1998 (10) TMI 398 - HC - Companies Law

Summary

Issues:
1. Petition for winding up under sections 433 and 434 of the Companies Act, 1956.
2. Disputed lease agreement for gas cylinders.
3. Defenses raised by the respondent company.
4. Jurisdiction of the Court.
5. Company's financial position and ability to pay debts.
6. Disputed claims and time-barred payments.
7. Arrears of rent and liability of the company.
8. Appointment of Official Liquidator and winding up order.

Analysis:

1. The petitioner filed a winding-up petition against the respondent company under sections 433 and 434 of the Companies Act, 1956, based on a lease agreement for 1000 gas cylinders. The company failed to make lease payments, leading to the petitioner's claim of Rs. 62,06,958.74.

2. The respondent company contested the petition on the grounds of disputed claims, time-barred payments, and jurisdiction. They argued that the lease amounts from certain months were time-barred and disputed the interest rate. However, the court found that the company had not paid the principal amount of Rs. 57 lakhs, rendering the interest rate dispute irrelevant.

3. The defense regarding territorial jurisdiction was dismissed as the company's registered office was within the Court's jurisdiction. The company's claim of having assets over Rs. 10 crores and being commercially solvent was rejected based on the principle that undisputed debts warrant winding-up orders.

4. The court addressed the issue of arrears of rent as a debt, emphasizing that the company's liability was clear despite attempts to dispute it. The defense that rent payment was contingent on an explosive certificate was deemed unfounded, especially since the company had issued a cheque for the rent.

5. The court found the company's defenses to be lacking in bona fides, citing precedents that supported the petitioner's request for winding up. Consequently, the petition was allowed, and the respondent company was ordered to be wound up. The Official Liquidator was appointed to take possession of the company's assets and carry out the liquidation process as per sections 456 and 457 of the Companies Act, 1956. Public notices of the winding-up were to be published in specified newspapers.