Rameshwar Lal Govindram vs AVR Texfabs (P.) Ltd.

Ajay Rastogi, J.—Instant company petition has been filed under sections 433(e) & 434 of Companies Act, 1956 (''Co. Act'') seeking winding up of M/s AVR Texfabs (P.) Ltd. (''respondent-Co.'').

M/s. Rameshwarlal Govindram (petitioner) is a proprietary-Firm duly engaged in the trade of iron goods and its Proprietor (Kishanlal Agarwal) is residing at Madanganj-Kishangarh (Ajmer). Petitioner-Firm supplied iron goods from time to time to respondent-Co., and as per statements of accounts against good supplied, a sum of Rs. 8,35,208 (Rupees eight lakhs thirty five thousand two hundred eight only) was outstanding and recoverable as on 30-9-2008 against M/s. AVR Texfabs (P.) Ltd. (respondent-Co.) which is a private limited Co., incorporated in August, 2005, having capital of Rs. two crores twenty five lakhs divided into 22,50,000 equity shares and amount of paid up equity capital is of Rs. one crore eighty nine thousand only. Its Directors are both, husband and wife, and as alleged, time and again, requests were sent to respondent-Co., and its Directors to settle the accounts but both the Directors have only informed that payment of such outstanding dues would be made. However, written request was sent by registered post on 15-10-2008 to respondent-Co., while endorsing its copy to respondents-2 & 3 (Directors) but these written letters were returned back with an endorsement made by postman that the addressee refused to accept; and finally when no response came forward, petitioner-Firm sent legal notice dated 14-11-2008 (Ann.3) through registered post (Ann.4) to respondent-Co. under sections 433 & 434 of Co. Act, and its Directors (respondents-2 & 3) asking them to make payment of outstanding dues as on 30-9-2008 to the tune of Rs. eight lakhs thirty five thousand two hundred eight, along with interest payable with effect from 1-10-2008 till actual payment. Despite legal notice being served, neither any reply thereto was sent by respondent-Co. nor payment of outstanding dues as per legal notice was made. Hence instant company petition.

Notices were issued by the court vide order dated 20-2-2009, pursuant to which, reply has been filed by respondent-Co., wherein this fact has not been controverted that they have business dealings for trading of iron goods with petitioner-Firm and as per its ledger account as on 1-4-2008, opening balance was of Rs. 7,18,963 as Credit and against which, two entries have been shown as debit each of Rs. one lakh as cash payment being made on 28-4-2008 & 15-5-2008; besides entry of Rs. two lakhs as payment through cheque dated 24-6-2008 drawn on Bank of Baroda; and for balance, claim is shown to have been settled of Rs. 3,18,963.

It is curiously enough that no documentary evidence as to how claim of Rs. 3,18,963 was settled and no receipt in regard to alleged cash payment entry (supra) have been placed on record along with reply; despite the plea of defence taken by respondent-Co. being controverted & disputed by petitioner-Firm that neither cash payment was made nor any settlement has ever been arrived at between the parties. Total amount of Rs. 5,18,963 as on 24-6-2008 has been prima facie remained due as against respondent-Co., being payable to petitioner-Firm.

However, affidavit has been placed on record to show bona fide that in presence of Muzaffar Hussain (civil contractor), Om Prakash Agarwal (owner of M/s. Fulera Diamon Kishangarh) and Ram Niwas, Accountant of respondent-Co., settlement was made and the petitioner had agreed to deduct Rs. 3,18,963 as against sub-standard goods supplied.

On the contrary, Muzaffar Hussain (civil contractor) has filed additional affidavit to show that no such affidavit was sworn by him and he had never signed any affidavit reference of which has been made by respondent-Co., in their reply and that apart, nothing has come on record by which it could prima facie reveal that there had ever been any correspondence having taken place for the goods being sub-standard supplied in between the years 2005 to 2007, in regard to which also, respondent-Co., at any point had never disputed nor raised any grievance of the goods being substandard; inasmuch as even as per their own ledger A/c entries maintained of petitioner-Firm from 2-4-2008, there has been credit of Rs. 7,18,963 showing as opening balance against which, payment of Rs. two lakhs through cheque drawn on Bank of Baroda was shown as debited on 24-6-2008.

Be that as it may, there is no prima facie evidence by which it could justify that there was bona fide dispute regarding payment being made in cash or claim being settled, in absence of documentary evidence in the form of receipt of cash payment or in regard to the balance amount being settled in the presence of three persons and even from whose affidavit it does not disclose the date on which all the three named persons had ever met and what transpired in between the parties to the alleged settlement and which appears to be an after thought; rather this gives an indication for arriving at the conclusion that there is no dispute regarding amount of outstanding dues as is evident from ledger account.

There cannot be a dispute that a winding up petition is maintainable if the Company fails to pay its debt and the relief as prayed for in the winding up petition can be refused if the debt is bona fidely disputed and the defence of the Co. is in good faith and its defence is likely to succeed in point of law while the Co. adduces prima facie proof of facts on which its defence depends.

From the material on record, respondent-company has miserably failed to prima facie establish his bona fide pleaded in defence in the reply to the winding up petition. As observed earlier, the defence now being raised for the first time only in the reply to the winding up petition at hand is prima facie an after thought being raked up to defeat the claim of petitioner-Co., and the Respondent-company, despite persistent demands through repeated letters, besides legal notice sent through registered post, has neglected to pay outstanding dues, which prima facie establishes its inability to pay its debt. However, it would be relevant to observe that after the reply being filed by respondents at one stage, this court considered its proper that such dispute could be resolved through mediation, as well but could not be finally resolved and the matter was taken up.

For the reasons stated (supra), this Court holds that a sum of Rs. 5,18,963 is due as against respondent-company which they failed to pay in spite of demands. This court, therefore, directs the respondents to pay the amount, ibid., within one month, failing which instant company petition will be advertised in conformity with rule 24 of Companies (Court) Rules, by publication in daily newspapers (1) Rajasthan Patrika & (2) Times of India (Delhi Edn.) and so also in Rajasthan Government Gazette.