2006 (11) TMI 352 - HC - Companies Law

Issues Involved:
1. Winding up petitions under sections 433(e), (f), and 434 read with section 439 of the Companies Act, 1956.
2. Counter-claims raised by the respondent companies.
3. Examination of the principles of law regarding winding up petitions and counter-claims.

Detailed Analysis:

1. Winding up petitions under sections 433(e), (f), and 434 read with section 439 of the Companies Act, 1956:

The petitioner filed two Company Petitions for winding up of the respondent companies, R. K. Imports and German Homoeopathic Distributors, due to non-payment of dues for supplied homeopathic medicines amounting to euros 34,804.78 and euros 1,428,483.64 respectively. The respondent companies did not dispute the placement of orders, supplies, invoices, and the amount due but raised counter-claims against the petitioner.

2. Counter-claims raised by the respondent companies:

A. Counter-claim towards payment of commission of euros 219,243.45:

The respondent companies claimed commission based on an agreement dated June 24, 1998, which they argued was extended by tacit understanding. The court found this counter-claim to be genuine and substantial, supported by prima facie evidence.

B. Repurchase of stock:

The respondent companies claimed euros 350,017 for repurchase of stock under clause 9 of the agreement. The court rejected this claim due to lack of prima facie evidence and failure to specify the three-months requirement as per the agreement.

C. Counter-claim on account of expenses incurred on labelling:

The respondent companies claimed euros 260,000 for labelling expenses. The court found the claim for the year 2001 at euros 75,000 to be genuine but rejected the balance amount as not bona fide.

D. Counter-claim of euros 932,500 towards compensation due to WHO red alert on eye drops:

The court found the claims inflated and excessive with no supporting documents. However, it allowed a set-off of euros 182,500, including euros 100,000 for getting CMS done.

E. Reimbursement for supplies made in 2003-04:

The respondent companies claimed euros 975,000 for supplies misdescribed as made in Germany but manufactured in Czechoslovakia. The court rejected this claim as belated and without substantial evidence.

F. Damages/compensation for breach of contract:

The respondent companies claimed euros 1,850,000 for various breaches, including illegal termination and bad faith. The court found these claims exorbitant and without substantial basis, rejecting them as not bona fide.

G. Other counter-claims:

The court rejected claims for a debit note of euros 30,463.01 and frozen commission of euros 52,815.37 due to lack of details and supporting documents.

3. Examination of the principles of law regarding winding up petitions and counter-claims:

The court referred to well-settled principles from Supreme Court judgments, including Madhusudan Gordhandas and Co. v. Madhu Woollen Industries P. Ltd., which state that a winding-up petition will not be allowed if the debt is bona fide disputed and the defence is substantial. The court emphasized that counter-claims must be genuine, substantial, and supported by prima facie proof.

Conclusion:

The court concluded that the counter-claims amounting to euros 476,243.45 were genuine and substantial. The debt due by R. K. Imports was less than the counter-claims, leading to the dismissal of the winding-up petition against them. However, the debt due by German Homoeopathic Distributors exceeded the counter-claims, leading to the admission of the winding-up petition against them, with a deferment for publication of citations and appointment of a provisional liquidator for two months to allow payment of the outstanding amount.

← Previous Next →