Prem Chand Jain
1. This judgment of mine would dispose of C. P. No. 235 of 1980 and C. P. No. 241 of 1980, which have been filed against M/s. Roophagar Credit and Investment P. Ltd.; C. P. No. 242 of 1980 against M/s. Bachan Motor Financiers P. Ltd., Roopnagar and another, and C. P. No. 243 of 1980, against M/s. Bala financiers P. Ltd., Ropar and another, as a common question of law and fact arises in these petitions.
2. In order to appreciate the controversy, certain salient features may be noticed which are being narrated from C. P. No. 235 of 1980 filed by Smt; Bhag Kaur and others against M/s. Roopnagar Credit and Investment P. Ltd.
3. M/s. Roopnagar Credit and Investment P. Ltd. (hereinafter referred to as ' the company ') was incorporated under the Companies Act, 1956 (to be called as ' the Act'), as'a private company limited by shares. The registered office of the company is situated at Ropar. The company has been doing the business of financing, etc., and has been inviting deposits from its shareholders and has also been paying interest to the depositors.
4. It is alleged in the petition that the petitioners had deposited various amounts with the company for a fixed period and the company had agreed to pay interest at the rate of 18% per annum ; that the company continued to pay interest for some period, but later on, it discontinued the paymentof the interest; that the petitioners desired to withdraw their amount anda request in respect thereof was made by them, but the said request wasnever acceded to and the petitioners were asked to give some more time asthe company was not having sufficient money to pay back the principalamount. The detail of the amounts belonging to the petitioners individually is given below :
Rs.1. S. Harbhajan Singh 5,2002. S. Karan Singh 3,2003. S Dara Singh 2,0004. Smt. Bhag Kaur 3,0005. S. Mewa Singh 2,0006. S. Ram Singh 36,0007. S. Sardara Singh 4,5008. Smt. Jajir Kaur 4,5009. S. Kulwinder Singh 4,00010. Smt. Charanjit Kaur 4,000
5. As the petitioners did not receive a favourable reply from the company, a registered notice under Section 434 of the Act was issued. The copy of the notice dated September 21, 1980, is attached with the petition as annex. P-11 and the acknowledgment receipt thereof in original is annex. P-12, The company did not send any reply whatsoever to the notice. As the company is unable to pay amounts to the petitioners, the present petition has been filed under Sections 433, 434 and 439 of the Act read with Rule 9 of the Companies (Court) Rules, 1959, for the winding up of the company.
6. The petition came up for a preliminary hearing on November 20, 1980, when notice was issued to the respondents. After, service, respondents have filed written statement in which besides raising certain preliminary objections, the material allegations made in the petition have been controverted. In the preliminary objections, it is averred that the petition is lacking in bona fides; that the respondent along with its sister concerns, namely, M/s. Bala Financiers P. Ltd., M/s. Bachan Motors P. Ltd., M/s. Mohali Transport Co. P. Ltd., have filed petitions under Section 433, 434 and 439 of the Act against M/s. Ambala Bus Syndicate P. Ltd.; that the total amount due to the respondents, and its sister concerns in those petitions comes to Rs. 18,58,131.69 ; and that despite statutory notices issued to M/s. Ambala Bus Syndicate P. Ltd., no payment has been made. In nutshell, what is stated in the preliminary objections is that huge amounts of money payable to the answering respondent and its sister concerns stand blocked and taking advantage of this fact, the present petitions have been filed by the petitioner at the instance of M/s. Ambala Bus Syndicate P. Ltd. A bona fide dispute is also alleged about the debt. On merits, the sum andsubstance of the averments is that the assets of the respondent-company and its sister concerns are far in excess of its liabilities; that the respondent-company and its sister concerns are primary financing institutions in Punjab and the Union Territory of Chandigarh ; that their credibility is an acknowledged fact and that the institution of the present petitions is only for the purpose of causing harassment to the respondent-company.
7. The petitioners chose to file a replication in which the stand taken in the petition is reiterated and the averments made in the written statement have been controverted.
8. On the pleadings of the parties, the following issues were framed:
(1) Whether the. amounts mentioned in the petition have become due to the petitioners from the company O.P.P.
2. Whether there is a bona fide dispute about the amount payable to the petitioners by the. company O.P.D.
3. Whether the petition suffers from malice and is liable to be rejected on that ground O.P.D.
9. The parties led evidence on the aforesaid issues. Thereafter, arguments were heard on March 12, 1982, and the petition was ordered to be advertised. On advertisement, C.P. No. 14 of 1982 and C.A. Nos. 50, 54 60, 67, 68, 88, 94 and 144 of 1982, have been filed in support of the petition while C.A. No. 127 of 1982 has been filed raising objections to the winding up of the company. The matter has now finally come up for hearing to determine whether the company be wound up or not.
10. I have heard arguments on the issues framed. The learned counsel for the parties did not deal with the issues separately. Hence, I will dispose of them together.
Issues Nos. 2 to 3 :
11. On these issues, it was contended by Mr. Narang, learned counsel for the petitioners, that the amounts, mentioned in the petition had become due to the petitioners from the compaay; that there was no bona fide dispute about the amounts payable to the petitioners by the company ; that the respondent had failed to prove that the petition suffered from any malice ; that in spite of a registered notice having been served, the company neglected to pay the amounts which had become due, within three weeks of the receipt of the notice, and that as the company was unable to pay its debt, the petition deserved to be allowed. In support of his contentions, the learned counsel referred to certain passages from the cross-examination of Bhupinder Singh Bala, managing director of the respondent-company, who appeared as D.W. 1, which read as under:
'It is correct that the amount which has been claimed by the petitioners is payable by the company; It is correct that no interest has been paid to them after August, 1980. It is correct that because of the going down of the financial position of the company amounts of certain receipts and also the amount of interest have not been paid in spite of the fact that the due date had expired. The amount payable to the creditors of the company comes to about Rs. 28 lakhs. '
12. On the other hand, the main stand taken on behalf of the respondents by Mr. D.N. Awasthy, their learned counsel, was that the financial position of the respondent-company was very sound ; that huge amounts are recoverable from M/s. Ambala Bus Syndicate P. Ltd. by the company and its sister concerns ; that if those amounts are recovered for which proceedings have already been taken, the money would immediately be paid to the petitioners; that before passing a winding-up order, the interest of creditors or shareholders has to be judged; that the majority of the creditors have given affidavits raising objections to the winding up of the company and that, in the circumstances of the case, no winding-up order should be passed against the company.
13. After giving my thoughtful consideration to the entire matter, I find considerable force in the contention of the learned counsel for the petitioners. As is evident from the statement of the managing director himself, the relevant portion of which has been reproduced above, it is quite clear that the liability of the company to pay the amounts claimed by the petitioners has been accepted. The managing director has also admitted that after August, 1980, no interest has been paid to the petitioners, and that because of the going down of the financial position of the company, amounts of certain receipts and also the amount of interest have not been paid in spite of the fact that the due date had expired. The managing director further admits that the amount payable to the creditors of the company comes to about Rs. 28 lakhs. From this statement of the managing director, there can be no escape from the conclusion that the company is unable to pay its debt; As has come in the earlier part of the judgment, the stand taken by the company is that more than Rs. 18 lakhs are to be recovered by the company and its sister, concerns from M/s. Ambala Bus Syndicate P. Ltd. In my view, that cannot be a ground to hold that there is a bona fide dispute or that the present petition suffers from malice or that no ground has been made out for winding up. It may be observed that the dispute between the company and its sister concerns and M/s. Ambala Bus Syndicate P. Ltd. is a family dispute. How it is settled is no concern of the creditors. It would be pertinent to mention that the respondent-company failed to reply to the registered notice sentto it by the petitioners and just kept quiet. If the company was genuinely feeling that it would be able to pay the amounts along with interest to their creditors, then they would have certainly sent a reply to the notice. The company in this case has failed to show that it is in a position to pay the amounts of the petitioners, or that there is bona fide dispute about the payment of the amounts or that the petition suffers from any malice. The learned counsel for the respondents had cited certain decisions before me, but I do not wish to burden this judgment by referring to them as I am deciding this case on its own facts, having satisfied myself that, on the facts proved, a case for winding up has been made out.
14. The learned counsel for the company had urged that as the majority of the creditors and shareholders were not in favour of the winding up, the petitioners were not entitled to any relief. I am afraid, I am unable to agree with this contention of the learned counsel. The mere fact that some creditors are not in favour of the winding up, can be no ground to refuse the relief to the petitioners. Moreover, on this file the company has not proved that majority of the creditor are not in favour of the winding up.
15. In view of the aforesaid discussion, I order the winding of the companies, i.e., M/s. Roopnagar Credit and Investment P. Ltd., M/s. Bachan Motors Financiers P. Ltd., Roopnagar, and M/s. Bala Financiers P. Ltd., Ropar, and direct the official liquidator attached to this court to take up the affairs of the companies, forthwith. The petitioners are directed to advertise the order in accordance with Rule 113 of the Companies (Court) Rules in The Tribune (English), Ajit (Punjabi) & Official Gazette (Pb.). I further direct that a copy of the order be filed with the Registrar of Companies within one month. However, I make no order as to costs.