2015 (3) TMI 1162 - HC - Companies Law

Winding up petition - Claim for balance outstanding - on account of supply and on account of Sale Tax due to non-submission of C Form - Appellant supplied goods and received part payment - Held that - whether the claim is just and without any defence, is examined by the Company Judge applying the principles that the Court would adopt in an action under Order XXXVII of the Code or Chapter XIII A of the Rules of this Court in its Original Side. Applying such principles of law, the Court may not admit the winding up petition, once it is satisfied, the claim is bona fide disputed, when the Court is not sure as to the chance of success of the defence, it would often direct the company to show their bona fide by depositing the claim amount or any part thereof. Here, the respondent miserably failed either to show, they had a plausible defence or show, they were otherwise solvent also there is not any defence to the claim found. The respondent is not prepared to deposit the entire principal claim, so, the winding up petition is liable to be admitted. - Appeal disposed of

Summary

Issues Involved:
1. Maintainability of the second winding up petition.
2. Applicability of the principle of res judicata.
3. Examination of the merits of the winding up petition.

Issue-wise Detailed Analysis:

1. Maintainability of the second winding up petition:
The appellant initially filed a winding up petition which was withdrawn with the liberty to apply afresh. The learned Company Judge dismissed the subsequent petition on the grounds of res judicata, stating that the second petition was based on the same cause of action as the first. The appellant argued that the liberty granted to apply afresh should negate the application of res judicata. The respondent contended that the second petition was not maintainable as the first petition was withdrawn without express leave to file a fresh petition.

2. Applicability of the principle of res judicata:
The judgment discusses the concept of res judicata, which prevents a court from trying any issue that has already been adjudicated between the same parties. The court referred to Section 11, Order II Rule 1 and 2, and Order XXIII Rule 1 of the Code of Civil Procedure, emphasizing that a comprehensive action must be brought initially, and any subsequent action on the same issue without specific liberty would be invalid. The court concluded that since there was no final adjudication on the merits in the earlier proceeding, the second winding up petition was not barred by res judicata. However, the court examined whether the withdrawal of the first petition without express leave to file a fresh petition would invalidate the subsequent petition under Order XXIII Rule 1.

3. Examination of the merits of the winding up petition:
The court proceeded to analyze the merits of the winding up petition to avoid unnecessary delays. The appellant supplied goods and received part payment, with the respondent failing to provide Sales Tax forms. The correspondence between the parties indicated that the respondent was buying time without raising any substantive dispute. The respondent's inability to deposit the claimed amount suggested insolvency. The court found no plausible defense to the appellant's claim and determined that the winding up petition should be admitted. The court directed the respondent to pay the outstanding principal sums along with Sales Tax dues and interest in 12 equal monthly installments to avoid the advertisement of the winding up notice.

Decision:
The appeals were allowed, and the judgment of the learned Company Judge was set aside. The winding up petitions were admitted subject to departmental scrutiny. The respondent was directed to pay the outstanding amounts in installments, failing which the appellant could proceed with the advertisement of the winding up notice. The appeals were disposed of without any order as to costs.