In Re: Ispat Industries Limited vs Unknown
2004 Latest Caselaw 1242 Bom

JUDGMENT

Vazifdar S.J., J.

1. The petitioner has filed this petition for the winding up by the Court of the company Deepak Machineries Pvt. Ltd. under the provisions of the Companies Act, 1956 on the ground that the company is unable to pay its debts.

2. The petitioner's claim arises in respect of C.R.C.A. sheets sold and delivered by it to the company. The amount due in respect of the said transactions and the mode of payment thereof was settled in terms of a writing dated 23rd April, 1999. It would be convenient to set out all six clauses, which read as under :-

"1. The total outstanding as on date is Rs. 1.5 crores (Approximately).

2. Mr. Saraf appraised us of the scenario today and informed that during the month of April, he will release payment between Rs. 25 to Rs. 40 lacs.

3. Mr. Saraf also indicated that things will improve from May, 1999 onwards and outstanding position will improve.

4. Mr. Saraf further indicated that he will make all efforts to clear all outstandings before we resume business.

5. The Credit Notes on account of (1) Rate Difference, (2) Quality and Grace Difference (3) Material returns and any other pending issues are to be settled in three weeks.

6. Ispat informed that the relationship between the two companies should move ahead after release of substantial amount of payment."

3. Thereafter by a letter dated 23rd May, 1999, the company informed the petitioner that it was unable to clear the outstandings due to their auditors objection on account of the petitioner not having issued the credit notes.

By a letter dated 24th May, 1999, the petitioner stated that the credit notes would be issued only after the outstandings were cleared. This stand may or may not be justified. It is however pertinent to note that in this letter, the petitioner stated that the company could withhold an amount of Rs. 15,00,000/- in respect of the credit notes and clear the balance outstandings of Rs. 1,36,00,000/- . It is then important to note that the company did not respond stating that the sum of Rs. 15,00,000/- suggested by the petitioner to be adjusted was too low. Indeed if it was too low the obvious response of the company would have been to insist that a higher amount be adjusted in respect of the credit notes. The stand taken by the company before me is that after issuance of credit notes and adjusting amounts due to the company by way of alleged damages, an amount of only Rs. 15,00,000/- will be found due and payable to the petitioner.

4. Thereafter the petitioner between 26th May, 1999 and 21st June, 1999, called upon the company to clear the outstanding and issue debit notes in respect of interest. The first response to these letters was on 21st June, 1999 when the company stated that the issue of the credit notes ought to be finalised. Even at this stage the company did not state that the petitioner's suggestion of adjusting Rs. 15,00,000/- on an ad hoc basis was unjustified as being too low. The petitioner therefore requested a meeting to resolve the issue of credit notes. Under cover of its letter dated 9th June, 1999 the petitioner enclosed a statement of accounts as per its record and called upon the company to reconcile its account and finalise the amounts with reference to the credit notes to be issued by the petitioner. The petitioner's requests for holding a meeting in this regard remained unanswered.

5. (a) The petitioner addressed three statutory notices under Section 434(1) of the Companies Act, 1956 dated 14th October, 1999, 8th March, 2000 and 21st July, 2000.

(b) The notice dated 14th October, 1999, called upon the company to pay a sum of Rs. 1,89,97,031/-. It was served at the Pune and Mahalaxmi (Mumbai) offices of the company. The company contends, and I shall presume correctly, that the office at Mahalaxmi is its registered office.

(c) The notice dated 8th March, 2000 was served at the Pune and Khar (Mumbai) offices of the company. In paragraph 6 of this notice, the petitioner stated that it had worked out the value of the credit notes to be issued by it in favour of the company at Rs. 10,19,485/-

(d) Thereafter, under cover of its letter dated 27th April, 2000, the company forwarded a pay order in the sum of Rs. 46,83,757/- towards part payment of the petitioner's dues and stated that the balance would be released by post dated cheques as soon as the credit notes were delivered. It is important to note that even at this stage the company did not contend that the amount of Rs. 15,00,000/- suggested by the petitioner in its letter dated 24th August, 1999 to be adjusted on an ad hoc basis was too low.

(e) The petitioner thereafter served a further statutory notice dated 21st July, 2000 at the Pune office of the company calling upon it to pay the balance amount of Rs. 1,00,81,349.60 ps. with interest.

6. Mr. Shah, on behalf of the company raised the following four defences to the petition:-

I. The statutory notices were not served at the registered office of the company.

II. Even assuming that the notice dated 14th October, 1999 was served at the registered office of the company, the petition if based on this notice is not maintainable as it merged in the subsequent statutory notices dated 8th March, 2000 and 21st July, 2000 and thereby lost its efficacy as a statutory notice.

III. The petitioner is not maintainable as there is a discrepancy between the amounts claimed in the statutory notices and the amount actually due.

IV. An amount of only Rs. 15,00,000/- is due and payable by the company.

RE : SUBMISSION I

7. As stated above, the petitioner addressed three statutory notices on the company, dated 14th October, 1999, 8th March, 2000 and 21st July, 2000. The first statutory notice was served at the Pune and the Mahalaxmi offices of the company. The second statutory notice was served at the Pune and Khar offices of the company. The third statutory notice was served at the "Pune office of the company.

8. It is the company's case that its registered office is at Mahalaxmi. This contention is not well founded. Even assuming it is, it does not provide a defence to the petition for a statutory notice was also served at the Mahalaxmi Office.

9. The statutory notice dated 8th March, 2000 was served at the Khar Office which is in fact the registered office of the company. Mr. Shah however submitted that it is not. He founded this submission on the fact that the company had filed form 18 on 11th March, 1995 changing the situation of the registered office from Khar to Mahalaxmi. Admittedly, however in the record of the Registrar of companies the office at Khar is shown to be the registered office of the company. Admittedly further no change has been effected pursuant to the notice. In that view of the matter the registered office of the company remains as disclosed in the records of the Registrar of Companies. This is the view taken by this Court in Mukund Kanaiyalal Patel v. Swamp Shree Yarn Pvt. Ltd., 2002(109) C.C. 413 where it was held as under :

"It is contended that the registered office had been changed in terms of the notice addressed by one of the directors to the Registrar of Companies and in terms of Section 146 once such a notice is sent it is the Registrar who has to carry out the change in the register maintained by him. Service of such notice at the changed address is good notice. The company has filed an affidavit stating that there was no resolution passed to the effect any change in the registered office and as such the communication was done without compliance with the requirement of law.

A company has its board of directors. The board of directors acts by resolutions passed, unless specific power is conferred by the articles and/or the memorandum of association delegating powers to specific person. In the instant case, it is not so. Though one of the directors did send a notice, the Registrar has not carried out the change in the register maintained by him under Sub-Section (2) of Section 146 of the Companies Act. As pointed out earlier mere sending of the notice is not sufficient. The Registrar must be satisfied that the change is duly authorized pursuant to a resolutions of the board of directors. It is therefore not a mere mechanical act on the part of the Registrar to effect the change in the register but he must be satisfied that the legal requirements have been complied with. The very fact that the change was not effected raises a presumption that the Registrar having not been satisfied has not effected the change. At any rate whatever be the reason the change has not been effected and consequently the registered address of the company remains as disclosed in the register maintained."

Apart from being bound by the judgment I am in respectful agreement with the same.

10. In any event the first statutory notice dated 14th October, 1999 was in fact served at the Mahalaxmi office of the company which, it is contended by the company, is its registered office. The same was returned unclaimed. Mr. Madon submitted that the notice was thus validly served. In support of this submission he relied upon a judgment of the Supreme Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr., , where the Supreme Court held that a notice returned as unclaimed is presumed to have been served. Paragraphs 22, 23 and 24 of the judgment read as under :-

"22. It is settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, vide Harcharan Singh v. Shivrani, , and Jagdish Singh v. Natthu Singh, .

23. Here the notice is returned as unclaimed and not as refused. Will there be any significant difference between the two so far as the presumption of service is concerned ? In this connection a reference to Section 27 of the General Clauses Act will be useful. The section reads thus :

"27. Meaning of service by post.-Where any Central Act of Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice."

11. (a) The reliance upon the judgment is well founded. The judgment applies with greater force to a case under Section 434 of the Companies Act, 1956. The Supreme Court was dealing with Section 138 of the Negotiable Instruments Act the provisions of which are stricter and wider than those relating to a notice under Section 434(1)(a) of the Companies Act.

12. Clauses (b) and (c) to the proviso to Section 138(1) of the Negotiable Instruments Act are relevant in this regard and read as under :-

"(b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice."

Section 434(1)(a) of the Companies Act reads as under :-

"434. Company when deemed unable to pay its debts. - (1) A company shall be deemed to be unable to pay its debts-

(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding (one lakh rupees) then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditors."

13. It would be noticed clearly that under Section 138(1) of the Negotiable Instruments Act, the payee or the holder in due course of a cheque is required to make a demand by giving a notice in writing to the drawer and the right to proceed under Section 138 of the Negotiable Instruments Act arises only in the event of the drawer failing to make payment within fifteen days of the receipt of the said notice. The two essential ingredients of a notice under Section 138 of the Negotiable Instruments Act are the giving of the same and the receipt of the same. Under Section 434 of the Companies Act, the notice is required "to be delivered". The Supreme Court in paragraphs 18 and 19 of the judgment noted that "giving a notice" is not the same as 'receipt of the notice". It is important to note that having noted the distinction, the Supreme Court however held in paragraphs 20 and 21 as follows :-

"20. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice in the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different stratiges and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure.

21. In Maxwell's "Interpretation of Statues", the learned Author has emphasized that "provisions relating to giving of notice often receive liberal interpretation," (Vide page 99 of the 12th Edn.). The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in Clause (b) of the proviso to Section 138, of the Act show that payee has the statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand". It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is despatched his part is over and the next depends on what the sendee does."

14. The Supreme Court thereafter went on to hold that a notice which is returned as unclaimed but which was despatched in the manner prescribed with the correct address on it is deemed to have been served.

15. The judgment would apply to a notice under Section 434(a)(1) of the Companies Act with greater force. Section 138 of the Negotiable Instruments Act entails criminal consequences, whereas Section 434(1)(a) involves only civil consequences. Moreover the requirements of a notice under Section 138 of the Negotiable Instruments Act are stricter and wider. Despite the same, the Supreme Court held that a person who properly addresses a notice and mails it would be deemed to have fulfilled his obligation of sending the notice even if the same is returned unclaimed. On a parity of reasoning, it must be held that a notice though returned unclaimed, if duly mailed by registered post addressed to the registered office of the company, must be deemed to have been "delivered" within the meaning of that expression in Section 434(1)(a) of the Companies Act.

16. I would come to this conclusion even or principle. Any other view would permit a dishonest company to avoid service of a notice in a variety of ways by refusing to claim the same from the postal authorities despite intimation of the delivery thereof. Take a simple example. Companies are known to have their registered office in premises where they do not carry on any significant manufacturing, trading or administrative activities. The premises are used as a registered office only for the purpose of convenience and for complying with statutory provisions. In such a case, the company could well avoid service of notices and then refuse to claim the same despite notification from the postal authority to do so.

17. In K. Bhaskaran (supra) the Supreme Court in paragraph 21 held that Section 138 of the Negotiable Instruments Act invites a liberal interpretation in so far as it relates to the giving of a notice. The Supreme Court in relation to a notice under Section 138 of the Negotiable Instruments Act applied the principle in Maxwell's Interpretation of Statutes that provisions relating to giving a notice often received a liberal interpretation. In my view this principle is equally applicable and ought to be applied in respect of a question regarding the delivery of a notice issued under Section 434(1)(a) of the Companies Act. Indeed such an interpretation would cause no prejudice to the company either. If in a given case the concerned officers of a company genuinely do not have the benefit of reading the notice for any reason whatever the same would furnish a valid ground for contending in the petition that may be filed that no presumption should be drawn against the company merely by virtue of the company not having replied to the said notice. On the other hand a view to the contrary would not only cause great prejudice to the creditors of a company but would in fact have the effect of rendering the provisions of sections 433 and 434 of the Companies Act otiose.

18. Mr. Madon further submitted that even assuming that no statutory notices were served at the Mahalaxmi office, the company is disentitled from raising this defence at it led the petitioner to believe that all the correspondence including the statutory notices ought to be addressed to the company's Pune Office. He further submitted that in fact there was a representation by the company to the petitioner that the office at Pune was the registered office of the company. In support of this submission he relied upon the judgment of a learned Single Judge of the Karnataka High Court in the case of Manganese Ore (India) Ltd. v. India Sandur Manganese and Iron Ores Ltd., 1999(98) Com.Cas. 755. However, considering the view that I have taken I do not find it necessary to decide this point.

19. The first contention that no statutory notice was delivered at the registered office of the company is rejected.

RE : SUBMISSION II

20. Mr. Shah then submitted that even assuming that the statutory notice dated 14th October, 1999 was served at the registered office of the company, the petition is not maintainable as thereafter the petitioner addressed two further notices and the company had made a part payment of Rs. 46,83,757/-. According to Mr. Shah, in view of these facts, the petition is not maintainable as the notice dated 14th October, 1999 had merged in the subsequent notices. Secondly by virtue of the part payment there was a difference between the amounts stated in the notice and in the petition. I will deal with the second reason while considering the next submission.

21. The object of the submission is obvious. If it. is upheld it would render the petition not maintainable for the two subsequent notices were not served at the registered office. (This is of course subject to Mr. Madon's alternative submission based on the judgment in the case of Manganese Ore (India) Ltd. (supra) which I have not thought necessary to consider. It is also subject to the point I have already decided in the petitioner's favour that a statutory notice was served at the Khar Office which is the registered office of the company.) There is however nothing in the scheme of the Companies Act in general or of Section 434(1)(a) in particular that supports Mr. Shah's theory of a merger of a prior statutory notice in a later notice rendering the former nonexistent. The doctrine of merger which applies to decrees of trial courts qua those of the Appellate Court cannot possibly apply to statutory notices under Section 434(1)(a). There is neither any reason or purpose that supports such a view. In the circumstances, I see no reason why the petition cannot validly be based on the first statutory notice dated 14th October, 1999 though it was succeeded by two other notices. The subsequent notices did not have the effect of rendering it invalid or no longer effective. The petition is therefore maintainable based on the statutory notice dated 14th October, 1999.

RE: SUBMISSION III

22. Mr. Shah submitted that the moment there is a difference between the amount claimed in the statutory notice and the amount claimed in the petition, a petition for winding up would not be maintainable. The submission is totally unfounded.

23. Even assuming that the amount claimed in the petition is erroneous it would make no difference so long as the petitioner is found to be a creditor for a sum which would entitle him to a winding up order. The point is in the fact covered by two Division Bench judgments of this Court.

24. In Pfizer Ltd. v. Usan Laboratories P. Ltd., 1985(57) Com.Cas. 236 : 1985 Mh.L.J. 554 a Division Bench of this Court held as under :-

"The short question we are considering is the position of the notice or of the subsequent petition when a part of the claim made by the creditor is seriously in dispute, but the remaining portion which prima facie would appear to be in order exceeds the limit of Rs. 500 indicated in Section 434. Shri Tulzapurkar submitted that the position is not res Integra being concluded by the decisions both of the English Court and of the Calcutta High Court, which decisions have taken a view contrary to the view which found favour with the learned Company Judge. Our attention was invited to these decisions and it becomes necessary, therefore, to refer to them.

In point of time, the first of the decisions is the decision given by Plowman, J., in In Re Tweeds Garages Ltd., 1962(1) Ch. 406 : 1962 (32) Com. Cas. 795. The relevant observations are to be found at pp. 413 and 414 of the report. An opinion has been expressed in the said judgment that it would be quite unjust to refuse a winding up order to a petitioner who is admittedly owned moneys which have not been paid merely because there is a dispute as to the precise amount owing.

Almost to the same effect are the observations in Cardiff Preserved, Coal and Coke Co. v. Norton, 1867(2) Ch. App 405. A contention had been advanced before the Appellate Court that the winding-up order which was being considered was bad because the creditor had demanded a sum of Great Britain Pound 628, and it appeared that he was entitled only to Great Britain Pound 411 7s. 9d.

This argument has been decisively rejected by Lord Chelmsford L.C., speaking for the Bench, at p. 410 of the report. It has been observed that even if the creditor has made a demand upon the company for payment of more than what was due, that per se will not make the notice or the consequential winding-up order bad or invalid, provided that there was a debt in excess of Great Britain Pound 50 due to the creditor.

Both the above decisions have been cited and followed by a Single Judge of the Calcutta High Court in Ofu Lynx Ltd. v. Simon Carves India Ltd., 1971(1) 41 Com.Cas. 174. The learned Single Judge was considering the validity of a notice under Section 434 of the Companies Act, 1956, and the contention raised was that the notice must be deemed to be had because a portion of the claim in respect of which notice had been given was disputed and prima facie the dispute was required to be upheld. It was observed :

"I, therefore, hold that a notice under Section 434 of the Companies Act, 1956 will not be rendered invalid only because of the fact that the amount of debt mentioned in the notice may not be exactly the correct amount of the debt due, provided the amount mentioned in the notice includes the debt due and exceeds the sum of Rs. 500."

In our opinion, the aforesaid decisions set out the correct principle and once we have reached the conclusion, it will have to be held that the dismissal of the winding-up petition on the basis indicated in the impugned order would be clearly bad and the order required to be set aside. Merely because there could be a serious dispute as to the liability to pay interest at all or at the rate of 18 per cent, would not render the statutory notice invalid or result in a dismissal of the winding-up petition."

25. This judgment was followed by another Division Bench of this Court in Tata Finance Ltd. v. K.S.N.G., Manufacturing Co., where the Division Bench held -

"11. .. It is true that there is some dispute about the claim of enhanced lease rentals on account of disallowance of claim of depreciation by the Income Tax department. There is, however, absolutely no dispute for the outstanding lease rentals which are in the range of nearly Rupees thirty lakhs. The terms of agreement are also very clear and in case of default, the company is liable to pay the service charges. When a part of claim made by the creditor is seriously disputed but the remaining portion is prima facie appear to exceed the limit of Rs. 500/- indicated in Section 434 of the Act, it would be unjust to refuse wind-up order on the ground that there is dispute as to precise amount owned. In re Tweeds Garages Ltd., 1962(1) Ch. 406; it was clearly held that it would be unjust to refuse a winding up order to the petitioner who has admittedly owned moneys which have not been paid merely because there is a dispute as to the precise amount owning. Almost to the same effect are the observations in Cardiff Preserved Coal and Coke Co. v. Norton, 1867(2) Ch. App. 405.

12. The learned Single Judge of Calcutta High Court in Ofu Lynx. Ltd. v. Simon Carves India Ltd., 1971(41) Com. Cas. 174 has observed :

"I, therefore, hold that a notice under Section 434 of the Companies Act, 1956 will not be rendered invalid only because of the fact that the amount of debt mentioned in the notice may not be exactly correct amount of the debt due, provided the amount mentioned in the notice includes debt due and exceeds sum of Rs. 500/-."

13. The judgment of Single Judge of Calcutta High Court has been cited with approval by the Division Bench of this Court in Pfizer Ltd. v. Usan Laboratories P. Ltd., 1985 Mh.L.J. 554 : 1985(57) Com.Cas. 236. Therefore, merely because a part of the claim was disputed by the company, the defence cannot be said to be legitimate and bonafide."

26. (a) Mr. Shah sought to support his submission on the basis of judgment of a learned Single Judge of this Court in Shantilal Khushaldas and Bros. Pvt. Ltd. v. Jayabala Suresh Shah and Anr., 1993(Supp.) Bom.C.R. (P.B.)589 : 1997(90) Com.Cas. 399, where it was held :-

"In my view having regard to the language of Clause (a) of Sub-Section (1) of Section 434 which contemplates that the statutory notice therein must relate to the amount "then due" and a demand having been made to pay all the amount "so due", the petition for winding up based upon such notice would be relatable to the demand contained in the said notice. The possibility, therefore, of either the company paying some of the dues mentioned in that notice or some additional claim having become available to the creditors to seek the remedy of winding up in the second petition would not be ruled out. In other words on the date on which the notice is served on the company it must be clearly told as to what amount was claimed from it as the amount due on the date of the notice. In the instant petition in paragraph 24 reference has been made to the petitioners' Advocate's letter dated February 20, 1991. In Clause (vii) thereof it is stated that the amount paid to petitioner No. 2 on two occasions remained without being included in the said notice by oversight and that the statement of claim was filed as correct statement on the earlier occasion. That goes to show that a situation can arise where there is likelihood of variations in the contents of the notice and actual position on the date of filing the petition. In a petition for winding up where the discretion of the Court is invoked strict compliance with the requirements of Section 434 of the Companies Act, will have to be insisted upon.

In the aforesaid view of the matter, I am inclined to hold that the present petition is incompetent and is not maintainable."

(b) The judgment, with great respect, is per incuriam in view of the judgment of the Division Bench of this Court in Pfizer Ltd. v. Usan Laboratories P. Ltd. (supra). It is also impliedly overruled by the Division Bench of this Court in Tata Finance Ltd. v. K.S.N.G. Manufacturing Co. (supra). This judgment therefore is of no assistance to Mr. Shah.

27. In support of this submission, Mr. Shah had to go and in fact went to the extent of submitting that if upon receipt of a statutory notice, the company makes part payment of the amount claimed, a petition for winding up based on the said statutory notice would not be maintainable as there would be a discrepancy between the amount stated in the statutory notice and in the petition. The difference in the amount mentioned in the notice dated 14th October, 1999 and the amount stated in the petition is on account of the petitioner having given credit for the part payment of Rs. 46,83,757/-. In other words, according to him, if on receipt of a statutory notice for a certain amount, a company makes part payment of a mere pittance, another statutory notice would be required before filing a petition stating therein only the balance amount due. To accept this submission would lead to an absurdity and frustrate any petition under sections 433 and 434 of the Companies Act. This is established by an illustration I furnished during the course of argument. If his argument is accepted, the company could again frustrate the filing of a winding-up petition by paying a mere fraction of this balance amount. This could go on ad infinitum rendering the filing of a winding up petition impossible and the provision of the sections 433 and 434 otiose. The argument is therefore rejected.

RE: SUBMISSION IV

28. Lastly, Mr. Shah submitted that an amount of only Rs. 15,00,000/- is due and payable as the company was entitled to credit on account of the price difference for the balance amount of Rs. 84,27,158.68/-. As I have already observed earlier, despite the fact that the petitioner had on 24th May, 1999 suggested withholding an amount of only Rs. 15,00,000/- towards the credit notes out of the total sum of Rs. 1,50,00,000/-, the company did not responded stating that the amount suggested was absurdly low. The company had at no stage staged the same. The company had not suggested what according to it is the value of the credit notes. Even upon the receipt of the statutory notice dated 8th March, 2000, which stated that an amount of Rs. 10,19,485/- was due to be adjusted towards the credit notes the company never disputed that the figure is absurd or unfair. Indeed, in this view of the matter, the entire claim of the petitioner stands established. In any event, in the circumstances, there can be little. If any, doubt that an amount in excess of Rs. 500/- is due.

29. In the circumstances, the following order is passed :-

(i) The company is directed to deposit Rs. 1,00,00,000/- within twelve weeks from today. It is clarified that this would be in addition to the amount already deposited.

(ii) In the event of the amount being so deposited and in the event of the petitioner filing a suit for recovery of the amount claimed in the petition within eight weeks of such deposit being made the amount shall stand transferred to the credit of the suit. In the event of the suit not being so filed the amount shall be returned to the company.

(iii) In case of failure on the part of the company to deposit the aforesaid amount, the petition shall stand admitted and shall be advertised in the Free Press Journal, Navshakti and Maharashtra Government Gazette.

(iv) The petitioner shall deposit an amount of Rs. 2000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default towards the cost of advertisement.

(v) In view of the fact that a sum of Rs. 15,50,000/ - is admittedly due and payable the petitioner is at liberty to withdraw the same with accretions thereto, if any, after a period of twelve weeks from today. This amount shall not be refundable in any circumstances as it is an admitted amount.

(vi) The operation of this order is stayed for a period of twelve weeks from today to enable to the company to carry the matter higher.