1998 (10) TMI 438 - HC - Companies Law

Issues Involved:
1. Petition for winding up under sections 433(e) and (f) of the Companies Act, 1956.
2. Alleged debt and non-payment by the respondent company.
3. Bona fide dispute regarding the amount claimed.
4. Admission of debt and subsequent dispute.
5. Filing of civil suit by the petitioner.
6. Interest on the admitted amount.
7. Financial status and ability of the respondent company to pay its debts.

Detailed Analysis:

1. Petition for winding up under sections 433(e) and (f) of the Companies Act, 1956:
The petitioner filed a petition under sections 433(e) and (f) of the Companies Act, 1956, seeking the winding up of the respondent company on the grounds of insolvency and inability to pay its dues despite receiving a statutory notice.

2. Alleged debt and non-payment by the respondent company:
The petitioner claimed that the respondent owed Rs. 28,88,529.25 along with interest at 24% per annum based on custom and trade practices. Despite repeated demands and a statutory notice dated 31-12-1994, the respondent did not make the payment.

3. Bona fide dispute regarding the amount claimed:
The respondent disputed the amount claimed, alleging overcharging by the petitioner and a bona fide dispute regarding the accounts. They claimed that the petitioner charged higher rates than agreed upon and that the dispute was genuine and not an afterthought.

4. Admission of debt and subsequent dispute:
The petitioner argued that the respondent had admitted a debt of Rs. 30 lakhs in an agreement dated 2-5-1994, and the dispute raised in the counter affidavit was not bona fide but a "moonshine" defense. The respondent, however, contended that the admission was inadvertent and the dispute regarding the rates was genuine.

5. Filing of civil suit by the petitioner:
The respondent highlighted that the petitioner had filed a civil suit for the recovery of the claimed amount, and the winding-up petition should be dismissed on this ground. The court noted that the suit involved the same disputed questions and should be adjudicated in the civil court.

6. Interest on the admitted amount:
The petitioner claimed interest at 24% per annum on the outstanding amount based on trade custom and practices. The respondent denied any liability for interest, and the court found no agreement or evidence supporting the claimed interest rate. However, the court directed the respondent to pay interest at 15% per annum (simple) on the admitted amount from the date of the statutory notice until the date of payment.

7. Financial status and ability of the respondent company to pay its debts:
The respondent argued that the financial difficulties were temporary due to the relocation and setting up of an affluent plant, and they had already paid a substantial amount to the petitioner. The court found no evidence of insolvency or inability to pay debts and noted that the company was operational and employing over 200 persons.

Conclusion:
The court concluded that the dispute raised by the respondent was bona fide and could not be decided in summary winding-up proceedings. The court directed the respondent to pay interest at 15% per annum on the admitted amount and costs to the petitioner. The winding-up petition was finally disposed of.

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