1998 (10) TMI 441 - HC - Companies Law

Issues Involved:
1. Petition for winding up under sections 433 and 434 of the Companies Act, 1956.
2. Alleged debt and non-payment by the respondent company.
3. Disputed repayment and settlement claims.
4. Allegations of fraud, forgery, and manipulation of records.
5. Maintainability of the winding-up petition.

Issue-wise Detailed Analysis:

1. Petition for Winding Up:
The petitioner sought the winding up of the respondent company under sections 433 and 434 of the Companies Act, 1956, on the grounds that the respondent company was indebted to the petitioner and had not paid its dues despite the service of statutory notice.

2. Alleged Debt and Non-Payment:
The petitioner claimed that a short-term loan of Rs. 4,75,000 was given to the respondent company in April 1989, which was payable on 28-2-1990 along with interest. Despite statutory notices served on 22-9-1995 and 4-1-1996, the respondent company did not pay the amount or reply to the notices.

3. Disputed Repayment and Settlement Claims:
The respondent company contended that a sum of Rs. 4.50 lakhs was paid to the petitioner in full and final settlement via cheque dated 29-3-1996, and this amount was credited to the petitioner's account. The petitioner disputed this claim, stating that the alleged payment was fraudulent and that the petitioner did not have an account in the Bank of Baroda, Khatema Branch, where the payment was allegedly credited.

4. Allegations of Fraud, Forgery, and Manipulation of Records:
The respondent alleged that the present petition was engineered by the petitioner's Chartered Accountants, who were also statutory auditors for both companies, in collusion with an ex-director of the respondent company. The petitioner denied these allegations, asserting that the directors who allegedly accepted the settlement had resigned in 1987 and had no locus standi to accept any payment on behalf of the petitioner.

5. Maintainability of the Winding-Up Petition:
The court noted that under section 433(e) of the Act, the debt must be undisputed, sure, and ascertained. The machinery for winding up cannot be used as a means for realizing a disputed debt. The court found that the allegations and counter-allegations raised highly disputed questions that required thorough investigation and could not be decided in summary proceedings. Therefore, the petition was dismissed on the grounds that the disputed questions could only be resolved through a regular trial before a competent court.

Conclusion:
The court dismissed the winding-up petition, emphasizing that the issues raised required detailed examination of evidence and could not be resolved through affidavits in summary proceedings. The court also clarified that any observations made in this order would not affect the merits of any subsequent suit or proceedings initiated by the parties. Each party was ordered to bear its own costs.

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