JUDGMENT - F.I. REBELLO, J.:---The petitioners have filed this petition against the Company under sections 433 and 434 of the Companies Act, 1956. The statutory notice dated September 22, 1997 has been served on the Company. In reply by letter of October 24, 1997 the Company stated that the demand as made was not tenable and contended that there were serious disputes. It was further set out that the conduct of the petitioners was malicious and vexatious. The interest and charges was also disputed. It is contended that the petitioners received excess payments by way of interest. It was further pointed out that the Company could cancel the transactions entered into by the Directors which were detrimental to the business interests of the Company and its shareholders. Lastly it is contended that there was a bona fide dispute. It is further averred that the Company is liable to pay the amounts decided by the Competent Court or by mutual negotiations. The case of the petitioners is that the Company had approached the petitioners for deposits and at the request of the Company the petitioners lent and advanced working capital between 5th December, 1995 to 23rd October, 1996 as intercorporate deposit totalling to Rs. 2,30,00,000/-. To secure due repayment the Company issued 8 postdated cheques. In the meantime the Company approached the petitioners for renewing the deposits as the Company was not in a position to repay the amounts on maturity. At the request of the Company the petitioners agreed to further renew the deposit totalling Rs. 2,30,00,000/- on the Company executing fresh sets of security documents. Towards the various amounts which were renewed the petitioners were secured by the following documents:-- (i) Demand Promissory Note. (ii) Postdated cheques for the same. (iii) Intercorporate Deposit Receipt. (iv) Letters of assurance. The various dates are not being referred to as they differ from deposit to deposit. The various amounts and their renewal are set out in paragraph 10(a) and 10(h) of the petition. By separate letters the Company agreed to pay interest at the rate of 22.5% per annum and had in fact paid interest at the said rate. It is also averred in para 12 that Mr. Dhirajlal H. Vora, Mrs. Ranjana Dhirajlal Vora, Mr. Rajesh Dhirajlal Vora, Mrs. By separate letters the Company agreed to pay interest at the rate of 22.5% per annum and had in fact paid interest at the said rate. It is also averred in para 12 that Mr. Dhirajlal H. Vora, Mrs. Ranjana Dhirajlal Vora, Mr. Rajesh Dhirajlal Vora, Mrs. Sunayana Rajesh Vora, Dhirajlal H. Vora (HUF) and Rajesh Dhirajlal Vora (HUF) were the contractual tenants of certain properties on the 4th Floor of a building known as Mehta Mahal which belonged/owned by the trust known as Mehta Charitable Trust. The said persons had agreed to give collateral security of the tenanted premises in favour of the petitioners by six agreements of Leave and License. Creation of license requires the permission of the landlord. The petitioners requested the office bearers of the Company to obtain the necessary permission. Under some pretext or the other written permission of the landlord was not obtained and as such the said agreements had not been acted upon nor did the agreements create any collateral security as was intended when the agreements were entered into. The petitioners after giving notice to the Company presented 8 postdated cheques. The said cheques, however, when presented were dishonoured either on account of payment stopped by the drawer or exceeding arrangement. The petitioners have filed separate proceedings under section 138 of the Negotiable Instruments Act on account of dishonour of cheques. Thereafter the statutory notice was served. It is contended that the Company did not dispute their liabilities by replying to the notice nor secured the petitioner and as such the Company was due and owing to the petitioners an amount of Rs. 2,54,54,349,31 paise with further interest as set out therein. In para 19 of the petition it is pointed out that the Company is indebted to the petitioners and Associate Companies in a sum of more than Rs. 4.00 crores. It is also averred that the petitioners have come to know that there are a large number of creditors whose debts have not been liquidated by the Company including Dena Bank. It is, therefore, pointed out that the Company is financially insolvent and as such needs to be wound up. 2.On behalf of the Company, Rajesh B. Vora, Managing Director has filed reply. It is, therefore, pointed out that the Company is financially insolvent and as such needs to be wound up. 2.On behalf of the Company, Rajesh B. Vora, Managing Director has filed reply. It is pointed out that the petition is not bona fide and the petitioners have approached the Court with unclean hands by suppressing material facts from the Court. It is then also contended that when the statutory notice was issued no amounts were due and payable and as such no cause of action has accrued in favour of the petitioners. It is also pointed out without prejudice that all the amounts advanced have been secured. It is also pointed out that the Company is a running concern. It has been elected as one of the 500 most valuable companies in India by the Magazine Business Today and reported to be amongst the fastest growing companies. In that light of the matter if the petition for winding up is ordered, it will be against the interest of the creditors and shareholders as also against the public and national interest. The Company, it is pointed out, has 350 employees and 1680 shareholders. The products manufactured by the Company are used by leading automobile manufacturers in the country. The amounts at any rate have been secured by valid leave and license agreement. Various other contentions have been set out. Reliance has been placed on the Leave and License Agreements and other documents in support of their contention that the amounts have been secured. On behalf of the Company their learned Counsel has submitted as under :-- (1) That the transactions are with a group of companies and liabilities are subject to making up accounts and consequently the accounts having not been made up, the Company petition should be rejected. (2) The statutory notice was not based on any cause of action when served in March, 1997. (3) The petitioners are guilty of suppressing material facts by not disclosing the large amounts that they had received from the Company and its sister concerns and the various agreements to secure the petitioners. (4) The petition being not been bona fide must also be rejected. (3) The petitioners are guilty of suppressing material facts by not disclosing the large amounts that they had received from the Company and its sister concerns and the various agreements to secure the petitioners. (4) The petition being not been bona fide must also be rejected. (5) Some of the promissory notes as well as receipts have not been duly stamped and in the light of that it would be inadmissible in evidence and consequently the petition based on the unstamped promissory note as also unstamped receipts would not be maintainable. Reference has been made to several documents to that effect. (6) The liability has been transferred to the persons mentioned in the license agreements and as such also the Company is not liable on that count. (7) The transaction is a money lending transaction prohibited by the Bombay Money Lenders Act, 1946 and in that light of the matter also the petition ought to be dismissed. On behalf of the petitioners their learned Counsel sought to contend that the petition as filed both under section 433(1)(a) of the Companies Act and by virtue of the statutory notice served and consequent failure by the Company to pay and/or raise a bona fide dispute it is deemed that the Company is justly indebted to the petitioners by virtue of section 434(1)(a) of the Companies Act and as such the Company be wound up. It is pointed out that in a case under section 434(1)(a) all that the petitioner must establish is that the Company is indebted in a sum of over Rs. 500/- and once it is so established and the Company having failed and neglected to pay or secure the petitioners the order of admission of the petition must follow. Independently it is pointed out that the petitioner has been able to show that the Company is indebted and needs to be wound up under section 434(1)(c) of the Companies Act. 3.At the outset I may point out that in so far as the petition for winding up on the ground that the contingent and prospective liabilities of the Company are more than its assets or net worth must be rejected. Apart from the averments in para 19 there is no other material placed in support thereof. 3.At the outset I may point out that in so far as the petition for winding up on the ground that the contingent and prospective liabilities of the Company are more than its assets or net worth must be rejected. Apart from the averments in para 19 there is no other material placed in support thereof. In fact in para 5 of the petition, the petitioners themselves have pointed out that the issue and subscribed share capital of the Company is Rs. 15.00 crores. In that light of the matter I do not propose to consider the petition for winding up. I propose only to consider whether the petitioners have made out a case under section 434(1)(a) read with section 433(e) of the Companies Act. The petitioners have produced documentary evidence to show that the petitioners had advanced to the Company various amounts which were secured by various securities. Even if the promissory note and the receipts are excluded on the ground that they are improperly stamped as has been contended there are still other documents in the form of cheques issued and acknowledgments evidencing payment by the petitioners to the Company. It is in this context that the contentions as raised need to be examined whether they are bona fide or credible to relegate the petitioners to file a suit. 4.The first contention is that these are all group transactions by various companies of the petitioners and sister companies having advanced various amounts to the petitioners. That may be true. However, the fact remains that in so far as the petitioners are concerned, the petitioners have advanced to the Company an amount of Rs. 2,30,00,000/- as set out therein and it has been renewed from time to time. The fact that the other sister companies may have made payments can be no answer in so far as the petitioners are concerned. The petitioner is a legal entity. The Company must show that it has secured and/or paid to the petitioners herein the amounts claimed. If it has paid excess amounts to the said sister companies the Company can seek relief against those sister companies. It can be no answer in so far as the claim of the present petitioner is concerned. Hence, that contention must be rejected. 5.The second contention is that on the date of the statutory notice there was no cause of action. It can be no answer in so far as the claim of the present petitioner is concerned. Hence, that contention must be rejected. 5.The second contention is that on the date of the statutory notice there was no cause of action. The petitioners in the petition have pleaded and set out that intercorporate deposit was first effected by payment of various amounts from 5th December, 1995 to 23rd October, 1996. These have been renewed from time to time. Against the renewal the Company has secured the petitioners by separate documents in the form of promissory notes, intercorporate deposit receipts-postdated cheques and letter of assurance. Apart from that the leave and license agreement itself evidence the fact that the petitioners had advanced moneys to the Company. Therefore, on the date of the statutory notice the Company was due and owing moneys to the petitioners. The contention that there was no cause of action must consequently also be rejected. 6.The third contention has been suppression of material facts. I am unimpressed by the said contention. The petitioners in their petition have set out various details. The omission to point out some transactions cannot make it a case of suppression of material facts. At any rate in a case under section 434(1)(a) all that the petitioner must establish is that the Company is indebted to the petitioners in an amount of over Rs. 500/-. This the petitioners have established. That contention of the respondent must also be rejected. 7.The fourth contention is that the petition was based on the unstamped promissory notes and receipts and as such could not have been taken in evidence by any Court. I need not refer to the authorities relied upon as I propose to accept the said contention that the promissory notes which were not properly stamped or the receipts which were not stamped could not have been tendered in evidence. The petition, however, is not based on the promissory notes or the receipts alone. They were merely collateral securities and as such even if such documents are excluded the petitioners have independently been able to show that the amounts were advanced and secured by the Company. Hence, the said contention is rejected. 8.The fifth contention is that the amounts were secured by way of leave and licence agreement. A reading of the agreement itself shows that the agreements were entered into as a collateral security. Hence, the said contention is rejected. 8.The fifth contention is that the amounts were secured by way of leave and licence agreement. A reading of the agreement itself shows that the agreements were entered into as a collateral security. That security was for the due repayment of the loan by the Company to the petitioners. Even otherwise in para 12 of the petition the petitioners have pointed out that the agreements were never acted upon. It is no doubt true that the Company contended that the Power of Attorney had been given in favour of the petitioners by the persons with whom the leave and licence agreement had been entered into. Even assuming that such a Power of Attorney had been granted no permission of the landlord has been obtained till date. Hence, it cannot be a security for due repayment of the loan. The agreements do not show as was sought to be contended on behalf of the Company that the debts have been transferred to the account of the persons whose names were shown in the agreements. That contention also deserves to be rejected. 9.On 12th February, 1999 the judgment was dictated in open Court and a conditional order was passed. However, before the judgment was signed another Company Petition in respect of the same Company also came up for hearing and an additional argument was advanced. The decision on that argument could alter this position. Considering the arguments advanced, the other petition was partly heard and adjourned for further hearing. Before the matter could be heard the assignment was changed. Parties thereafter moved the learned Chief Justice for placing the matter before this Court. That is how the matter has been heard again on 16th April 1992. This petition and companion petitions where judgment was not signed were also placed on Board. The point had been raised and decided. It pertained to the provisions of the Bombay Money Lenders Act. The contention was that the transaction was a loan by a person who had no license under the aforesaid Act and consequently if a suit had been filed, by virtue of section 10 of the Act, the Court could not have decreed the suit. 10.The additional argument advanced on behalf of the Company is in respect of the contention namely that the transaction being a loan was hit by the provisions of the Bombay Money-Lenders Act, 1946. 10.The additional argument advanced on behalf of the Company is in respect of the contention namely that the transaction being a loan was hit by the provisions of the Bombay Money-Lenders Act, 1946. It is contended that for the purpose of the Act the Company is a money lender. Once it is a money lender it could not have advanced moneys without due license. It is further sought to be contended that in respect of a money lending transaction by a person who is a money lender in the event a suit was filed by virtue of section 10 of the Act no decree could have been passed. It is, therefore contended that it is not just a debt which is due and payable. Once the debt is not due and payable it cannot be said that the Company is justly indebted to the petitioners and consequently the petition should be dismissed. Sub-section (2) of section 2 of the Money-Lenders Act defines business of money lending as business of advancing loans whether in cash or kind and whether or not in connection with or in addition to any other business. Company has been defined under sub-section (4) of section 2 and means a Company as defined in the Companies Act, 1956. Sub-section (6) of section 2 defines interest to include any sum, by whatsoever name called, in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan, but does not include any sum lawfully charged by a moneylender on account of costs, charges or expenses in accordance with the provisions of the Act, or any other law for the time being in force. Loan is defined in section 2(9), it will be essential to reproduce the relevant provisions of the same:-- "(9) "loan" means an advance at interest whether of money or in kind but does not include- (a) a deposit of money or other property in a Government Post Office, Bank or in any other Bank or in a Company or with a Co-operative Society : (b) ..... (c) ..... (d) ..... (cc) .... (d) ..... (d1) ..... (d2) ..... (e) ..... (c) ..... (d) ..... (cc) .... (d) ..... (d1) ..... (d2) ..... (e) ..... (ee) loan to, or by, or deposit with, anybody (being a body not falling under any of the other provisions of this clause), incorporated by any law for the time being in force in the States ; (f) an advance, of any sum exceeding rupees three thousand made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, other than a promissory note: (f-1) ......... (f-2) ........ an advance made bona fide by any person carrying on any business, not having for its primary object the lending of money if such advance is made in the regular course of his business. At the hearing of the petition on 12th February, 1999 it was strenuously sought to be contended on behalf of the Company that the loan granted is an act of money lending. The Company placed reliance on the statement and objects clause at the time the Act was amended to include 2(9)(ee). The Statement of Objects and Reasons set out read that the Central Government had recommended to all States that corporate bodies like the Industrial Finance Corporation, the State Financial Corporation, the Industrial Development Bank of India, the Industrial Credit and Investment Corporation of India, Film Finance Corporation, Agriculture Refinance Corporation, Life Insurance Corporation, which are approved to grant loans or advances under the provision of the statute incorporating them may be exempted from the provisions of the laws regulating the business of money-lending. It was proposed to give effect to this recommendation by amending section 2 of the Bombay Money-Lenders Act, 1946. To this argument petitioners had contended that intercorporate deposits are matters of reality today and if the Statement of Objects and Reasons is seen they cannot be restricted to the Corporation referred to therein, but must also include all companies. I had initially found favour with the said argument when the judgment was dictated on that day. However, in the other petition which was being argued Counsel therein brought to my notice additional material including the meaning of "incorporated by Act" of Parliament as set out in Stroud's Judicial Dictionary, 4th Edition. I had initially found favour with the said argument when the judgment was dictated on that day. However, in the other petition which was being argued Counsel therein brought to my notice additional material including the meaning of "incorporated by Act" of Parliament as set out in Stroud's Judicial Dictionary, 4th Edition. Reference, therefore, needs to be made to that meaning, which reads as under: "A Company "incorporated by the Act of Parliament" means one which "by" an Act is brought into existence does and not include a Company incorporated "under" an "Act"." Based on this submission it was pointed out that there is a clear distinction between a Company incorporated by an Act of Parliament and a Company incorporated under an Act and bearing in mind the objects and reasons clause, section 2(9)(ee) must be read to include only such Corporations or Companies which are incorporated by an Act of Parliament unlike Companies which are incorporated under the Indian Companies Act. To my mind there is merit in that submission. Looking at the definition clauses wherein reference is made to a Company as defined under the Companies Act, the exclusion of deposit in a Company, a loan by an Insurance Corporation or by a bank it is clear what the Legislature had in mind while introducing section 2(9)(ee) were those Corporations or Companies incorporated by an Act. 11.However, after I resumed hearing on 16th April, 1999, learned Counsel for the petitioners pointed out that at any rate the loan as advanced if it be a loan, is excluded from the definition of loan by virtue of section 2(2)(a) being a deposit in a Company or an advance on the basis of Negotiable Instrument and/or at any rate an advance made bona fide by any person carrying on any business not having his primary object of lending of money, if such advance is made in the regular course of his business. My attention was invited to the definition of "advance" as contained in the Law Lexicon, Volume I, 1989 Fourth Revised Enlarged Edition wherein the learned Author Earl-Jowitt in his law Dictionary has given the following meaning to the word "advance" at page 68:-- "Money paid before it is due, a loan. My attention was invited to the definition of "advance" as contained in the Law Lexicon, Volume I, 1989 Fourth Revised Enlarged Edition wherein the learned Author Earl-Jowitt in his law Dictionary has given the following meaning to the word "advance" at page 68:-- "Money paid before it is due, a loan. It depends upon the circumstances of each case and the terms of the contract between the parties whether an advance payment made by one to the other is in the nature of the loan or not. If the advance is repayable it certainly has an element of loan in its composition." Similarly, reliance was placed on the definition of "advances" as contained in Black's Law Dictionary, 6th Edition, wherein it is defined as under :-- "Advances. Moneys paid before or in advance of the proper time of payment; money or commodities furnished on credit; a loan or gift or money advanced to be repaid conditionally. Payments advanced to the owner of property by factor or broker on the price of goods which the latter has in his hands or is to receive for sale." My attention was also invited to judgments of this Court. In the case of (Sitaram Laxminarayan Rathi v. Sitaram Kashiram Koli and others)1, 1984(2) Bom.C.R. 81 the issue was, whether the provisions of the Act would apply in respect of a postdated cheque. A learned Single Judge held, that the loan was admittedly against post dated cheques and as per the provisions of section 2(9)(f) of the Money-Lenders Act any payment made as an advance against cheques was excluded under the provisions of the Money Lenders Act. The next judgment relied on was in the case of (Nandram Kaniram and others v. N.B. Rahatekar)2, 1994(1) Bom.C.R. 28 . The following observations of the learned Single Judge are relevant :-- "Money-lending business always imports a notion of system, repetition and continuity. These elements have been held to be absent in the instant case and I see no perversity in reaching that conclusion." In that case the matter was in second appeal before the learned Single Judge. There were concurrent findings of fact. The learned Judge held, that for a transaction to be a money lending business it must import a notion of system, repetition and continuity. There were concurrent findings of fact. The learned Judge held, that for a transaction to be a money lending business it must import a notion of system, repetition and continuity. My attention was also invited to a judgment of the Apex Court in the case of (Gajanan and others v. Seth Brindaban)3, A.I.R. 1970 S.C. 2007. The Apex Court considered as to when a person could be considered to be a money lender. The Apex Court observed as under :-- "There is a long catena of authorities on the statutes regulating and controlling money lenders in which the expression "money lender" has been so construed as to exclude isolated transaction or transactions of money lending. Vivian Bose, J., while dealing with the Act which concerns us, in (Sitaram Shrawan v. Bajya Parnya)4, A.I.R. 1941 Nag. 177 said: "The word "regular" shows that the plaintiff must have been in the habit of advancing loans to persons as a matter of regular business. If only an isolated act of money lending is shown to the Court it is impossible to state that constitutes a regular course of business. It is an act of business but not necessarily an act done in the regular course of business." On behalf of the Company my attention was invited to the judgment of this Court in (Suleman Haji Ahmed Umer v. Haji Abdulla Haji Rahimtulla)5, 42 Bom.L.R. 971. Indian Limitation Act of 1908 provided for separate periods of limitation for money lent and money deposited. It is in that context this Court considered the expression loan or deposit. That, however, may not be very relevant for the purpose of the present case where the loan means has been defined as an advance at interest, but excludes a deposit in a Company. In other words the transaction if it is an advance at interest would be a loan. A deposit carrying interest would also be a loan but it is excluded by virtue of section 2(9)(a). 12.Having said so, learned Counsel has drawn my attention to the averments in the petition. In paragraph (6) (a), (b), (c), (d), (e), (f), (g), and (h), reference is made to the postdated cheques issued by the Company. This naturally is for the purpose to show that the advance was made on the basis of an negotiable instrument. A cheque would be a negotiable instrument. In paragraph (6) (a), (b), (c), (d), (e), (f), (g), and (h), reference is made to the postdated cheques issued by the Company. This naturally is for the purpose to show that the advance was made on the basis of an negotiable instrument. A cheque would be a negotiable instrument. From a consideration of the above it will therefore, be clear that though the petitioners would not be excluded by section 2(9)(ee) yet the transaction would be excluded by virtue of section 2(9)(a) and/or 2(9)(f). There is also no material on record that the petitioners are regularly carrying on business of money-lending. In other words there is no regularity, there is no continuity and there is no notion of system of repetition. Reference may now be made to paragraphs. It can be seen from the said paragraph that it is not the primary object of the Company to carry on business of money lending. The said transaction would, therefore, be excluded from the definition of moneylending by virtue of section 2(9)(f). Such an interpretation must also follow to protect thousands of individuals who deposit their life savings with Companies. To my mind, therefore, the said transaction would not be hit by the provisions of Bombay Money Lenders Act. 13.It was urged that the petition should be rejected as the debt is not legally recoverable. It was contended that if no relief could be granted if a suit was filed then the Company petition would not be maintainable. Learned Counsel has relied upon a judgement of this Court in (Dabholkar Enterprises v. Padma Alloy Castings Pvt. Ltd.)6, 1994 Mh.L.J. 1715. In that case a petition for winding up was filed by a partnership which was not registered. A learned Single Judge of this Court held that the petition was not maintainable as an unregistered partnership could not have filed a suit for recovery of money. Reliance was also placed in the case of (M/s Baba Finance Corporation v. Mohd. Nayeem and another)7, 1997 All.M.R.(Cri.) Journal 1. In that case a Single Judge of the Andhra Pradesh High Court was considering the question on the complaint filed by a money lender doing moneylending business without license. The learned Single Judge I held that the cheque must relate to a debt or liability enforceable in law. Nayeem and another)7, 1997 All.M.R.(Cri.) Journal 1. In that case a Single Judge of the Andhra Pradesh High Court was considering the question on the complaint filed by a money lender doing moneylending business without license. The learned Single Judge I held that the cheque must relate to a debt or liability enforceable in law. I find no difficulty in so also construing section 434(1)(c) to held that a petition for winding up, under section 433(e) read with section 434(1)(a) of the Companies Act would only lie only if the debt was legally recoverable. The fact that the present is a Company petition and under the Bombay Money tenders Act no relief will be granted if the suit is filed would also make the debt unenforceable under the Companies Act. It is no doubt true that a company petition is not a petition for recovery of dues from a Company. Nevertheless to wind up a Company under section 434(1)(a) the amount must be a debt which is legally recoverable. If the recovery itself is barred under section 10 of the Bombay Money Lenders Act, I am of the opinion, therefore, that in such a case the petition filed on the ground that the Company is unable to pay such a debt, would also not be maintainable. A consistent view has been taken that in respect of time barred debts, no petition would be maintainable. This is because a time barred debt is not legally recoverable. The same reasoning must also be adopted in the present case. However, in the instant case as I have held the transaction would be excluded from the definition of "loan" the petition cannot be dismissed on that count. 14.My attention has also been invited to the order dated 21st December, 1998 in Company Petition No. 48 of 1998, wherein in respect of the present petitioners an order admitting the petition had been passed against another group Company. I need not go into that aspect of the judgement as independently in the facts of the presents case I have held that the petitioners have established that the Company is justly indebted to the petitioners. In the light of that the following order:- (i) The Company to pay or deposit Rs. 2,54,54,349,31, paise within 8 weeks from today. On payment or deposit the petition to stand dismissed. Liberty to the petitioners to withdraw the amount if deposited. In the light of that the following order:- (i) The Company to pay or deposit Rs. 2,54,54,349,31, paise within 8 weeks from today. On payment or deposit the petition to stand dismissed. Liberty to the petitioners to withdraw the amount if deposited. (ii) On failure to pay or deposit the petition to stand admitted. Liberty to the petitioners to apply for further directions. Company petition stands disposed of accordingly. Petition allowed. *****