2012 (2) TMI 361 - HC - Companies Law

Companies Act 1956 - petition filed u/s 433(e) & (f), 434 & 439 of Companies Act, 1956 seeking to wind up the Respondent-Company non-payment of debt Held that - From the facts of the case it is concluded that there is no bona fide dispute as regards the dues of the petitioning creditor and mere filing of a suit is not enough to say that there is bona fide dispute as regards the claim of the petitioner or this application is an abuse of process of this Court. There is no doubt that the Company failed and neglected to pay the dues of the Petitioner Company. Therefore, this winding up application is admitted. The winding up application is to be advertised. However, Company is granted an opportunity to pay the dues as aforesaid by five monthly equal installments as stipulated. In case of regular payment of installments, order of advertisement would remain stayed permanently. In case any one of the installments is not paid the petitioner is permitted to publish the notice as directed hereinabove - Decided in favor of petitioner.

Issues Involved:
1. Contractual Agreement and Terms
2. Allegations of Overcharging
3. Bona Fide Dispute and Statutory Notice
4. Payment and Settlement Negotiations
5. Court's Decision on Winding Up Application

Detailed Analysis:

1. Contractual Agreement and Terms:
The petitioner had an agreement with the Company to procure, store, and deliver newsprint, including handling payments for basic price, taxes, transportation, and other charges. The terms specified various charges such as overdue interest, service charges, and storage fees. The contract stipulated that payment should be made within 45 days, failing which overdue interest and service charges would apply. The petitioner financed these purchases and stored the goods until delivery to the Company.

2. Allegations of Overcharging:
The Company alleged that the petitioner overcharged them for the newsprint, claiming that other publications purchased newsprint at lower rates. The petitioner contended that they only financed the purchases and did not sell the newsprint. The price included various costs like taxes, transportation, and storage, which were agreed upon by the Company. The Court found that the petitioner's charges were in accordance with the agreed terms and conditions, and the Company's allegations were not substantiated by any evidence.

3. Bona Fide Dispute and Statutory Notice:
The petitioner issued a statutory notice under Section 434 of the Companies Act, 1956, demanding payment of Rs.1,51,73,185.62 along with contractual interest and overdue service charges. The Company disputed the claim, alleging overcharging and filed a civil suit. The Court examined whether there was a bona fide dispute and concluded that the Company's defense was not genuine, as they had agreed to the terms and conditions and had utilized the goods without objection.

4. Payment and Settlement Negotiations:
Negotiations took place between the parties, where the Company requested a discount due to financial difficulties. The petitioner offered a discount of Rs.18,00,000/- if the Company paid all dues by 30th November 2009, which the Company failed to do. Further discussions led to the Company agreeing to pay Rs.6.05 crores in installments without additional interest. However, this settlement failed as the petitioner insisted on interest as per their bank's rates.

5. Court's Decision on Winding Up Application:
The Court found no bona fide dispute regarding the petitioner's claim and held that the Company had failed to pay its dues. The Court admitted the winding up application, ordering the Company to pay Rs.1,62,75,293.25 along with 15% interest plus 2% penal interest and 1% monthly overdue service charges. The Company was granted the opportunity to pay in five monthly installments, failing which the petitioner could publish the winding-up notice.

Conclusion:
The Court concluded that the petitioner's claim was valid and the Company's defense was not bona fide. The winding-up application was admitted, with the Company being given a chance to settle the dues in installments. The decision emphasized that the petitioner's charges were as per the agreed contract and the Company's allegations of overcharging were unfounded.

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