2006 (12) TMI 235 - HC - Companies Law

Summary

Issues Involved:
1. Limitation of the debt claim.
2. Acknowledgement of debt through meeting minutes.
3. Full and final settlement of the debt.
4. Bona fide disputes raised by the respondent.
5. Authorization of the petition filing.

Summary:

1. Limitation of the Debt Claim:
The petitioner, Technofab Engineering Limited, filed a winding-up petition u/s 433(e), 434, and 439 of the Companies Act, 1956, against the respondent, Nuchem Weir India Limited, for non-payment of debt. The court examined the limitation period, noting that payments made by the respondent, including dishonored cheques dated 15-10-1999 and 28-10-1999, and subsequent payments totaling Rs. 11,63,917 on 15-7-2002, extended the limitation period u/s 19 of the Limitation Act. Thus, the petition filed on 13-7-2005 was within the limitation period.

2. Acknowledgement of Debt Through Meeting Minutes:
The court held that the minutes of the meeting dated 3-5-1999 constituted an acknowledgment of debt. The minutes recorded the total amount due as Rs. 245 lakhs and the reconciled payment of Rs. 206.77 lakhs, leaving a balance of Rs. 31,86,009.77. The court rejected the respondent's argument that the minutes were conditional and not an acknowledgment of debt.

3. Full and Final Settlement of the Debt:
The respondent argued that the payment of Rs. 11,63,917 in July 2002 was in full and final settlement. However, the court found that this payment settled only the criminal complaint u/s 138 of the Negotiable Instruments Act for dishonored cheques and not the entire debt. The court held that there was no full and final settlement of the petitioner's entire claim.

4. Bona Fide Disputes Raised by the Respondent:
The respondent raised several objections, including defects in workmanship and delays. The court found these objections irrelevant in light of the meeting minutes dated 3-5-1999, which resolved all pending issues. The court allowed a set-off of Rs. 3,80,805 for repairs but rejected further deductions.

5. Authorization of the Petition Filing:
The respondent contended that the petition was not filed by a duly authorized person. The court rejected this argument, referencing section 196 of the Contract Act and the Supreme Court judgment in United Bank of India v. Naresh Kumar.

Conclusion:
The court held that the respondent owed Rs. 16,55,071.27 to the petitioner after accounting for set-offs and payments. The winding-up petition was admitted, but the appointment of a provisional liquidator was deferred for one month to allow the respondent to make the payment along with 5% interest per annum. If the payment was not made, the Official Liquidator would be appointed, and citations would be issued.