2010 (10) TMI 1166 - HC - Companies Law

Summary

Issues involved: Dispute over payment for coal supplied, rejection of coal due to quality issues, validity of winding-up petition.

Summary:
The appeal challenged an order permanently staying a winding-up petition against a company regarding payment for coal supplied. The petitioning creditor alleged delivering coal to the company, which was rejected due to alleged poor quality. The company contended that the coal was rejected and the matter was settled with the creditor's agent. The court directed the agent to file an affidavit. The petitioning creditor argued that the company failed to raise a genuine defense and should be ordered to pay. The court found disputes between the parties and concluded that a civil trial was necessary to determine the company's legal obligation. The court analyzed the role of the agent in the transaction and the quality of the coal supplied. It held that the company had a bona fide defense and dismissed the winding-up petition. The court referred to legal principles regarding winding-up orders and creditor's petitions. The judgment affirmed the lower court's decision, stating that the company's defense was substantial and not a mere delaying tactic. The appeal was dismissed, and parties were granted certified copies of the order.