2008 (7) TMI 575 - HC - Companies Law

Winding up Circumstances in which company may be wound up by Tribunal - Held that - It could be seen from the available materials that rehabilitation scheme was approved with effect from July 19, 1989 and it continued till March 31, 2001 and during which period, the letter was issued. Under these circumstances, the court is of the considered opinion that when the defence plea that was stated in the course of the counter was that it was time-barred, it has got to be looked into and decided only on appreciation of evidence and not otherwise. At this juncture, it is pertinent to point out that the learned single judge, at the end of the order, recorded the finding that the claim was time-barred. Now, the grievance was that that finding has got to be removed from the order. Accordingly, that finding is removed from the order. Thus, the question as to whether it is time-barred or not is to be decided only on adducing evidence of both parries and on appreciation of the same. With the above observation, this O.S.A. is dismissed. No costs. It is open to the appellant to make a claim, as per the law, before the appropriate forum for getting appropriate remedy.

Issues:
- Dismissal of winding-up order under sections 433(e), 434(1)(a) and 439(1)(b) of the Companies Act
- Denial of transactions and payment by the respondent
- Claim of being a sick unit till March 31, 2001
- Applicability of section 18 of the Limitation Act and section 25(3) of the Contract Act
- Authority to issue acknowledgment of liability by the respondent
- Rehabilitation scheme approval and its impact on the case

Dismissal of Winding-Up Order:
The appellant sought a winding-up order under specific sections of the Companies Act due to outstanding payments from the respondent. The learned single judge dismissed the petition after considering submissions from both sides and available evidence. The appellant challenged this decision on the grounds that the liability was definite, payments were made, and acknowledgment of liability was provided. The appellant argued that non-payment and lack of response to notices indicated the respondent's inability to pay, justifying winding-up. However, the court found that further evidence was needed to decide the case conclusively.

Denial of Transactions and Payment:
The respondent denied the transactions and payments claimed by the appellant, requesting production of specific documents. The court noted that these documents were not provided, leading to uncertainty about the transactions. The appellant argued that the liability was acknowledged in communications from the respondent, making document production unnecessary. The court emphasized the need for evidence from both parties to determine the validity of the claims.

Claim of Being a Sick Unit:
The respondent contended that it was a sick unit until March 31, 2001, implying that the claim was time-barred and the petition should be dismissed. The court acknowledged this defense but highlighted the requirement for thorough evidence examination to ascertain the validity of the claim.

Applicability of Limitation and Contract Acts:
The appellant invoked section 18 of the Limitation Act and section 25(3) of the Contract Act to argue against the time-barred claim. The court considered these legal provisions but emphasized the need for proper authorization for acknowledgment of liability, raising doubts about the validity of the acknowledgment provided.

Authority to Issue Acknowledgment of Liability:
The court scrutinized the authority of the individual who issued the acknowledgment of liability on behalf of the respondent. The absence of clear evidence regarding authorization raised concerns about the validity of the acknowledgment and its impact on the case.

Rehabilitation Scheme Approval Impact:
The court noted the approval of a rehabilitation scheme during a specific period and its relevance to the case. The respondent's defense of being a sick unit during this scheme's operation added complexity to the time-barred claim, necessitating further evidence examination for a conclusive decision.

In conclusion, the court dismissed the appeal, emphasizing the need for additional evidence and proper evaluation of all aspects before reaching a final decision on the winding-up order. The removal of the time-barred finding indicated the court's intention to thoroughly review the case based on evidence from both parties.

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