9911796707
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Issues:
- Failure to commence production of ceramic glazed tiles as per agreement - Non-refund of security deposit to the respondent - Dishonoring of post-dated cheques issued to settle outstanding amount - Dispute over the rate of interest on the outstanding amount - Order of winding up the company based on admitted liability Issue 1: Failure to Commence Production of Ceramic Glazed Tiles The appellant company failed to commence production of ceramic glazed tiles as agreed upon in the memorandum of understanding dated 16-8-1989 with the respondent. This breach led to the termination of the agreement by the respondent, who sought the refund of the security deposit paid. Despite admitting the liability and agreeing to repay the amount with interest, the appellant did not fulfill its obligations, resulting in a notice threatening winding up proceedings. Issue 2: Non-Refund of Security Deposit The respondent deposited Rs. 15 lakhs as a security deposit with the appellant as per the agreement. After the termination of the agreement, the appellant agreed to refund the security deposit with interest but failed to do so despite repeated requests and notices. The appellant made partial payments but ultimately failed to honor the commitment, leading to the threat of winding up proceedings. Issue 3: Dishonoring of Post-Dated Cheques The appellant issued post-dated cheques totaling to a significant amount to settle the outstanding liability. However, these cheques were returned dishonored, indicating a failure to meet the financial obligations as agreed upon. Despite attempts to make payments, the appellant's failure to honor the cheques further exacerbated the situation. Issue 4: Dispute Over Rate of Interest A key point of contention was the rate of interest on the outstanding amount. While the appellant disputed the interest rate of 21%, it was observed that the appellant had agreed to pay the entire amount along with interest at this rate in correspondence. The memorandum of understanding also specified the interest rate in case of default, supporting the respondent's claim for interest at 21%. Issue 5: Order of Winding Up Based on Admitted Liability The court found that the appellant had an admitted liability outstanding, as evidenced by the correspondence and the dishonored cheques. The appellant's failure to clear the admitted liability within the specified time frame after receiving the statutory notice justified the order of winding up under section 433(e) read with (f) and section 434 of the Companies Act. The liability being admitted and not paid within the stipulated period provided sufficient grounds for the winding up of the appellant company. In conclusion, the High Court upheld the order of winding up the appellant company based on the admitted liability and failure to meet financial obligations. The court dismissed the appeal, emphasizing the liability to pay the admitted amount along with interest at the specified rate. The official liquidator was directed to take charge of the company's assets and proceed in accordance with the law, as the appellant failed to comply with the conditional order of stay.
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