1985 (12) TMI 344 - HC - Companies Law

Summary

Issues:
1. Winding up petition filed under sections 433(e) and (f), 434 and 439 of the Companies Act.
2. Company's inability to pay debts and just and equitable grounds for winding up.
3. Dispute over outstanding amounts and security deposit.
4. Contention regarding neglect to pay debts within the specified time period.
5. Liability disputed by the respondent based on limitation and set-off.

Detailed Analysis:
1. The petitioner filed a winding-up petition under relevant sections of the Companies Act, alleging the respondent company's inability to pay debts. The petitioner claimed amounts due on the grounds of an agency agreement, deductions for damaged goods, freight, and expenses. A demand notice was served, but the respondent disputed the claim, asserting a set-off and contending that the claim was barred by time.

2. The petitioner argued that the respondent's neglect to pay within the specified time period indicated an inability to pay debts, citing legal precedents. However, the court noted that previous decisions relied upon involved admitted liabilities, unlike the present case where the liability was disputed. The court emphasized the need for a prima facie proof of facts supporting the defense in cases of disputed liabilities.

3. The respondent contested the liability based on limitation and set-off. Regarding the limitation defense, the court found that an alleged acknowledgment did not constitute a fresh start of limitation. The respondent's set-off claim against the security amount was supported by the supply of goods worth a specific amount, which the petitioner did not dispute, implying an admission of the debt.

4. The petitioner's claim for interest on the security amount was challenged by the respondent, questioning the authority of officers who issued the credit note supporting the claim. The court highlighted the need for prima facie proof of authorization for such acknowledgments. As the respondent established a prima facie defense, the court ruled in favor of the respondent, dismissing the petition without costs.

In conclusion, the court dismissed the winding-up petition as the respondent had contested the liabilities on grounds of limitation and set-off, establishing a prima facie defense. The court emphasized the importance of prima facie proof in disputed liability cases and ruled that the petitioner was not entitled to recover any amount based on the security deposit or damages, leading to the dismissal of the petition.