1988 (11) TMI 300 - HC - Companies Law

Summary

Issues:
Petition for winding up under sections 433 and 439 of the Companies Act, 1956 based on non-payment for supplied goods; Dispute over payment authorization and authenticity of signatures on cheques; Compliance with Companies (Court) Rules regarding affidavit verification; Dispute regarding debt payment leading to consideration of winding up petition validity.

Analysis:
The petitioner filed a petition for winding up the respondent company under sections 433 and 439 of the Companies Act, 1956, due to non-payment for supplied goods. The petitioner alleged that despite supplying iron and steel C.R. Coils, the respondent company failed to clear the payment, leading to a total outstanding amount of Rs. 1,72,493.72, including interest. The respondent disputed the allegations, claiming collusion with the former executive director and lack of authorization for the cheque issued. The petitioner contended that the goods were received, utilized in manufacturing, and duly reflected in their accounts.

The respondent raised objections regarding the authenticity of signatures on cheques, disputing the authority of the executive director to issue payments. Additionally, the respondent challenged the compliance of the affidavit filed with the petition, citing irregularities under rule 21 of the Companies (Court) Rules. The respondent argued that non-compliance with the rules should lead to dismissal of the petition, referencing a Division Bench decision.

The court acknowledged the dispute over the debt payment and cited legal principles that a winding-up petition is not appropriate if the debt is bona fide disputed by the company. The court considered the evidence presented, including discrepancies in signatures and lack of conclusive proof of goods receipt. The court highlighted the need for the petitioner to prove the allegations through positive evidence in a civil suit, as per legal precedents.

Consequently, the court dismissed the winding-up petition, reiterating that the debt was bona fide disputed by the respondent company. The petitioner was advised to pursue the matter through a civil suit, with the option to invoke the provisions of section 14 of the Limitation Act. Each party was directed to bear its own costs, concluding the judgment.