2013 (9) TMI 991 - HC - Companies Law

Winding up application - Default in payment of the price of the coal supplied to the company - No reply to Statutory notice - Held that - I am not unmindful of the proposition of law that if the Court finds that a sham defence is taken only for the purpose of avoiding the rigour of the provisions applicable to the winding up of the company the Court should not consider the same to be a bona fide one. It is undisputed that non reply to a statutory notice raises a presumption but such presumption is certainly rebuttable. The specific case made out by the company is that the document which is the foundation of the claim of the petitioning creditor is not a genuine one and contains spurious and or manufactured seal and the signature. Had it been a case of bare allegation to that extent the Court would have brought the same within the zone of sham defence but in the instant case certain other documents bearing the seal and signature appended therein on its bare look suggests that the company uses a different seal and signature. There must be a clear and unambiguous acknowledgment and/or admission of the liability which this Court finds to be absent. The company not only disputed the supple of the material but disputed the veracity and/or the genuinely of the documents itself. This Court therefore does not find that mere non-response to a statutory notice would really stand against the company s defence as held in the case of K.T.S. (Singapore) PLC. Ltd. 1993 (1) TMI 243 - HIGH COURT OF CALCUTTA . In the above findings this Court does not find that the petitioning creditor has been able to make out a case as unequivocal claim in the winding up petition warranting the invocation of the provisions applicable to the winding up petition under the Companies Act of 1956. This Court finds that such claim cannot be adjudicated in the winding up proceeding and therefore relegates the petitioning creditor to civil suits. - Winding up petition dismissed.

Summary

Issues:
1. Default in payment of coal supply price.
2. Validity of statutory notice and acknowledgment.
3. Disputed authenticity of documents.
4. Company's defense against winding up petition.
5. Relevance of non-reply to statutory notice.
6. Presumption of liability acknowledgment.
7. Company's solvency and discretion of the Court.
8. Alleged admission of liability in correspondence.
9. Comparison with precedent judgments.
10. Dispute over material supply and document authenticity.
11. Court's decision on winding up petition.

Analysis:
1. The winding up petition was based on default in payment for coal supplied to the company, supported by invoices, confirmation of accounts, and a statutory notice served on the company.
2. The company contended that the documents were fabricated, and the seal and signature were not genuine, further arguing that the manufacturing unit was under a lessee's control during the relevant period.
3. The petitioner argued that non-reply to the statutory notice implies acknowledgment of liability, citing judgments supporting this view and emphasizing that the company did not raise a bona fide dispute.
4. The company refuted this, claiming the seal and signature on the documents were spurious, and there was a disparity with authentic company documents, presenting a defense against the petition.
5. The Court noted that a sham defense to avoid winding up provisions should not be considered bona fide, but in this case, the company's defense was supported by evidence of different seals and signatures used.
6. The company also provided evidence of solvency and correspondence with the lessee regarding the alleged claim, which did not clearly admit liability.
7. Precedent judgments were cited by both parties, with the Court distinguishing the present case based on the specific facts and evidence presented.
8. The Court found that the petitioning creditor failed to establish an unequivocal claim warranting winding up under the Companies Act of 1956, directing the petitioner to pursue civil suits instead.
9. Ultimately, the Court dismissed the winding up petition, concluding that the petitioner did not merit the invocation of winding up provisions based on the evidence and arguments presented.