Supporting a repayment application filed before the Calcutta high court by Mumbai-based Capsulation Services Ltd, counsel for Shaw Wallace said that it will fall back on its own repayment scheme filed under Section 391 of the Companies Act if the court does not clear Capsulation's plan.

If the creditor's application is approved, Shaw Wallace will be able to ward off the 95-odd petitions filed for its winding up.

Some creditors supported Capsulation's application, but others like Hindustan Development Corp, Kirloskar Finance & Investment Ltd and Peerless Abasan Finance Ltd opposed it.The next hearing in the case is scheduled for February 2. Shaw Wallace had availed itself of bill discounting facilities and taken inter-corporate deposits for which it owes Rs 233 crore to 192-odd creditors - secured as well as unsecured. The company's first repayment scheme failed before a division bench of the Calcutta high court and then at Supreme Court last year. Following this, it filed another scheme before the Calcutta high court.

Capsulation, in its application for repayment, has pointed out that Shaw Wallace has already deposited about Rs 105 crore with the two court-appointed special officers. This amount is enough to pay off the principal owed to the unsecured creditors - the ones behind the winding-up moves.According to counsel PK Mullick of Capsulation Services, Shaw Wallace owes a total of Rs 67 crore by way of principal to the unsecured creditors.At Wednesday's hearing before Justice Ronojit Kumar Mitra, Shaw Wallace's counsel Anil Divan said: "The application by my learned friend [counsel PK Mullick of Capsulation Services] is worth considering and it puts an end to the winding up". HDC's counsel Sudipta Sarkar objected to this, and said that Shaw Wallace should decide whether to support Capsulation's scheme or its own, since both cannot be supported at the same time.

Sarkar pointed out that the money already deposited by the company is for repayment under the scheme. Divan replied that Shaw Wallace's first choice will be to support Capsulation's scheme, failing which it can fall back on its own.In support of the creditor's application, Divan told the court that if a 10 or 12 per cent interest rate is considered on the dues till October 17, 1996, the total outstanding (principal and interest) aggregates to around Rs 126 crore and Rs 131 crore respectively, and most of this can be met from the Rs 105 crore deposit.