- (1.)THIS appeal is directed against an order dated May 18, 2007 when the Hon'ble First Court was pleased to admit the petition for a sum of Rs. 2. 10 crore (Rs. 60 lakhs plus Rs. 1. 5 crore)on account of principal together with interest at the rate of 8 per cent per annum on the principal sum of Rs. 60 lakhs from March 18, 2002 as by a letter of such date the petitioner was unconditionally offered to supply vehicles of value of Rs. 60 lakhs and sought to adjust it against the sum due in its books to the petitioning creditor.
(2.)THE Hon'ble First Court further held that if the company pays a sum of rs. 60 lakhs together with interest as aforesaid to the petitioner within six weeks from date and furnishes cash security of Rs. 1. 5 crore to the Registrar, original Side of this Court for the same being deposited in the highest interest bearing deposit within eight weeks from date, the petition shall remain permanently stayed. In such event, the balance claim of the petitioner, save to the extent of Rs. 60 lakhs and the interest thereon, will relegate to a suit and the deposits in the name of the Registrar, Original Side will stand to the credit of the suit if such suit is instituted within four weeks from date of the security being furnished to the satisfaction of the Registrar. If either the sum of Rs. 60 lakhs with interest thereon is not paid to the company within six weeks from date or the security of Rs. 1. 5 crore is not furnished within eight weeks from date, the petition will be advertised once in the "the Telegraph" and once in the "jansatta". Publication in the Official Gazette will dispense with. The advertisements should indicate that the matter would be returnable on the next available Court day four weeks after the date of publication in the event, the petitioner fails to file the suit within time indicated, the company will be at liberty to seek discharge of the security.
(3.)THE facts revealed from the case is that Ashok Leyland Finance Ltd. (hereinafter referred to as the "ashok Leyland"), the petitioning creditor, is a manufacturer of vehicles and Siddarth Automobiles Ltd. /the appellant herein was appointed as a dealer of the vehicles manufactured by Ashok Leyland. Pursuant to the dealership agreement, the petitioning creditor sold and delivered motor vehicles and spares to the appellant from time to time and the same was done on principal to principal basis.