Jagriti Plastics Limited vs Adhunik Packagers (P) Ltd.

Deepak Gupta, J.—This Appeal u/s 483 of the Companies Act, 1956 (hereinafter referred to as the Act) is directed against the judgment dated 26.8.2008 passed by a learned Company Judge in Company Petition No. 9 of 2007 whereby he dismissed the petition for winding up filed by the Appellant u/s 433(e) of the Act on the ground that the Respondent Company (hereinafter referred to as the Company) was unable to pay its debts.

According to the Appellant it is a Company engaged in the manufacture and sales of chemicals etc. The Respondent Company used to purchase various types of chemicals from it. According to the Appellant as per the statement of accounts for the period 1.4.2006 to 31.3.2007 the Respondent owed a sum of Rs. 41,15,758/- as on 22.11.1986. A registered notice was sent to the Respondent Company on 16.5.2007 calling upon them to pay this amount but they did not do so. The Respondent Company did not respond to the notice. Thereafter, a Company Petition was filed and it was contended that an amount of Rs. 41,15,758/- was due to the Petitioner from the Respondent Company. It was further alleged that since the Respondent had not filed reply to the notice it had virtually admitted the claim of the Appellant.

The Respondent Company contested the petition on various grounds. One of the grounds taken was that the goods which were admittedly supplied to M/s. Kolor Printers have also been depicted as the amount owned by the Respondent Company to the Petitioner. The Respondents contended that as per the balance sheets prepared by them nothing is due to the Appellant Company. The learned Company Judge held that the Respondent had raised a bonafide dispute and accordingly dismissed the petition giving liberty to the Appellant to file a suit for recovery of the amount.

Aggrieved by the said judgment of the learned Single Judge, the Appellant has filed the present appeal.

We have heard Sh.K.D. Sood, learned Counsel for the Appellant and Sh. Rahul Mahajan, learned Counsel for the Respondent. On behalf of the Appellant the main reliance is placed on the duly audited balance sheets of the Respondent Company wherein a sum of Rs. 41,42,758/- was shown payable to the Appellant as on 31.3.2003. This included the amount on account of the goods supplied to M/s. Kolor Printers which is stated to be a sister concern of the Respondent Company. Reliance is also placed on cheques dated 14.2.2005 purportedly issued on behalf of the Respondent Company for Rs. one lakh each which have been dishonoured and cash deposits made in December, 2006.

While hearing the matter we had perused the record and found that the Respondent Company in its audited balance sheet for the year 2002-03 had shown the Appellant to be a sundry creditor as on 31.3.2003 and the amount shown payable to Appellant was Rs. 41,42,758/-. We had asked Sh. Rahul Mahajan, learned Counsel for the Respondent as to how this amount had been shown to have been wiped out in the next financial year. The only explanation which has been given is that this amount was shown as income in the next year, tax was paid on it and therefore this amount was shown to be no longer payable to the Appellant.

We are dealing here with two Companies. The Respondent Company in its own balance sheet as on 31.3.2003 had clearly admitted its liability to pay a sum of Rs. 41,42,758/- to the Appellant Company. Once it had admitted this amount it should have led some evidence or placed on record some material to show that this amount had been paid. This was never done. On the other hand a plea was raised that part of this amount related to its sister concern M/s. Kolor Printers and the Respondent Company was not liable to pay the same. Even if the liability of the sister concern i.e. M/s. Kolor Printers is excluded then there was some liability on behalf of the Respondent Adhunik Packagers. Therefore, in our view the dispute raised to this extent was not bonafide.

Faced with this situation Sh. Rahul Mahajan, learned Counsel urged that the claim of the Appellant is miserably time barred and no Company can be wound up in respect of a time barred debt. This objection had not been taken before the learned Single Judge. Therefore, on 14.10.2009 we had passed the following order:

One of the questions which arise for determination is whether the claim of the Appellant/Petitioner is within limitation. Mr. K.D. Sood submits that he has not been given an opportunity to place on record any evidence in this regard since this question was not raised before the learned Company Judge. In a winding up petition, this Court will not decide the question whether the suit is barred by limitation or not but only has to decide whether there are disputed questions involved and the Petitioner should be directed to file a Civil Suit. The Appellant/Petitioner if he so desires, may within next four weeks place on record any material to show that its claim is within limitation. List on 17th November, 2009.

In response to this order the Appellant Company filed an affidavit of Sh. Sanju Aggarwal. Along with this affidavit a copy of the criminal complaint has been filed which shows that a complaint was filed in respect of two bounced cheques of Rs. one lakh each purported to have been issued on 14.2.2005. This complaint was filed against the Respondent Company and various other persons. However, it appears that only Sh. Yogesh Kumar contested the complaint and this complaint was compromised on 16.3.1999 on the statement of Sh. Yogesh Kumar which reads as follows:

As per balance sheet of accused No. 1, a sum of Rs. 41,42,758/- was payable by the accused No. 1 to the complainant as on 31.3.2003 and the cheques in question were issued by the accused No. 1 in discharge of its running liability and the same was issued prior to my resignation from the Board of Directors of accused No. 1 i.e. 31.3.2003, which were given as security towards the running account and which were dishonoured on presentation. I offer a sum of Rs. 2 lacs to the complainant in lieu of the aforesaid dishonoured cheques.

This statement itself clearly shows that the cheques were issued not in the year 2005 but prior to 31.3.2003 since Sh. Yogesh Kumar ceased to be a Director of the Respondent Company on 31.3.2003. This again shows that the limitation would start latest from 31.3.2003 when the Respondent Adhunik Packagers Pvt. Ltd. in its own balance sheet admitted that a sum of Rs. 41,42,758/- was payable to the Appellant Company. The petition in this case was filed on 25th August, 2007 and prima facie appears to be time barred. The Appellant relies upon certain cash deposits of Rs. 15,000/- and Rs. 12,000/- having been made on 10.12.2006 and 20.12.2006 to extend the period of limitation. The Respondent Company denies that any payment in cash was made. According to them these entries are wrong and baseless.

This Court in a petition for winding up is not going to decide the question as to whether the claim is time barred or not. However, it cannot be said that the defence raised that the claim is time barred is a frivolous or mala fide. The only clear-cut admission is in the accounts ending on 31.3.2003. The bounced cheques of 2005 will not extend limitation since it is apparent that they were issued prior to 31.3.2003 and signed by Sh. Yogesh Kumar who ceased to be a Director on 31.3.2003. The question whether cash deposits of Rs. 15,000/- and Rs. 12,000/- have been made on 10.12.2006 and 20.12.2006 is a disputed question which cannot be decided in a Company Petition. Therefore, on this ground alone we find no merit in the appeal which is accordingly rejected. No costs.