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Judgment
K.M. Thaker, J.—When the petition is called out and taken up for hearing Mr. Dhaval Shah, learned advocate for the petitioner is not present. On previous occasion i.e. on 9.7.2013 below mentioned order was passed after hearing the learned advocates for the contesting parties.
The respondents has, in reply affidavit, admitted liability to the tune of Rs. 2,61,882/. However, despite such admission as back as on 5.4.2013 the respondent has until now not made the said payment to the petitioner. Therefore, so as to enable the respondent to establish its claim that the respondent company is not unable to discharge its debt and/or that it is not neglecting to make the payment even after admitting the dues, time until 11.7.2013 is granted. After ascertaining as to whether the said amount has been paid or not, an appropriate order will be passed on 11.7.2013.
Mr. Godiawala, learned advocate for the respondent company submitted that in view of and in compliance of the order dated 9.7.2013 the respondent company has already paid Rs. 2,61,882/- (being admitted liability towards petitioner) within time limit prescribed by the Court.
Since Mr. Dhaval Shah, learned advocate for the petitioner is not present, there is no objection or dispute against the said declaration and submission made by learned advocate for the respondent.
3.1 Therefore, present order is passed subject to any objection by the petitioner against the said statement made by learned advocate for the respondent on behalf of the respondent company.
Now, the petition and the relief prayed for by the petitioner are required to be considered in light of the above mentioned action of the respondent company viz. admitted liability has been paid/discharged by the respondent company.
4.1 So far as the case of the petitioner is concerned, the petitioner has claimed that in or about May 2011 the respondent company had approached the petitioner for the supply of Frequency Inverter (hereinafter referred to as "goods") for manufacturing activity of the respondent company.
4.2 It is claimed that pursuant to the orders, the petitioner sold, supplied and delivered the goods to the respondent company.
4.3 The said goods were sold, supplied and delivered as per requirements by the respondent company at the respondent company''s address at Block No. 104-105, Shiv Nagar Industrial Estate, Tantithaliya, Kadodara, Surat.
4.4 It is claimed that the goods were sold, delivered and duly supplied to the respondent company on time and without any dispute whatsoever as to the quality, quantity or price thereof and the respondent company accepted the goods and also utilized the same.
4.5 It is also claimed that invoices were duly accepted by the respondent company without any protest or dispute whatsoever about any aspect related to the said transaction including quality of goods and/or time of delivery or any other aspect.
4.6 The details of the said invoices are as under:-
4.7 It is claimed that the respondent company had made full payment to the petitioner for invoice dated 27.05.2012 for which the petitioner has given due credit to the respondent company. However, for the invoice dated 3.8.2012 for Rs. 4,31,122/-(Rupees Four Lacs Thirty One Thousand One Hundred Twenty Two only) the respondent company did not make any payment.
4.8 It is also claimed that after May 2011 the respondent company continued to place orders for delivery of goods which also were duly supplied on time and the respondent accepted and used the goods without any dispute whatsoever as to the quality, quantity or price thereof.
4.9 It is claimed that the goods supplied to the respondent company were as per the orders and requirements of the respondent company and the invoices raised by the petitioner upon the respondent company were duly received and acknowledged by the respondent company without any protest in the normal course of business.
4.10 It is further claimed by the petitioner that having supplied the goods as sold, supplied and delivered by the petitioner, the respondent company is bound and liable to make payment of the outstanding dues under the above referred invoices.
Thus, the petitioner has taken out present petition claiming that the respondent company is unable to discharge its debt.
5.1 The said allegation is made on the premise that the respondent company has failed or neglected to pay a sum of Rs. 4,31,122/- being its debt towards petitioner company and that the said amount has not been paid to the petitioner despite repeated requests and service of the statutory notice dated 12.9.2012.
5.2 Considering the claim of the petitioner, the respondent was called upon by notice of the Court.
5.3 Upon receipt of the notice the respondent has filed reply affidavit dated 9.4.2013 which is countered by the petitioner by rejoinder affidavit dated 8.7.2013.
5.4 In the reply affidavit the respondent has claimed, inter alia, that:-
The petitioner kept various facts up sleeves and tried to misled the Hon''ble Court. In one of the ledger account for the period 1st April, 2012 to 31st January, 2013, the petitioner itself has acknowledged about Sale Return against bill No. 62 in question and referred to credit note of Rs. 19,240/-. The inverters were damaged one. It was also agreed that, the discount shall be provided for Rs. 1 lac and the company suffered for repair charges for approximately Rs. 50,000/- shall be deducted from the total invoice amount and hence total dues of Rs. 2,61,882/- are required to be paid to the petitioner. There is neither denial and neglect or omission on the part of the company. The petitioner has for the reasons best known to it did not accepting the said amount preferred the winding up petition for such disputed question of fact. As the company has stopped doing business with the petitioner and had not ordered for the goods, the petitioner did not call upon for the payment in a hope of getting further business. The petitioner considering the fact that, the company is not willing to place further order, the petitioner gave the audacious statement of ledger duly acknowledged and charged huge highhanded interest amount without any basis but in its statement as provided specifically also shown the sales return and referred about the credit note. Further the petitioner also admit in its petition that, there is no liability pertaining to such interest as shown in the ledger for late payment and there was no practice or policy pertaining to charging late payment.
The repeated statements and allegations made by the petitioner even at paragraph 9 about that there is no dispute regarding the goods as sold, supplied, delivered are denied and a complete falsehood. The blatant falsehood made at paragraph 9 that, the time and again the company has admitted its liabilities is nothing but a sheer abuse of the process of law and Court. The statement, allegations and claims as made are bald and without disclosing the correct facts in the petition. The petitioner has not come with the clean hands and the petition is required to be dismissed with heavy exemplary costs. The underline paragraphs about he apprehension of the petitioner about selling of the assets by the company are complete falsehood and such allegation and statement is made only with a view to prejudice the Hon''ble Court. Such miss statements without any base are reprimanded and condemnable one. The petitioner making out its case on apprehension and seeking for winding up is nothing but a sheer abuse. There is no case which can be adjudicated on the basis of apprehension and no prayer can be granted on apprehension. The petitioner has failed to make out its case for winding up and hence making statement and claiming at paragraph 10 about appointment of official liquidator or any fir person as provisional liquidator are denied. The said document is baseless and unlawful. There is no question of granting any interim and ad-interim reliefs, further as stated at paragraph 11 no orders of injunction should be passed against the respondent company, their directors, officers, agents, servants etc. for restraining as stated. In regard to paragraph 12, with the immense respect merely the registered office of the company is situated in the State of Gujarat does not entitle the petitioner to file the winding up petition on vague and false statements made in the petition. There is no case as made out for winding up and further there no willful neglect or failure on the part of the company and hence there is no cause of action ever arose for filing of the winding up petition. The petition is filed for malicious intention and to harass the company. In regard to statement made paragraph 13, the company has appropriately dealt with the submission in the foregoing paragraph. In regard to the statement made at paragraph 14, it is respectfully submitted that, the petitioner has miserably failed to show which amount has become due and payable and hence there is complete failure on the part of the petitioner to show the cause of action and hence such statement has no relevance as made at paragraph 14. The statement made at paragraph 15, the documents as purportedly placed more particularly the statement with the alleged notice is fabricated one and without authentication and hence there is no question of reliance on doctored and forged documents. The prayers as made at paragraph 16 are denied and cannot be granted as there is no case made out for winding up of the company.
It is respectfully submitted that a day before a letter dated 8.2.2013, the petitioner''s officer Mr. Vikas personally approached to the company for settlement of the amount as far as the amount of discount is concerned Mr. Vikas officer of the petitioner was not agreeable for discount of Rs. 1,00,000/- though agreed earlier while the company stated that, as agreed upon Rs. 1,00,000/- discount should be given and as the said amount was insisted and hot discussion took place, the company gave letter in writing to the petitioner on the next day. Further when asked about the expenses incurred for repairs of said inverted, the petitioner was avoiding in regard to the said aspect though earlier agreed to deduct such expense. Considering the malicious intention of the meeting a day before when the petitioner was backing out from the promises and due to hot discussion with said Mr. Vikas, the company had pointed out in the letter dated 8.2.2013. There is no reply to the said letter. Further the audacious statement given to the company i.e. the ledger speaks about the interest portion which was booked after financial accounting year March, 2012 i.e. from 1.4.2012 and hence the intention of the petitioner is willful and malafide. It is respectfully submitted that the installation of the said inverter was completed through the engineer appointed by the company and there was no service and guarantee or warranty for such installation and goods and further one broken inverter was delivered which was in fact installed and got run in the said condition in the manufacturing process of the company and said aspect of the matter is known to the petitioner and the petitioner has purposefully and deliberately kept such issue up sleeves while preferring the present petition. Further due to such defective goods which were supplied in which one piece was returned for replacement but there is none and other inverters of which one was broken and hence it was agreed for giving discount of Rs. 1,00,000/- which was in fact agreed but when the event took place on 7.2.2013, the company gave a reply dated 8.2.2013 i.e. the next day.
5.5 From the said reply affidavit of the respondent it appears that according to the respondent company it has some grievance regarding quality of goods supplied by the petitioner and that therefore it had also raised debt note against petitioner.
5.6 The respondent company has tried to rely on the communication dated 8.2.2013 to support and justify the said claim.
In this context it is not possible to overlook the fact that the said communication appears to have been issued by the respondent company only after statutory notice dated 12.9.2012 and it prima facie appears that prior to the statutory notice, the respondent had not raised any dispute as regards the quality of the goods.
6.1 In this background the petitioner has claimed that the so-called dispute sought to be raised by the respondent is an afterthought which it has raised only after service of statutory notice.
6.2 In this context it prima facie appears that the respondent has not placed any contemporaneous material before the Court to demonstrate that immediately after the receipt of the goods and/or within reasonable time it has raised dispute about quality of goods.
Be that as it may, so far as the petition u/s 433 and 434 of the Companies Act, 1956 (hereinafter referred to as the ''Act'') is concerned, the remedy is discretionary and in the first instance the petitioner seeking order or winding up against other entity is required to establish that the said other entity is willfully not making payments and is not discharging its debt and it has lost its substratum and also is unable to discharge its debt.
7.1 The situation in which the creditor can maintain a petition seeking order of winging up is provided for and contemplated u/s 433 and 434 of the Act which reads thus:-
Circumstances in which company may be wound up by Tribunal:
A company may be wound up by the Tribunal:-
(a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal;
(b) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting;
(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
(d) if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two;
(e) if the company is unable to pay its debts;
(f) if the Tribunal is of the opinion that it is just and equitable that the company should be wound up;
(g) if the company has made a default in filing with the Registrar its balance sheet and profit and loss account or annual return for any five consecutive financial years;
(h) if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality;
(i) if the Tribunal is of the opinion that the company should be wound up under the circumstances specified in section 424G:
Provided that the Tribunal shall make an order for winding up of a company under clause (h) on application made by the Central Government or a State Government.
Company when deemed unable to pay its debts.
(1) A company shall be deemed to be unable to pay its debts-
(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding [one lakh rupees] then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor;
(b) if execution or other process issued on a decree or order of [any Court of Tribunal] in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the [Tribunal] that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the [Tribunal] shall take into account the contingent and prospective liabilities of the company.
(2) The demand referred to in clause (a) of sub-section (1) shall be deemed to have been duly given under the hand of the creditor if it is signed by any agent or legal adviser duly authorised on his behalf, or in the case of a firm, if it is signed by any such agent or legal adviser or by any member of the firm.
When the respondent''s situation is examined in light of the aforesaid provision it has emerged that the respondent company did not make payment of petitioner''s invoices for long time, inasmuch as even until and after statutory notice respondent did not make payment. The claim which is made in connection with invoices, raised in May 2011 and August 2011.
8.1 Subsequently, at later stage after Court''s notice, the respondent company came forward claiming that there is dispute about quality of goods and there is commercial dispute between the parties and that therefore petition may not be entertained.
8.2 So as to test the bonafide of the respondent, the above mentioned order dated 9.7.2013 was passed.
At this stage, Mr. Shah, learned advocate for the petitioner has appeared and admitted that the amount as mentioned in the order dated 9.7.2013 is paid by the respondent company to the petitioner.
As mentioned above, fact remains that the respondent has made payment as per order dated 9.7.2013.
In this background and considering the fact that the respondent company is a going concern and approximately 100 employees are working in two shifts and also considering the fact that the respondent company has paid the amount to the extent of admitted liability, the Court is not inclined to entertain present petition and instead would require the respondent to avail regular Civil Remedy in view of the fact that, as claimed by the respondent, the commercial dispute between the parties can be examined by the learned trial Court in light of the evidence which may be led by the parties. Under the circumstances, below mentioned order is passed:-
For the foregoing discussion and above mentioned reasons the petition is not entertained.
It will be open to the petitioner to take out appropriate proceeding in the Competent Court where the dispute and claim can be adjudicated.
It is clarified that observations made in present order will not stand in way of the petitioner company and they are only prima facie observations made for the purpose of deciding issue about maintainability of the petition and that therefore learned trial Court, where the proceedings are taken out by the petitioner will decide such matter independently and on its own merits in light of the evidence which may be available on record.
It is clarified that it will be open to both sides to raise all contentions as may be available in law with regard to the balance i.e. disputed liability, however it will not be open to the respondent to raise any dispute with regard to the amount paid under order dated 9.7.2013 since the said payment is made only to the extent of admitted/undisputed liability.
With the aforesaid clarifications the petition stands disposed of. Notice is discharged.