2010 (5) TMI 405 - HC - Companies Law

Summary

Issues:
- Recovery of outstanding dues from a trade debtor by an applicant company after being ordered to be wound up.
- Determination of whether the respondent owes the applicant a specific sum with interest.
- Evaluation of evidence presented by both parties to establish the debt claim.
- Consideration of the application's compliance with the limitation period.

Issue 1: Recovery of Outstanding Dues
The applicant company, after being directed for winding up, filed an application seeking to recover Rs. 1,73,175 with interest from the respondent, claiming the respondent as a trade debtor. The respondent opposed the application, denying the claim and asserting that the application was time-barred. The respondent acknowledged being part of a registered firm under the Partnership Act.

Issue 2: Determination of Debt Owed
Following procedural history involving appeals and remands, the trial commenced with the Official Liquidator presenting evidence and documents, while the respondent's partner was examined as a witness with no documents submitted. The key decision point was whether the applicant could prove that the respondent owed Rs. 1,73,175 with interest at 12% on Rs. 1,28,956.

Issue 3: Evaluation of Evidence
The court analyzed the evidence, emphasizing the insufficiency of proof by the applicant. The court noted discrepancies in the documents presented, such as a receipt lacking essential details and inconsistencies in accounting records. Despite the Official Liquidator's argument that the statement of affairs under the Companies Act established liability, the court deemed it insufficient as standalone evidence. The court highlighted the necessity for substantial legal evidence to substantiate the debt claim.

Issue 4: Compliance with Limitation Period
While the respondent raised the issue of the application being time-barred, the court did not delve into this aspect due to the lack of substantial evidence supporting the debt claim. Ultimately, the court dismissed the application, emphasizing the applicant's failure to provide satisfactory proof of the debt owed by the respondent, thereby ruling against the recovery of the outstanding dues.