1999 (8) TMI 864 - HC - Companies Law

Summary

Issues Involved:
1. Admission of a petition for winding up of a company under Sections 433 and 434 of the Companies Act, 1956.
2. Alleged consultancy work and related payments.
3. Dispute over the authenticity of documents and certificates.
4. Existence of an employer-employee relationship.
5. Bona fide dispute regarding the debt.

Issue-Wise Detailed Analysis:

1. Admission of a petition for winding up of a company under Sections 433 and 434 of the Companies Act, 1956:
The appeal was directed against a judgment admitting a petition for winding up of a company for a sum of Rs. 4 lakhs inclusive of interest. The appellant was directed to pay the amount by 15-6-1999, failing which the petitioner-respondent was granted liberty to publish advertisements.

2. Alleged consultancy work and related payments:
The respondent claimed to have rendered engineering consultancy services to NSL Limited and Steelco Gujarat Ltd. under instructions from the appellant. Bills were raised for these services, but no payments were made. The appellant contended that the respondent was an employee who misused his position to grant contracts to Micro Trade Control.

3. Dispute over the authenticity of documents and certificates:
The trial judge relied on two certificates and a letter dated 12-6-1995 to support the respondent's claim. The appellant argued that one certificate was forged, and the letter was manufactured. The trial judge's reliance on these documents was contested, with the appellant producing vouchers to support their claim of an employer-employee relationship.

4. Existence of an employer-employee relationship:
The appellant produced vouchers showing the respondent's signatures, indicating he was an employee. The respondent's counsel admitted that some vouchers bore his client's signature. The trial judge's decision to rely on the disputed certificate was questioned, especially since the appellant raised the issue of an employer-employee relationship in its affidavit-in-opposition.

5. Bona fide dispute regarding the debt:
The appellant disputed the authenticity of the letter dated 12-6-1995, which was crucial for the respondent's claim. The letter's reference in a fax dated 9-6-1995 raised doubts about its authenticity. The court noted that a winding-up petition is not a legitimate means to enforce payment of a bona fide disputed debt. The appellant's challenge to the letter's authenticity could not be dismissed, and if proven forged, the respondent's claim would be barred by limitation.

Conclusion:
The High Court set aside the trial judge's judgment and order dated 19-5-1999, acknowledging the appellant's bona fide dispute regarding the respondent's claim. The appeal was allowed, but no costs were awarded.