JUDGMENT
D.Y. Chandrachud, J.
1. The company petition has been filed in pursuance of a claim by the petitioner in the amount of Rs. 6,66,701 which has remained to be due and outstanding despite a statutory notice dated 8-3-2000, to which there was no reply by the respondent. The petitioner is an advertising agency which had carried out certain work in connection with advertising for a brand of tea known as ‘Hot Sip’ marketed by the respondent. In the company petition reliance has been placed upon the bills which have been raised by the petitioner upon the respondent from time to time and it has been stated on behalf of the respondent by the learned counsel that inspection of the invoices was given to the respondent before the reply to the company petition was filed. In the company petition it has been stated that the respondent issued a cheque on 30-12-1999 in favour of the petitioner drawn on Janakalyan Sahakari Bank Ltd. which was dishonoured upon presentation to the bank on the ground that it exceeded the arrangement. The ground for dishonour is significant because the bank did not consider that there was any discrepancy in the cheque, upon which reliance is now sought to be placed by the learned counsel for the respondent. The cheque was dishonoured on the ground simply that funds were not available to ensure the clearing of the cheque. The petitioner addressed a statutory notice under Section 434 of the Companies Act, 1961 (‘the Act’) dated 8-3-2000 and despite the receipt of the notice, there is no reply by the respondent. The company petition was filed almost seven months
thereafter and between receipt of the notice and the filing of the company petition there was no reply to the statutory notice.
2. An affidavit in reply has been filed on behalf of the respondent. In para 5 of the affidavit in reply, the contention which has been raised is that all the bills which have been received from the petitioner have been duly paid off by the respondent. The respondent has denied that any amount was due at the foot of the respondent’s account with the petitioner as alleged in the company petition. In so far as the cheque which was issued by the respondent is concerned, there is a denial that any cheque as alleged had been handed over by the respondent to the petitioner. The following statement has been made in para 5 of the reply :
“The cheque referred to in the paragraph under reference is a blank signed cheque which was issued to make payment to the newspapers lying with the petitioner. The cheque was not issued to the petitioner. The name, date and the amount on the cheque has not been filled up by or on behalf of the respondent. ”
The original of the cheque together with the dishonour memo of the Bank of India have been produced for the perusal of the Court. The cheque which has been produced would clearly show that the Director of the respondent has not merely signed at the foot of the cheque, but on the left hand corner of the cheque as against the name of the payee. Consequently, the name of the payee has clearly been countersigned on behalf of the respondent by its Director. Consequently, it is clear that the name of the payee which was originally recorded as A. M.X. Advertising (P.) Ltd. has been duly corrected against the signature of the respondent’s Director. This fact has also been adverted to in the rejoinder which has been filed on behalf of the petitioner as follows :
“Further, I say and submit that the respondent’s denial that the cheque was issued in favour of the petitioners and that it was blank cheque which had never been handed over to the petitioner, except to make payment to the Newspaper, and that it is a false fabricated and got up document are entirely false and baseless allegations. In this respect I say and submit that the cheque, which is annexed as Exhibit 1 to the petition has been signed at two places, i.e., at the regular place of signature and at the top left hand corner of the cheque, as the name of the payee was first incorrectly written and subsequently rectified, with the second signature authenticating the rectification. The second signature against the rectification establishes that the cheque was intended to be drawn in favour of the petitioners and that the respondent’s defence is therefore false to its knowledge, mala fide and untenable.”
In the affidavit in reply, the defence that has been sought to be made is that the cheque which was signed on behalf of the respondent was issued, “to make payment to the newspapers lying with the petitioners”. Even this statement is completely vague and it was left to the Court, with the
assistance of the learned counsel, to try and make some substance out of the averment. In para 14 of the rejoinder it has been stated that the petitioner had placed advertisements on behalf of the respondent in various publications and under the applicable regulations of the Indian Newspaper Society, the petitioner as the advertising agency was due and liable to pay the outstanding dues of all the publications. The publications in which the advertisements of the respondent were printed raised invoices on the petitioner for the amounts due and payable and the petitioner has in turn drawn invoices on the respondent. The petitioner has made the payment of the invoices of the concerned publications in respect of the advertisements of the respondent. It has also been stated that at no stage had the respondent made any payment directly to the concerned newspaper since as a rule cheques are accepted by newspapers only from accredited agents such as the petitioner.
3. In the affidavit in rejoinder the petitioner has annexed all the invoices at Exhs B-1 to B-55. Apart from the invoices a statement of account relating to the petitioner has been annexed at Exh. A and an amount of Rs. 7,66,701 is stated to be due and payable by the respondent at the foot of the account. The matter, however, does not merely rest upon the amount which is due and payable at the foot of the account since, the respondent has confirmed on 4-12-1998 that an amount of Rs. 7,66,701 was due and payable to the petitioner. The balance confirmation is annexed at Exh-C to the rejoinder.
4. On behalf of the respondent some of the invoices were sought to be disputed at the stage of the oral arguments on the ground that in the case of some invoices advertisements which have been placed by the petitioner with the concerned newspaper or publication have not been annexed. The learned counsel appearing on behalf of the petitioner explained that this was because the advertisements which have been placed in publications other than those in English had not been annexed to the rejoinder in order to obviate an office objection by the Registry of the Court. It is also stated that this was duly explained to the learned advocate for the respondent at the time when inspection of the invoices was given.
5. In the facts and circumstances of the case, therefore, it is clear that in respect of the advertisements which were got published by the petitioner for and on behalf of the respondent invoices were raised from time to time between February 1998 and August 1998. The respondent on 4-12-1998 confirmed that an amount of Rs. 7,66,701 was due and payable to the petitioner. Thereafter, on 5-7-1999, 8-7-1999 and 2-9-1999 an amount of Rs. 1 lakh was paid by the respondent to the petitioner by three payments. The respondent thereafter issued a cheque dated 31-12-1999 in the amount of Rs. 7,66,701 which came to be dishonoured. The defence
which was sought to be raised on behalf of the respondent is clearly not bona fide. There is a debt due and payable by the respondent to the petitioner.
6. On behalf of the respondent it was sought to be submitted that the petition for winding up was not to be entertained since (i) moneys are claimed to be due at the foot of the account; (ii) A triable issue in regard to the interpolation of the cheque was raised. In so far as the first of these defences is concerned, reliance was sought to be placed upon the judgment of a learned single judge of the Delhi High Court in Rishi Pal Gupta v. S.J. Knitting & Finishing Mills (P.) Ltd. 1994(1) 1 Comp. LJ 343. In the said judgment the learned single Judge of the Delhi High Court held that a winding up petition would not be maintainable where the claim in the petition was based on a running account between the parties. My attention was drawn to the fact that the aforesaid judgment of the Delhi High Court was duly considered by a learned single Judge, F.I. Rebello, J. in Satyam Sarees v. Kavim Import & Export (India) (P.) Ltd. [1999] 3 Comp. LJ 49. The learned single Judge of this Court in para 5.1 has held that he was unable to accept the ratio of judgment of the learned single Judge of the Delhi High Court, since in view of the admission of the respondent, in the circumstances of the case which arose before the Delhi High Court that a certain amount was due and payable the facts would be within the dictum of the judgment of the Supreme Court in Chandradhar Goswami v. Gauhati Bank Ltd. [1967] 1 Comp. LJ 98 (SC) 1058. The Supreme Court has noted that the mere entries in the books of account by themselves will not be sufficient to charge a person with liability except when the person concerned accepts the correctness of the entries. Now, in view of the facts of the present case, it is clear that the amount which is due and payable to the petitioner has been admitted by virtue of (i) the cheque which was issued by the respondent, (ii) the confirmation by the respondent on 4-12-1998 of the balance which was due, and (iii) part payment made by the respondent thereafter in the amount of Rs. 1 lakh.
7. There can be no doubt about the proposition of law that when a bona fide dispute is raised in a petition for winding up in which the validity or authenticity of a document is put in issue, it would not be appropriate to exercise the jurisdiction of the Court for winding up in a company petition. It is, however, not the law that the Court is divested of its jurisdiction the moment a document is disputed by the respondent in a petition for winding up. The facts of each case have to be considered by the Court and it is only when a genuine or bona fide dispute arises before the Court that the parties should be relegated to the remedy of filing a suit. Such a course of action will subserve the salutary object of the provisions of Sections 433 and 434 of the Act. In the present case the defence is not bona fide. In the affidavit in reply almost every defence has been sought to be taken in order to defeat the just claim of the petitioner.
8. In the circumstances, I find that there is no merit in the defence which has been raised in company petition. In the circumstances, the following order is passed :
The respondent shall deposit in the Court an amount of Rs. 6,66,701 within a period of twelve weeks from today. The petitioner shall file a suit for the recovery of its dues within a period of four weeks from the deposit of the amount. Thereupon the amount so deposited shall lie to the credit of the suit. The petitioner would be at liberty to make an application for withdrawal of the amount subject to furnishing of security.
9. The company petition shall stand admitted if there is any default on the part of the respondent in depositing the amount as aforesaid within period stipulated and in that event the petition to be advertised in Free Press Journal, Janmabhoomi and Maharashtra Government Gazette. The petitioner to deposit a sum of Rs. 2,000 with the Prothonotary and Senior Master within a period of four weeks from the date of default.