2016 (8) TMI 1252 - HC - Companies Law

Winding up - proof of business arrangement - Held that - Stock carry and Sales service contract worked itself out in tandem with the provisions of this Joint Venture agreement. Mr.Sakhardande sought to distance the Petitioner s case from these documents contending that these were not signed and in any event the signatories were to be Agrozan Dubai, Mesopotamia and Tiryaki and neither the Petitioner nor the Respondent were parties thereto and as contended in affidavit in sur-rejoinder, the Respondent is not at all concerned with commercial relationship between Agrozan Dubai and Mesopotamia FZE and there is nothing to connect the subject matter of the petition with purported business arrangement between the other parties. Mr.Sakhardande also contended that the quantity of goods were also different and the Petitioner is the sole owner of goods sold to the Respondent and was not acting as an agent of Mesopotamia. These are all aspects which in view cannot be gone into by the Company Court. For the aforesaid reasons find that the Petitioner has failed to make out case that the Respondent owes some claim. Petition is dismissed.

Summary

Issues Involved:
1. Petition for winding up under Section 433(3) and 434 of the Companies Act.
2. Alleged inability of the respondent to pay debts.
3. Disputed commercial transactions and accounts.
4. Validity of the respondent's defenses and debit notes.
5. Suppression of material facts by the petitioner.

Issue-wise Detailed Analysis:

1. Petition for Winding Up:
The petitioner sought the winding up of the respondent company under Section 433(3) and 434 of the Companies Act due to the respondent's perceived inability to pay debts. The petitioner, engaged in trading agricultural produce, claimed the respondent owed ?3,92,15,213/- for the delivery of Yellow Peas.

2. Alleged Inability to Pay Debts:
The petitioner argued that the respondent failed to pay the outstanding amount despite several reminders and partial payments. The invoices were initially raised on 26th October 2012, and a revised price was agreed upon on 30th July 2013. The petitioner sent multiple emails demanding payment, culminating in a statutory notice on 28th July 2014. The respondent denied liability in its reply on 16th August 2014.

3. Disputed Commercial Transactions and Accounts:
The respondent contended that the transactions were part of a larger commercial deal involving multiple entities, including Mesopotamia FZE and Agrozan Commodities DMCC. The respondent claimed that payments were made through bank transfers and that the accounts were squared off by a set-off agreement involving USD 577,109.36. The respondent also issued a debit note on 20th September 2013 for ?3,52,50,000/-.

4. Validity of the Respondent's Defenses and Debit Notes:
The court found merit in the respondent's defenses, supported by email correspondence and commercial invoices. The respondent's affidavit and supporting documents indicated that the transactions involved multiple parties and were not limited to the petitioner and respondent. The debit note was acknowledged by the petitioner, and the court questioned why the petitioner did not protest or disapprove it.

5. Suppression of Material Facts by the Petitioner:
The court observed that the petitioner failed to disclose the full nature of the transactions and the commercial relationships between the involved entities. The petitioner's affidavit in rejoinder lacked credibility, and the court found that the petitioner attempted to obfuscate the true nature of the transactions.

Conclusion:
The court concluded that the petitioner failed to establish a clear claim against the respondent. The petition for winding up was dismissed, with no orders as to costs. The court emphasized that the complexities of the commercial transactions and the involvement of multiple entities could not be adequately addressed in a winding-up petition.