2008 (5) TMI 413 - HC - Companies Law

Winding up - Circumstances in which a company may be wound up - Held that - As it appears from the facts and circumstances in the present case that the Company is unable to pay its dues and the debt has already been determined and the amount is also payable. Hence, it is well-settled law that a winding up petition is a perfect remedy for enforcing payment of a just debt.

Summary

Issues:
- Winding up order against JMD Medicare Limited under Companies Act, 1956.
- Dispute over payment of dues by JMD Medicare Limited to petitioning creditor.
- Company's claim of financial crunch and counter-claim.
- Applicability of winding up petition by a secured creditor.
- Company's request for instalment payments and opposing views by petitioning creditor.
- Justification of the winding up order by the Hon'ble Company Judge.

Analysis:
The judgment involves the appeal against a winding up order passed against JMD Medicare Limited under the Companies Act, 1956. The Company Judge directed the winding up after finding the company unable to pay its debts and the petitioning creditor's claim indisputable. The company had faced issues with payment for a Magnetom Harmony MRI System purchased from Siemens AG in 1998, leading to defaults and revised payment schedules due to financial constraints.

The appellant contended that a bona fide dispute existed regarding the creditor's claim and highlighted a counter-claim filed after the winding up order. However, the respondent argued that even secured creditors can apply for winding up under specific sections of the Companies Act. The court noted the company's repeated assurances of payment and failure to meet dues for four years, supporting the winding up order.

The appellant's plea for reasonable instalments to pay dues was opposed by the petitioning creditor, who emphasized the company's requests for instalment payments as evident from correspondence. The court referenced legal precedents to support the equitable nature of winding up petitions for undisputed debts and dismissed the appellant's argument of a counter-claim defense raised post the winding up order.

Ultimately, after analyzing the facts, circumstances, and legal principles, the court affirmed the Company Judge's decision, stating that the company's inability to pay its dues justified the winding up order. The judgment emphasized the equitable nature of winding up petitions as a remedy for enforcing payment of just debts, dismissing the appeal and upholding the original order.