P.C.JAIN,J. - (1.) PETITIONER , United Asian Bank, Berhad has filed this petition for winding up against M/s. Jaipur Oil Products Ltd., under Sections 433 and 434 of the Companies Act, 1956. The learned company judge, after hearing learned counsel for the petitioner and learned counsel for the respondent -company, by his order dated May 15, 1981, admitted the winding up petition. Aggrieved by the order dated May 15, 1981, the respondent -company preferred an appeal before a Division Bench of this court and the Division Bench dismissed the appeal vide order dated March 22, 1982. The respondent -company, thereupon, tiled a petition for special leave to appeal before the Hon'ble Supreme Court, which was also dismissed in limine. Before the Supreme Court, on April 30, 1983, learned counsel for the respondent -company had made a statement that the petitioner would be willing to deposit with the petitioner -bank half of the amount, which is approximately Rs. 11 lakhs within six weeks. Thereupon the Hon'ble Supreme Court ordered that the special leave petition will be listed after the said deposit is made and on failure to comply with the condition with regard to the deposit, the special leave petition shall stand dismissed without reference to the court. It further appears that the Hon'ble Supreme Court stayed further proceedings in the company petition pending before this court till further orders. It further appears from the record that the respondent -company deposited a sum of Rs. 11 lakhs. The advertisement as directed by the company judge had been published on April 12, 1984 in 'Times of India ' and on April 4, 1983, in the ' Rajasthan Patrika' and in the Rajasthan Gazette on April 21, 1983. Qn April 29, 1983, learned counsel for the parties appeared before this court and submitted that though the requirement of the advertisement had been completed, still the court should await the orders of the Supreme Court before taking further proceedings in the matter, and on the request of learned counsel for the parties, the case was adjourned to be listed on July 22, 1983. The Hon'ble Supreme Court, however, dismissed the special leave petition as the publication of the petition was already made and the review petition filed by the respondent -company was also dismissed. After the vacation of the stay order, this court proceeded in the matter. The parties produced evidence and documents and, on April 29, 1985, learned counsel for the petitioner and learned counsel for the respondent -company jointly prayed that the case may be listed for final hearing on January 10, 1986. Thereupon, the case was listed for hearing on different dates, but, for one reason or the other, the hearing could not be completed. On July 29, 1987, learned counsel for the petitioner -bank submitted that the respondent -company had given certain proposals for settling, the matter and, as such, the case was adjourned, but no settlement could be arrived at between the parties and the case was again listed for hearing. On September 2, 1988, arguments were heard on the application. Shri Vaidyalingam, appearing on behalf of the petitioner -bank, concluded his arguments. Shri C. K. Garg, appearing on behalf of the creditors, raised an objection that the respondent -company had deposited a sum of Rs. 11,80,000 in compliance with the order of the Supreme Court, dated April 13, 1983, in Special Leave to Appeal No. 4616 of 1983 and the said amount was withdrawn by the bank. As such, till the amount so withdrawn by the petitioner -bank is refunded or deposited in the court, the petitioner should not be allowed to pursue the remedy of a winding up petition. In view of this objection, arguments were heard and the objection raised is being disposed oi by this order.
(2.) SHRI C. K. Garg, for the creditors, has submitted that having accepted half of the amount by withdrawing the same, the petitioner bank agreed that the company petition shall not be prosecuted further. The submission of Shri C. K. Garg, learned counsel for the creditors, is that the company has deposited the amount on the understanding that the petitioner -bank would agree that further proceedings in the company petition shall not be continued. He has further submitted that since the order of the Supreme Court requiring the respondent -company to deposit the amount has been complied with, the petition cannot be continued unless refund of the amount is made by the respondent -company. In order to substantiate this contention, Shri Garg has placed reliance on Bombay Cast -well Engineering P. Ltd., In re [1984] 55 Comp Cas 75 (Bom). In that case which was a petition for winding up brought by M/s. Castwell Engineering Corporation against Bombay Castwell Engineering Pvt. Ltd., in respect of a debt of Rs. 92,560.12, there was an agreement between the parties and under the consent terms, the company acknowledged its debt to the extent of Rs. 74,053 together with interest at the rate of 12% per annum from September 14, 1978, till payment. The consent terms provided for the payment of the amount by instalments. It was further provided that in the event of the company failing to pay any instalment on the respective due date or the last instalment, the petition would stand admitted and be advertised as mentioned therein. The company paid the instalments but committed default in the payment of one instalment which fell due on December 15, 1979. In view of the said default, the petitioner, acting on the consent terms, got the petition advertised in 'Bombay Samachar ', ' Indian Express ' and the Maharashtra Government Gazette on or about October 30, 1980. The company, in all, paid a sum of Rs. 68,510.64. On the date of hearing, the company sought to produce four cheques drawn in favour of the petitioners, out of which two cheques were dated February 10, 1982, one for Rs. 844 and the other for Rs. 9,000. The other two cheques were post -dated. The petitioner, however, refused to accept the cheques or to agree to any adjournment for realisation of the cheques. It was in these circumstances that the court directed the petitioners to deposit in the court the said amount of Rs. 68,510.64 realised from the respondent. But, the respondent -company refused to refund the amount contending that the company cannot be called upon to deposit the amount. However, the learned company judge did not agree to it and directed the petitioner to deposit in the court the amount of Rs. 68,510.64 on or before March 31, 1982. But, the petitioner failed to carry out the directions relating to the deposit of money in the court. It was in those circumstances that the petition was dismissed. Shri Garg has also placed reliance on Section 531 of the Companies Act which deals with the effect of winding up on incidental transactions. Shri Vaidyalingam, learned counsel for the petitioner, has submitted that the petitioner was not present in the court when learned counsel for the respondent -company had voluntarily made a request to deposit half of the amount in the court. There is no consent given by the petitioner -bank at any time for such a course to be taken by the respondent -company. In case any amount is paid during the pendency of the winding up petition, the petitioner -bank had a right to collect the same. He has further submitted that the case of Bombay Castwell Engineening P. Ltd. [1984] 55 Comp Cas 75 (Bom) has its own merits where there was a consent order passed by the court wherein the parties agreed to make payment and, further -more, there was a direction of the court as to the refund of the amount and still further, the respondent -company in that case, in spite of failure to make the payment of instalments on the due dates, had agreed to pay the balance of the amount and even the respondent produced four cheques for the remaining amount for payment to the petitioner. But, Shri Vaidyalingam submitted that in the instant case, there was no consent order. The petitioner never agreed that he would not prosecute the petition if half of the amount is paid to him. No agreement can be spelt out from the deposit of the amount as contended by Shri Garg, learned counsel for the respondent company. Shri Vaidyalingam placed reliance on another judgment of the Bombay High Court in Shri Lakshmi Traders Ltd., In re [1987] 62 Comp Cas 49 (Bom). In that case, in the petition for winding up, certain consent terms were arrived at under which the company agreed to pay its dues in instalments and in the event, of its committing default, it was agreed that the petition would stand admitted. Bat, subsequently, the company defaulted in payment of the instalments under the consent terms and the petiton had to be admitted. At the final hearing of the petition, the respondent -company contended that it had put in assets of about Rs. 3 crores in the unit, and at the time when the consent terms were arrived at, it was functioning. It was also submitted that if the company was ordered to be wound up, the liquidator could do no more than pursue the petition and that no benefit would accrue to the creditors by the making of a winding -up order. But the court directed the advertisement to be published after repelling the contentions of the respondent -company.
(3.) I have given my thoughtful consideration to the submissions made by learned counsel for the parties. I am of the opinion that neither the ruling referred to by Shri Garg supports nor the ruling relied upon by Shri Vaidyalingam in any way resolves the dispute which is raised in this company petition. In my opinion, the contention of Shri Garg has no merit. In both the cases referred to above, there was a consent order between the parties ; but, this is not the case here. The creditor is entitled to receive any amount which is paid towards the dues. However, such a payment is undoubtedly subject to the provisions of Section 531 of the Companies Act. From the mere fact that the respondent -company had deposited a sum of Rs. 11 lakhs in view of the order of the Hon'ble Supreme Court voluntarily, it cannot be construed that there was an agreement between the parties for not prosecuting the winding up petition. It may be stated that immediately when the petition was advertised, the petitioner approached the court for taking further proceedings and after the vacation of the order, the court proceeded in the matter and the respondent -company did not raise any objection. It was only when the case was heard in the year 1988 that the respondent -company raised the aforesaid objection when the amount was taken back by the bank in the year 1983. However, in both the cases, the amount was paid because of the consent order, which is not the position in this case. In the case on which Shri Garg has placed reliance, the conduct of the respondent -company was bona fide inasmuch as, in spite of default in payment of one of the instalments, the company came up before the court to pay the balance amount ; still the petitioner did not agree to it and it was in those circumstances that the petitioner was directed to deposit the amount back in the court and when the balance was not paid, the court dismissed the winding up petition. Such conduct is not visible in this case. Even if half of the amount retrains unpaid, the respondent -company is indebted in an amount which is more than Rs. 500. Thus, there is no merit in the objection.;