17.7.1982. The loan was to be repaid in 12 monthly instalments commencing three months after the disbursement thereof on a minimum rate of interest of 20.5% per annum with quarterly rests till the date of payment in full. In order to safeguard the bank's interest with regard to the repayment of the said loan, the managing director and the other authorised signatories on behalf of M/s. Modi Rubber Limited while acting as a guarantor executed an agreement of guarantee dated 2.8.1982 and also agreed to pay the bank on demand all principal, interests, costs, charges and expenses, etc., in respect of the said loan. A copy of the deed of guarantee is annexed to the petition as Annexure 3 thereof. Similarly, in respect of the same loan, another deed of guarantee dated 17.7.1982 was executed by M/s. Modipon Limited and a copy of the said deed of guarantee is annexed to the company petition No. 14 of 1994. The two deeds of guarantee were on identical terms. Admittedly, the principal borrower company failed to maintain financial discipline and committed gross irregularities in the repayment of the loan. That when after repeated requests and reminders, the principal borrower company and the guarantor companies, namely, Modi Rubber Limited and Modipon Limited, failed to come forward, the petitioner bank was constrained to call up the loan and, subsequently, sent a statutory notice, dated 28.1.1994 to the principal borrower company as well as to the two guarantors named above, calling upon them to pay the outstanding dues which on 1.1.1994 was worked out to Rs. 1,66,93,458 along with upto date interest failing which petition for winding up shall be filed before this court. In the meantime, it transpires that M/s. Modi Spinning became a sick under- taking and the BIFR vide its order dated 2.12.1993 recommended the winding up of the said company under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985, against which order an appeal was preferred before the Appellate Authority which stayed the operation of the recommendation made by the BIFR. On behalf of M/s. Modi Rubber a reply dated 28.1.1994 was given to the said statutory notice. A reply to the notice was also given by M/s. Modipon Limited on 19.2.1994. Both the respondent companies deny their liability to pay any amount to the petitioner and stated that they are under no legal obligation to comply with the demand made in the notice. Hence, the aforesaid two petitions.
(3.) This court vide its order dated 1.4.1994 issued notice on both these petitions to the aforesaid respondent companies to show cause why the petition may not be admitted and advertised and restrained the respondent companies from transferring/or alienating their assets till further orders of the court. In response to the said notice, appearance was put in by both the respondent companies who have filed their counter affidavits to the petition. The petitioner has filed rejoinder affidavits to the said two counter affidavits. The parties have also exchanged supplementary counter and rejoinder affidavits.;