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Issues:
Petition seeking winding up of a company under section 433(e) and (f) of the Companies Act, 1956 due to outstanding payments for supplied goods and alleged inferior quality of goods supplied. Analysis: 1. The petitioner filed a company petition seeking the winding up of the respondent-company under section 433(e) and (f) of the Companies Act, 1956, due to outstanding payments for supplied goods. The respondent-company allegedly made part payments but failed to clear the outstanding balance of Rs. 12,14,805. The petitioner claimed a total due amount of Rs. 24,19,984. A registered notice was sent to the respondent-company, which was returned with the endorsement that the company was closed. The respondent-company contended that some goods supplied were of inferior quality and were returned, denying the outstanding payment. The court noted the failure of the respondent-company to establish the sub-standard quality of goods or the return of goods worth Rs. 12,14,805. 2. The respondent-company also disputed the service of the statutory notice, arguing that it was not served upon them. However, the petitioner provided evidence of the notice and postal receipt, which were returned with the endorsement of the company being closed. The court found no substance in the contention that the notice was not served, especially since there was no denial of receiving other correspondence at the same address by the respondent-company. 3. The petitioner relied on various judgments to support the claim for winding up the respondent-company. It was argued that the failure to pay the price of goods, coupled with the inability to establish a bona fide dispute regarding the quality of goods, justified the winding up. Additionally, the order of the Board for Industrial and Financial Reconstruction (BIFR) indicated the respondent-company's inability to pay its dues. Therefore, the court deemed it just and equitable to wind up the respondent-company, appointing the Official Liquidator as the liquidator and directing the ex-directors to file a "statement of affairs" within the prescribed statutory period. 4. The judgment highlighted the proceedings before the BIFR, where it was established that the respondent-company had lost its substratum, with its net worth turning negative, rendering it insolvent and financially unviable. The court emphasized the company's deceptive practices, including attempting to register with the BIFR to benefit from protective measures. The lack of improvement in the company's financial condition further supported the decision to wind up the company. 5. In conclusion, the company petition was allowed, and the respondent-company was directed to be wound up. The Official Liquidator was appointed to take over the company's assets and books of account, with a requirement for the ex-directors to submit a "statement of affairs." The order was to be advertised and communicated to the Registrar of Companies for further action.
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