The petition was filed in August this year and is pending hearing in the Bombay high court.

Koch Rajes had supplied compact discs to Magnasound in 1997. The petition states that "Magnasound is indebted to the Petitioners for the amount of Rs 53,08,748.46 together with interest thereon at the rate of 18 per cent per annum." The petition also states that "by a writing dated 26/12/97 the Company inter alia confirmed that a sum of Rs 93,61,000 was due and payable by the Company to the Petitioner"

The petition states that Magnasound agreed to pay the said amount from February 1998 at Rs 15 lakhs per month. Koch Rajes has claimed that Magnasound has committed defaults on this account. The petition states "the Company has, despite repeated reminders and demands, failed and neglected to pay the Petitioners said dues or any part thereof. The Company has on some pretext or the other postponed payment."

Koch Rajes sent a Notice of Demand dated 13/6/2000 under Section 434 of the Companies Act, 1956. The petition goes on to say that "the petitioners have taken inspection of the records of the said Company with the Registrar of Companies and have learnt that the Respondents have failed to file the upto date balance sheets with the Registrar of Companies or the Statement under Section 220 of the Companies Act." The annual returns, as per the petition, have been filed only upto 30/9/93. Koch Rajes state in their petition that "the said Company is unable to meet the current demands and/or pay its debts as and when due and payable and is wholly in insolvent circumstances and has been incurring heavy losses and liabilities." The petition further states that the fixed and floating assets of the Company are mortgaged, hypothecated and secured for repayment of heavy borrowings. Besides, these assets as per the petition, "are not sufficient to pay off the liabilities of the Company." "In the circumstances, the saidCompany Magnasound is liable to be wound up," the petition added. The petitioner has also sought the appointment of a liquidator on the respondent Company, Magnasound.

When contacted, Magnasound chairman and managing director, Shashi Gopal said, "Magnasound has sent a letter dated 13/6/2000 stating that the amount under dispute is Rs 48 lakh which has been agreed by Koch Rajes." He said the allegations were "baseless" and had no truth whatsoever. Koch Rajes when contacted by The Financial Express said the matter was "sub-judice" and could not be discussed.