2013 (2) TMI 850 - HC - Companies Law

Summary

Issues involved: Claim for outstanding hiring charges, dispute over settlement amount, defense of the company, provision for security deposit.

The judgment pertains to a claim for outstanding hiring charges of a vibratory hammer with accessories for sheet piling work. The petitioner relied on invoices indicating the working hours of the machine, which the company did not object to. The company made partial payments but disputed the remaining amount, claiming a settlement for a lesser sum. Despite the company's assertion of settlement, the petitioner denied it, leading to a legal dispute over the outstanding amount.

The company failed to provide any concrete defense to the claim, although it asserted that the amount had been settled at a lower figure. The court acknowledged the theoretical possibility of the company presenting a valid defense during a regular action. However, as the company could not substantiate its claim of settlement with any supporting evidence, the court found no plausible defense against the claim. The company was granted the opportunity to establish its defense during a regular action by securing the entire claim of the petitioner.

To address the situation, the court provided the company with an option to furnish a cash security of Rs. 4.50 lakh within a specified timeframe. If the company deposited the security, the claim of the petitioner would be relegated to a suit, and the deposit would be credited to the suit if filed within four weeks. The court outlined the process for handling the security deposit, including investment in a fixed deposit in a nationalized bank. Failure to provide the security would result in the admission of the petition for the specified amount, allowing the petitioner to advertise the petition.

In the event that the company deposited the security and the petitioner did not initiate a suit within the stipulated timeframe, the company could request the immediate release of the security. The court instructed the advocates for both parties to communicate promptly upon the furnishing of the security. Additionally, the judgment specified that no costs were to be awarded at this stage of the proceedings.