JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---By and under a cheque dated 7th March, 1995, drawn in the State Bank of India, the petitioner placed an Inter Corporate Deposit (I.C.D.) with the respondent company for a period of 90 days. The terms and conditions governing the I.C.D. were recorded by the petitioner by a letter dated 8th March, 1995 and it has been stated in para 6 of the company petition that these terms were accepted by the company by affixing its stamp on the letter. The relevant terms and conditions in the letter dated 8th March, 1995 provided that interest for the period 9th March, 1995 until 6th June, 1995 would be payable on a quarterly basis and on maturity the principal amount of Rs. 25 lakhs would be remitted to the petitioner with interest at the rate of 20% per annum on 7th June, 1995. Clause 3 of the terms and conditions provided as follows : "3. The above Inter Corporate Deposit along with interest thereon shall not be subject to lien of any kind and no adjustment of principal or interest amount can be made with other debts or claims which we may owe you." In Clause 5, it was stipulated that the outstanding amounts shall bear interest at 24% per annum in the event of default and in Clause 7, it was stated that the acceptance of the cheque drawn by the petitioner would tantamount to the respondent agreeing to the terms and conditions governing the I.C.D. as set out in the letter. On 7th June, 1995, an amount of Rs. 26,25,000/- inclusive of interest became due and payable. The respondent-company having failed to repay the amount, a notice dated 17th June 1997 was issued on behalf of the petitioner by its Advocate calling upon the respondent to pay an amount of Rs. 47,95,002/- inclusive of interest or else to face a proceeding for winding up under sections 433/434 of the Companies Act, 1956. This notice was replied to on 7th July, 1977 by the company's Advocates stating that instructions were being obtained from the company and in the meantime, all the allegations were denied. It is common ground, that no reply thereafter was submitted to the statutory notice of winding up dated 17th June, 1997 and there has, in the circumstances, been no reply on merits denying either the receipt of the amount of Rs. It is common ground, that no reply thereafter was submitted to the statutory notice of winding up dated 17th June, 1997 and there has, in the circumstances, been no reply on merits denying either the receipt of the amount of Rs. 25 lakhs as an I.C.D. or the liability of the company to repay the amount to the petitioner. Significantly, there has been no denial of the terms and conditions governing the I.C.D, which were adverted to in the statutory notice of winding up, including the reiteration that the I.C.D. was liable to be refunded by the company without being subject to a lien of any kind or any adjustment of principal or interest with any other debt or claim which the petitioner may owe to the company. On 26th December, 1997, second notice under sections 433/434 was addressed by the Advocate of the petitioner and to the notice a reply came to be addressed on 16th January, 1998 by the company. In its reply, the company stated that in response to the notice of the petitioner, a guarantor of the company had held a meeting with a representative of the petitioner and "having regard to the on account payment made on that day, towards your over all account, it was agreed that the proposal would be submitted to you in the next two months in respect of settlement of the outstanding dues". The company, it must be noticed, also stated that it was agreed that certain claims raised by the petitioner were subject to final reconciliation and were thereby not valid and the proposed settlement should reflect the correct position. 2. The petition for winding up has been instituted on the basis that there is a debt due and payable by the respondent to the company and that despite receipt of the statutory notice of winding up, the company has failed to repay the amount of the I.C.D. of Rs. 25 lakhs together with interest accrued thereon as agreed under the underlying terms and conditions of the contract between the parties. It must be noted at the outset, that in the correspondence which has been exchanged between the parties and which is annexed to the company petition, the company has not denied either the receipt of the I.C.D. in the amount of Rs. It must be noted at the outset, that in the correspondence which has been exchanged between the parties and which is annexed to the company petition, the company has not denied either the receipt of the I.C.D. in the amount of Rs. 25 lakhs, the underlying terms and conditions upon which the petitioner placed an I.C.D. with the company and the obligation of the company to refund the dues of the petitioner with interest accrued thereon. As noticed earlier, the first reply dated 7th July, 1997 on behalf of the company was a formal denial, as Solicitors often make, pending a detailed reply which in the present case was never sent. The tenor of the second reply dated 16th January, 1998 was that the company was liable to repay the dues of the petitioner. 3. In the affidavit in reply which has been filed on behalf of the company to the petition the case which has been sought to be made out in defence is that the petitioner is the promoter of a company known as "J.K. Udaipur Udyog Limited" and that the said company is its wholly owned subsidiary. According to the respondent-company, the I.C.D. was a finance arrangement to enable the company to subscribe to the issue of partly convertible debentures of the J.K. Udaipur Udyog Limited. The respondent-company as co-manager to the public issue had also under-written a part of the issue and according to the respondent, it accepted this deposit of Rs. 25 lakhs only to accommodate the J.K. Group of companies which was trying to 'save' the public issue of Partly Convertible Debentures of J.K. Udaipur Udyog Limited which was undersubscribed. In para 3 of the reply, it has been stated that the petitioner has "over simplified the matter" by only stating that they had placed an Inter Corporate Deposit of Rs. 25 lakhs with the respondent without stating as to why this amount has been invested. According to the respondent, one of its promoter directors, Shri Kailash Mehta was closely associated with one S.C. Jain who was the Group Financial Advisor of the J.K. Group of Companies. Essentially the defence is that the issue of Partly Convertible Debentures was undersubscribed and that in order to save that issue, Kailash Mehta of the respondent was approached by S.C. Jain of the petitioner to subscribe for the Partly Convertible Debentures. Essentially the defence is that the issue of Partly Convertible Debentures was undersubscribed and that in order to save that issue, Kailash Mehta of the respondent was approached by S.C. Jain of the petitioner to subscribe for the Partly Convertible Debentures. Accordingly, it was agreed that the company would subscribe to 1,50,000 P.C.Ds. each of Rs. 150/- and in order to finance the said application for allotment, the Singhanias through their Group of Companies would advance a sum of Rs. 50 lakhs to the respondent in the garb of an inter corporate deposit. After the allotment of 1,50,000/- P.C.Ds. the company would sell 3 lakhs equity shares which became available as a result of the conversion of the P.C.Ds. in the market and reimburse the amount which had been advanced by the J.K. Group and which had been placed as an Inter Corporate Deposit. In the circumstances, it has been stated that the respondent made an application for 1,50,000 P.C.Ds. and paid the allotment money aggregating to Rs. 63 lakhs out of which 1 lakh P.C.Ds. were applied for in the name of Mr. Kailash Mehta of the respondent. It has been stated that before the lodgement of these applications with the bankers to the issue, the petitioner and an other J.K. Group Company, Pranav Investments Ltd. advanced an amount of Rs. 25 lakhs each in the garb of an Inter Corporate Deposit. 4. This is then in substance, the nature of defence. In determining as to whether there is in fact a bona fide dispute raised on the basis of the defence contained in the reply of the respondent company, regard must be had to the fact that the respondent does not deny the receipt of Rs. 25 lakh from the petitioner. The respondent has equally not denied that the moneys were received as an Inter Corporate deposit under the terms and conditions stipulated by the letter of the petitioner dated 8th March, 1995. The defence then, is that though the moneys were advanced as an Inter Corporate Deposit, the purpose of doing this was to enable the respondent to subscribe to the public issue of the petitioner of Partly Convertible Debentures which according to the respondent had been heavily undersubscribed to the extent of 40 to 50%. The defence then, is that though the moneys were advanced as an Inter Corporate Deposit, the purpose of doing this was to enable the respondent to subscribe to the public issue of the petitioner of Partly Convertible Debentures which according to the respondent had been heavily undersubscribed to the extent of 40 to 50%. According to the respondent, in pursuance of this arrangement, the petitioner and another group company, Pranav Investments Ltd. deposited Rs 25 lakhs each with the respondent and the respondents subscribed to 1,50,000 partly convertible debentures. According to the respondents, after the Partly Convertible Debentures were converted into equity shares, the shares would be sold in the open market upon which, the petitioner would be repaid the amount of deposit. This in my view, does not constitute a valid or bona fide defence for a number of reasons. Firstly, the defence which is sought to be made out in the affidavit in reply does not find any place in either of the two letters addressed on behalf of the respondent to the statutory notice of winding up of 17th June, 1997 and 26th December, 1997. The petitioner in those two notices was demanding the repayment of its dues along with interest and if according to the respondent the amounts deposited by the petitioner were not an Inter Corporate Deposit but, really an arrangement of finance to enable the respondent to subscribe to the public issue, there is no mention of any such arrangement in the replies of the respondent. Secondly, it is necessary to take note of the fact that apart from the petitioner, another group company, Pranav Investment Ltd., had also placed an Inter Corporation deposit of Rs. 25 lakhs with the respondent. According to the respondent, this is also part of the same finance arrangement. The defence of the respondent is however, completely belied by the fact that by the letter dated 4th June 1996, the respondent wrote to Pranav Investment Ltd. regarding its outstanding dues and confirming that its balance will be paid in the month of June, 1996. Thereafter, on 10th January, 1998, a part payment of Rs 1 lakh was made to the said company and it is now common ground between the learned Counsel that Rs. Thereafter, on 10th January, 1998, a part payment of Rs 1 lakh was made to the said company and it is now common ground between the learned Counsel that Rs. 21 lakhs came to be paid by the respondent to Pranav Investments Ltd. The explanation of the respondent in para 5(m) of the reply that these moneys were paid since Pranav Investments Ltd. was under the supervision of R.B.I. is specious and does not merit consideration. If as contended by the respondent Rs. 25 lakhs each received from the petitioner and Pranav Investment Ltd. was not an I.C.D, but part of a finance arrangement for subscription to the issue of P.C.Ds., there is no cogent explanation as to why a substantial part of the deposit has been repaid to Pranav. Thirdly, the respondent contends that the finance arrangement was arrived at because the public issue of Partly Convertible Debentures of J.K. Udaipur Udyog Ltd." was heavily undersubscribed to the extent of 40 to 50%" and this averment has been made in para 2 of the reply. The petitioner in its rejoinder has denied this and has stated that the public issue opened for subscription on 21st February, 1995 and closed on its earliest closure on 25th February, 1995. The petitioner has stated in its rejoinder that the issue was fully subscribed. According to the petitioner, the respondent-company on 24th February, 1995 and one of its Directors, Kailash Mehta on 25th February, 1995 submitted applications for 50,000 P.C.Ds. and 1 lakh P.C.Ds. respectively and submitted their respective cheques dated 24th February 1995 for Rs. 21 lakhs and 25th February, 1995 for Rs. 42 lakhs. The I.C.D. of Rs. 25 lakhs was placed in deposit by the petitioner much later on 8th March, 1995 and the I.C.D. by Pranav Investments Ltd. was placed on 8th April, 1995. 5. The petitioner has placed an I.C.D. and in my view. It is entitled to the return of the amount together with interest as agreed upon by the respondent. Essentially, the defence of the respondent is that the Court should ignore the terms and conditions governing the placement of the deposit which were reduced to writing on the supposed plea that this was merely an arrangement for providing finance. I do not find that the defence is bona fide or capable of acceptance by the Court even in the petition for winding up. 6. I do not find that the defence is bona fide or capable of acceptance by the Court even in the petition for winding up. 6. The I.C.D. became due for payment on 7th June, 1995. On 16th January, 1998, which was within a period of three years, the respondent company acknowledged that it would within the next two months submit a proposal "in respect of the settlement of the outstanding dues" (emphasis supplied). The company petition has been filed on 1st July, 1999. There is, therefore, no basis in the plea of limitation. 7. Finally it must be recorded that it was sought to be contended by a further affidavit dated 28th February, 2001 of the respondent that the Company Petition has not been verified by a duly authorised representative within the meaning of Order 29, Rule 1 of the Code of Civil Procedure, 1908. There is absolutely no merit in this contention since the General Power of Attorney, a certified true copy of which has been appended to the Company Petition together with the resolution of the Committee of Directors constitute a sufficient authorization for the filing of the petition by the person concerned who has verified and declared the petition. 8. Under Clause 5 of the letter dated 8th March, 1995 (Exhibit a), the petitioner is entitled to interest at the rate of 24% per annum on the amount in default. The I.C.D. carried interest at 20% even during the term of deposit. In these circumstances, the petitioner is entitled to a contractual claim for interest. In the notice of winding up dated 26th December, 1997, a total claim of Rs. 55,81,060/- was made. The petitioner has been deprived of the use of moneys for nearly 5 years. A conditional order for the deposit of the principal sum and some payment towards interest is, therefore, called for. In the circumstances, it would be appropriate and proper to pass a conditional order directing the respondent to deposit in this Court an amount of Rs. 40,00,000/- as claimed in the notice of winding up dated 26th December, 1997. The respondent shall do so within a period of 4 weeks from today. In the circumstances, it would be appropriate and proper to pass a conditional order directing the respondent to deposit in this Court an amount of Rs. 40,00,000/- as claimed in the notice of winding up dated 26th December, 1997. The respondent shall do so within a period of 4 weeks from today. The petitioner would be at liberty to file a suit for the recovery of the amount due and payable under the I.C.D. together with interest and the amount deposited by the respondent shall lie to the credit of the suit. On the request of the learned Counsel for the respondent, it is clarified that all defences of the respondent, including the defence of limitation are left open to be urged in the suit. In the event of the respondent failing to deposit the aforesaid amount, the company petition shall stand admitted and be liable to be advertised. In that event, the petition to be advertised in Free Press Journal, Navshakti and Maharashtra Government Gazette. The petitioners to deposit a sum of Rs. 2,000/- with the Prothonotary Senior Master within a period of four weeks from default, towards publication charges. 9. In the event of the amount being deposited, the Prothonotary and Senior Master to invest it in any fixed deposit of a Nationalised Bank subject to such further orders as may be passed in the suit to be instituted by the petitioner. Certified copy expedited. Order accordingly. -----