I.P.Mukerji - (1.) THIS is a winding up application coming up for final judgment. Only the petitioning creditor and the company have appeared. No other person either supporting or opposing the winding up has appeared.
(2.) THE company had borrowed substantial sums of money from the petitioning creditor from 1997. A legal notice was served by the petitioning creditor upon the company on 18th September, 2003 asking them to pay up the outstanding. Proceedings were taken by them before the Debt Recovery Tribunal, Lucknow. THE said Tribunal issued a certificate on 14th February, 2008 to the effect that the petitioning creditor was entitled to recover a sum of a little more than Rs. 17,00,00,000/- from the company. THE company preferred an appeal against such order before the Debt Recovery Appellate Tribunal at Allahabad, which, on 15th December, 2008 affirmed the said final order of the said Tribunal while dismissing the appeal for default. This winding up application has been filed on the ground that the company is unable to pay the said sum mentioned in the certificate of the said Tribunal. The company has taken no point regarding the merits of the claim. It has taken two technical points. The first is that the claim on which the winding up application is founded is barred by the laws of limitation on the ground that the claim of the petitioning creditor necessarily arose before the notice dated 18th September, 2003. Since the winding up application had been filed in 2009, the debt had become barred by limitation. The certificate or decree by the Debt Recovery Tribunal should not be the basis of the claim. The underlying debt should be the basis. When the period of limitation for a right to sue is computed, the time when the right first arose has to be taken into account and not any later event. Secondly, the winding up application is founded on a decree. Since no execution process is returned unsatisfied under section 434(1)(b), the winding up application is incompetent.
(3.) THIRDLY, reliance was placed on section 34 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 to argue that this Act had over-riding effect. When recourse was taken to this Act, recourse could not have been taken to filing of a winding up application under the Companies Act, 1956. The learned Senior Advocate appearing for the petitioning creditor on the other hand contended that prosecution of its claim before the Debt Recovery Tribunal did not prevent them from filing this winding up application. Filing of a winding up application is availing of a statutory remedy provided to a creditor to apply for winding up of a company for nonpayment of a debt. Secondly, the winding up application was competently filed on the certificate issued by the Debt Recovery Tribunal as affirmed by the appellate authority.;