1994 (3) TMI 331 - HC - Companies Law

Summary

Issues Involved:
1. Whether the respondent company neglected or failed to pay its debt despite service of statutory notice.
2. Whether there was an agreed price for the goods delivered.
3. Whether the winding-up petition is maintainable given the alleged bona fide dispute over the debt.
4. Whether the respondent company is commercially insolvent.

Detailed Analysis:

1. Neglect or Failure to Pay Debt:
The petitioner claimed that the respondent company failed to pay its debt despite being served a statutory notice. The petitioner despatched electronic components worth USD 16,992.21 to the respondent, who initially refused delivery, claiming the order was cancelled. However, the respondent later agreed to take delivery on the invoiced prices if the petitioner paid the demurrage charges. Despite taking delivery and utilizing the goods, the respondent did not make the payment. The petitioner served a statutory notice, and upon the respondent's failure to pay within the stipulated period, the winding-up petition was filed. The court found that the respondent neglected to pay the debt despite statutory notice, satisfying the requirement under section 434 of the Indian Companies Act.

2. Agreed Price for Goods:
The respondent contested the petition, arguing there was no agreed price for the goods and that the order was cancelled before despatch. The respondent claimed the price for one item, P-8275, should be USD 11.45 per piece, while the petitioner offered a reduced price of USD 16.59. The respondent ultimately took delivery of the goods without further dispute on the prices mentioned in the invoices. The court noted that the respondent's conduct, including paying customs duty based on the invoiced prices and not raising any price disputes in communications, indicated an implicit agreement to the invoiced prices.

3. Maintainability of Winding-Up Petition:
The respondent argued that the winding-up petition was not maintainable due to a bona fide dispute over the debt. The court referred to precedents, including "Madhusudan Gordhandas and Co. v. Madhu Woollen Industries P. Ltd." and "Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami," which established that a winding-up petition is not a legitimate means to enforce payment of a bona fide disputed debt. However, the court found that the dispute raised by the respondent was not bona fide and substantial. The respondent's failure to pay even the admitted amount of USD 11,634.79 further weakened its position. The court concluded that the petition was maintainable as there was a clear liability.

4. Commercial Insolvency:
The respondent claimed to be fully solvent and willing to pay the admitted amount upon obtaining permission from the Reserve Bank of India. The court rejected this argument, noting that it was the respondent's responsibility to obtain such permission. The court cited "Eurometal Limited v. Aluminium Cables and Conductors (U.P.) P. Ltd.," which held that failure to obtain necessary permissions and remit the money due, despite statutory notice, justified winding-up. The court found that the respondent's inability to pay the debt indicated commercial insolvency.

Conclusion:
The court admitted the winding-up petition, directing that citations be published in accordance with rules in specified newspapers and the Delhi Gazette. The matter was scheduled for further hearing on July 4, 1994.