1998 (10) TMI 493 - HC - Companies Law

Issues Involved:
1. Maintainability of the winding-up petition under sections 433(e) and 434(1)(a) of the Companies Act, 1956.
2. Compliance with Rule 21 of the Companies (Court) Rules, 1959.
3. Allegations of defective goods supplied and bona fide disputes regarding the debt.
4. Authorization of the affidavit filed in support of the petition.
5. The impact of technical defects on the maintainability of the petition.

Issue-wise Detailed Analysis:

1. Maintainability of the Winding-up Petition:
The petitioner sought the winding up of the respondent-company on the grounds of its inability to pay debts amounting to Rs. 89,123.75, plus interest. Despite a statutory notice of demand and a dishonored cheque for Rs. 90,000, the respondent-company failed to pay the amount. The respondent-company argued that the supplies were defective and that there were bona fide disputes regarding the debt, thus contesting the maintainability of the petition.

2. Compliance with Rule 21 of the Companies (Court) Rules, 1959:
The petition was initially heard along with two other connected petitions. It was later found that the affidavit in support of the present petition was not filed by the petitioner but by a pairokar (Satyendra Veer). The Court noted that compliance with Rule 21, which mandates that the petition be verified by an affidavit made by the petitioner, was not met. The affidavit filed did not state that Satyendra Veer was duly authorized by the petitioner to file the affidavit, making the petition non-compliant with the mandatory requirements of Rule 21.

3. Allegations of Defective Goods and Bona Fide Disputes:
The respondent-company claimed that the goods supplied were defective and damaged during transit, making them unusable. This claim was contested by the petitioner, who denied any prior complaint regarding the quality of goods before the counter-affidavit was filed. The respondent further argued that there were bona fide disputes regarding the debt, which made the petition not maintainable.

4. Authorization of the Affidavit Filed:
The affidavit verifying the petition was filed by Satyendra Veer, who was not the petitioner but a pairokar. The Court noted that the affidavit did not indicate that Satyendra Veer was authorized by the petitioner to file it. The application dated 24-9-1998, which sought to accept another affidavit by petitioner No. 2, was seen as an afterthought to comply with Rule 21. The Court found no sufficient reason to grant leave to the pairokar to file the petition, especially given the allegations of the petition being engineered by Satyendra Veer.

5. Impact of Technical Defects on Maintainability:
The petitioner argued that the defect was only formal in nature and could be remedied by filing another affidavit. However, the Court referred to precedents where defects in verification were considered substantive, not merely technical. The Court emphasized that the affidavit in support of a winding-up petition is treated as substantive evidence, and any defect in compliance with Rule 21 could not be rectified after the fact. The petition was dismissed due to non-compliance with the mandatory requirements of Rule 21, despite arguments that the respondent-company did not dispute the debt.

Conclusion:
The winding-up petition was dismissed on the grounds of non-compliance with Rule 21 of the Companies (Court) Rules, 1959, as the affidavit verifying the petition was not filed by the petitioner or a duly authorized person. The Court did not find sufficient reason to grant leave for the pairokar to file the affidavit and held that the defect was substantive, not merely technical. The allegations of defective goods and bona fide disputes regarding the debt further supported the dismissal of the petition.

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