1999 (4) TMI 486 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the winding-up petition.
2. Bona fide dispute and substantial questions regarding the debt.
3. Limitation period for the debt claim.
4. Parallel proceedings in Calcutta High Court.
5. BIFR's recommendation for winding-up.

Summary:

1. Maintainability of the Winding-Up Petition:
The petitioner-company filed a company-petition u/s 433(e), 434(1)(a), and 439(1)(b) of the Companies Act, 1956, for winding-up of Rajhans Steel Ltd. due to unpaid dues. The opposite party No. 1 (Rajhans Steel Ltd.) and opposite party No. 2 (State Bank of India) contested the maintainability, arguing the debt was time-barred and a parallel suit was pending in Calcutta High Court.

2. Bona Fide Dispute and Substantial Questions Regarding the Debt:
The opposite party No. 1 did not dispute the supply of materials or the unpaid amount but vaguely stated the claim was "highly disputed." The court noted that a winding-up petition is not maintainable if the debt is bona fide disputed and substantial questions are raised.

3. Limitation Period for the Debt Claim:
The supplies were made in 1984, and the last part-payment was on 17-6-1985. According to Article 15 of the Limitation Act, the period of limitation expired on 17-6-1988. The present petition, filed on 29-9-1992, was beyond the limitation period. The court held that a time-barred debt could not be realized through winding-up proceedings.

4. Parallel Proceedings in Calcutta High Court:
The petitioner-company had already filed Suit No. 1073 of 1987 in Calcutta High Court for the same debt. The court emphasized that parallel proceedings should not continue, as it leads to multiplicity of litigation and wastage of public time.

5. BIFR's Recommendation for Winding-Up:
The BIFR had recommended the winding-up of Rajhans Steel Ltd. due to failed rehabilitation attempts. However, appeals against this recommendation were pending before the appellate authority for Industrial and Financial Reconstruction. The court could not act on the BIFR's recommendation until the outcome of the appeals was known.

Conclusion:
The court dismissed the company-petition for winding-up of Rajhans Steel Ltd. due to the debt being time-barred and the existence of parallel proceedings in Calcutta High Court. The court directed the Registry to ascertain the status of the appeals against the BIFR's recommendation and take appropriate action if the appeals upheld the recommendation.