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Judgment
Sanjib Banerjee, J.—The company has not been called upon.
The Petitioner claims on account of money lent and advanced. The Petitioner says that, on or about 12 June, 1998, a sum of Rs. 5 lakhs was lent and advanced by the Petitioner to the company. The Petitioner relies on the money receipt executed by the company on such date which demonstrates that the loan was for a period of 120 days and was repayable with interest at the rate of 15 per cent per annum.
In the statutory notice of 27 January, 2009, the Petitioner claimed that a sum of Rs. 5 lakhs was indeed repaid by the company but that was adjusted against the interest to which the Petitioner was entitled. The notice asserted that the last of the payments had been made by the company on 19 June, 2006. There was no reply to the statutory notice.
In the petition, the Petitioner has relied on the money receipt of 12 June, 1998, the confirmation of accounts for the financial years 1998-99, 1999-2000, 2002-03, the cheque payments made on 17 October, 2005, and 19 June, 2006, and a voucher of 12 April, 2006, evidencing another payment by the company to the Petitioner.
Annexure F to the petition is a statement of accounts. In the accounts there is no payment shown during the year 1 April, 2007 to 31 March, 2008. As may be remembered, the statutory notice had asserted that the last payment that had been made by the company was on 19 June, 2006. Yet at paragraph 12 of the petition the company has alleged that the last payment that had been made by the Petitioner was on 27 July, 2007. The company says that a payment of Rs. 13,000 was made since the tax that had earlier been deducted at source by the company had not been deposited with the appropriate authorities by the company. There is no written corroboration of such payment and the company has denied the same.
The point taken in the affidavit-in-opposition is that the claim is barred by the laws of limitation. It is the company''s stand in its affidavit that since the Petitioner claims that the last admitted payment was made in June, 2006, the company petition could not have been instituted on 9 July, 2009.
The Petitioner submits that since the last admitted payment was made on 19 June, 2006, a period of 21 days, which is the time contemplated by Section 434 of the Companies Act, 1956, should be added to such date and limitation should be reckoned after a period of three years therefrom.
In support of such contention, the Petitioner relies on Section 15(2) of the Limitation Act, 1963. The Petitioner says that in computing the period of limitation for any suit of which notice has been given or where the law requires any notice to be given, the period of such notice has to be excluded before computing the period of limitation. The Petitioner relies on a judgment reported at Khedut Oil Cake Industries v. Union of India AIR 1988 Del 88 and refers to paragraph 10 thereof where Section 15(2) of the Limitation Act, 1963, was considered in the context of a notice issued to the Government u/s 80 of the Code of Civil Procedure, 1908. The Petitioner also relies on a judgment reported at Raj Kumar Dey and Others Vs. Tarapada Dey and Others, where it was held that Section 15(2) of Limitation Act, 1963, would apply to arbitration proceedings.
To begin with, Section 15(2) of the Act may not apply to a creditor''s winding up petition which is certainly not a suit. In any event, Section 434 of the Act requires a notice to be given and the presumption of inability to pay under the Companies Act, 1956, would arise upon the expiry of a period of 21 days from the date of receipt of the notice and the company''s failure to pay. The failure or negligence on the part of a company to pay has been legally construed to be the failure on the part of the company to pay without just cause.
The Petitioner here issued the statutory notice on 29 January, 2009. The petition was filed on or about 9 July, 2009, when the claim could not have been enforced after 19 June, 2009.
Strictly speaking, the Company Court may not be used as a debt-collecting court by a creditor. Though creditors bring petitions to the Company Court and the Company Court Assesses the merits of the claim and the substance of the defence, the adjudication is merely for the purpose of ascertaining whether there is any failure or negligence on the part of the company to pay a debt due or whether the claim is bona fide disputed. Just as a creditor has to affirmatively establish the claim to obtain an order of admission, the company has to demonstrate that there is an element of substance to its defence to ward off the admission.
The invocation of Section 15(2) of the Limitation Act is inapposite in the present context. As on the date of this winding up petition being filed, the petitioning creditor could not have enforced the claim by way of a regular suit unless it could establish that the company had, indeed, made payment in the year 2007. If the Petitioner had filed a suit on the same day that this company petition was brought, the date of the last admitted payment would not have permitted the Petitioner to pursue the claim. For a company to be adjudged unable to pay its debts would imply that there is an enforceable claim which remains outstanding. As to whether there is an enforceable claim in this case, hinges on the alleged payment said to have been made in the year 2007. This gives rise to a bona fide dispute.
It was not imperative for the Petitioner to issue the notice u/s 434 of the Companies Act, 1956, to enforce the Petitioner''s claim. Such notice was necessary for the Petitioner to take advantage of the legal fiction of the company''s inability to pay and did not touch upon the Petitioner''s right to claim payment. There is no prescribed period of limitation for bringing a creditor''s winding up petition. The prayer in such a petition is never for the payment of any money. The Company Court, if satisfied that there is an enforceable claim to which the company has no defence, allows the company a chance to avoid admission of the petition by making payment of the just dues of the creditor. Legally speaking, it is not a direction for payment but merely a condition set for warding off admission. It is for such reason that Section 15(2) of the Limitation Act would be inapplicable since a suit founded on the same cause of action would not have obliged the Petitioner to issue any notice u/s 434 or wait for a period of 21 days thereafter.
This point does not have to be answered conclusively one way or the other. As long as there appears to be an arguable case, the Company Court will not admit a creditor''s winding up petition and will leave the creditor to assert and establish the claim in more protracted proceedings. There is a further reason why this petition should not be admitted. It is evident from paragraph 12 of the petition that the Petitioner was aware that the claim could no longer be enforced since a period of more than three years had elapsed from the date of the last admitted payment. The Petitioner then thought up a date and included it in paragraph 12 of the petition though there is no mention of a payment having been made in July, 2007, in the statutory notice issued in January, 2009. The statement of accounts appended to the petition at pages 18 to 20 also does not reveal that any payment had been made by the company to the Petitioner during the financial year 2007-08.
For a petitioning creditor to approach this equitable jurisdiction, the person must come with clean hands and utmost candor. Irrespective of whether the Petitioner can avail of Section 15(2) of the Limitation Act, which appears to be inapplicable to the present case, since it is evident that the relevant averment by the Petitioner at paragraph 12 of the petition is contrary to the statements in the statutory notice where the Petitioner had categorically stated that the last payment had been made by the company to the Petitioner on 19 June, 2006, Company Petition No. 299 of 2009 is permanently stayed. The Petitioner may avail of any other remedy that may be available to the Petitioner in respect of the subject-matter of the claim herein.
The Petitioner will pay costs assessed at 200 GM to the company.
Urgent certified photocopies of this order, if applied for, be given to the parties subject to compliance with all requisite formalities.