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Patel Investments v/s Credential Finance Ltd.

    COMPANY PETITION NO.404 OF 2000

    Decided On, 11 January 2000

    At, High Court of Judicature at Bombay

    By, THE HON'BLE DR. JUSTICE D.Y. CHANDRACHUD

    Haresh mansukhani for the petitioners. S. S. Shah instructed by V. Deshpande and Co. for the respondents.



Judgment Text

The present petition for winding up has been filed in respect of certain sums of money advanced by the petitioners to the company under a bill rediscounting facility on May 16, 1996, May 22, 1996, and August 19, 1996. The company issued letters of confirmation in token of having received the demand draft from the petitioners and purported to enclose post-dated cheques in various amounts to the petitioners. The cheques, which were issued, were dishonoured. According to the petitioners, the petitioners thereafter, addressed a letter on August 19, 1996, to the company by which there was a roll over of the bill rediscounting facility for a further period of 90 days. Together with the said letter, another post-dated cheque came to be enclosed by the company.


2.The petitioners issued a statutory notice for winding up on February 25, 2000, and in reply thereto, there was a letter addressed on March 11, 2000, by the company. By its letter dated March 11, 2000, the company has taken the position that the payments which were made to the petitioners under the bill rediscounting scheme were on December 5, 1996, after which no further payment was made and the entire claim was, therefore, barred by limitation. The petitioner in its notice for winding up has sought to place reliance on a letter dated April 17, 1997, by which the company purportedly confirmed that an amount of Rs. 23,95,631 was due and payable to the petitioner. In reply to the notice for winding up, the company has denied that it had by its letter dated April 17, 1997, confirmed that an amount of Rs. 23,95,631 was due and payable and called upon the petitioner to furnish a copy of the said letter.


3.The bone of contention between the parties in the present case is on whether or not on April 17, 1997, the company had acknowledged its liability to the petitioner. If the company had in fact, addressed a letter dated April 17, 1997, which is at exhibit J to the petition, there is no doubt that the claim is within limitation. The letter dated April 17, 1997, is purported to have been addressed by one Vikas Dalvi, Assistant Vice-President Operations and Accounts of the company. In its reply, which has been filed in the present proceedings, the company has seriously disputed the authenticity of the said letter. The company has contended that by its letter dated April 19, 2000, it has set out its defence setting out that the letter dated April 17, 1997, was not available in the record of the company. The company also sought inspection of the said letter. According to the company, in its reply, Shri Vikas Dalvi, who was Assistant Vice-President had left the company in April, 1997, and that in any event, he had no authority to issue the said letter. In para. 8 of the reply, it has been stated that only the directors of the company are authorised to sign letters of acknowledgment of liability. No such authority has been conferred upon any employee. The letter, it is to be noted, does not bear any reference number.


4.Prolixity of pleadings is becoming a fashion of the times. The petitioner has filed its sur-sur-rejoinder in these proceedings on December 21, 2000, by which, for the first time, certain documents have been sought to be relied upon to demonstrate that even after April, 1997, when Vikas Dalvi is alleged to have left service, he had written a letter to a creditor of the company acknowledging the liability of the company setting out a schedule for the repayment of dues and in pursuance thereof, the company had in fact issued cheques. Learned counsel appearing on behalf of the company controverted the authenticity of the letter which has been sought to be relied upon and which was produced before this court for the first time in sur-sur-rejoinder. Learned counsel appearing on behalf of the company submitted that while the company had issued cheques, these were all signed by the directors and the company has no record of any letter having been addressed by the said Vikas Dalvi as contended by the petitioner.


5.I have heard learned counsel. In my view, there is a dispute as regards the authenticity of the alleged letter of acknowledgment of April 17, 1997. The petitioner has filed a suit before the Delhi High Court being Suit No. 550 of 2000, against the company for the recovery of its dues. In the said suit also, one of the principal issues is bound to be the question as to whether the suit has been filed within the period of limitation. Undoubtedly, the petitioner relies upon the alleged acknowledgment dated April 17, 1997, in order to sustain its claim that the said suit is within limitation. The question as to whether the said letter was in fact issued by the said Vikas Dalvi and also as to whether Vikas Dalvi had the authority to address such a letter, are questions which will have to be adjudicated upon at the trial of the said suit. In the present case, it is necessary to mention that (i) the original of the letter dated April 17, 1997, is not forthcoming though according to the petitioner, it is because the original document has been filed before the Delhi High Court in the pending proceedings; (ii) the defence of the company is that Vikas Dalvi had left its service in April, 1997; (iii) the letter which purportedly has been addressed on April 17, 1997, does not contain any reference number, like many other letters on record, such as those at exhibits C and D, which do contain a reference number; (iv) a letter which was sought to be relied upon for the purpose of establishing the authority of Vikas Dalvi was produced for the first time, belatedly in the sur-sur-rejoinder. The company has a bona fide defence that in any event, an employee in a position of a

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n Assistant Vice-President-Operations and Accounts had no authority to issue such a letter acknowledging the liability of the company. 6.In the circumstances, this is not a case in which winding up of the company is warranted or called for. The company has a bona fide defence in the petition for winding up. The petitioner, who has instituted a suit in the Delhi High Court, must be relegated to the remedies which it has thus adopted, in which the bone of dispute in regard to the authenticity of the letter dated April 17, 1997, like other issues, will have to be adjudicated. The company petition is accordingly rejected.
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