2011 (9) TMI 739 - HC - Companies Law

Petition for winding up of companies - on the ground that it failed to discharge its liability to a tune of Rs. 1, 57, 01, 080 - The petitioner abruptly stopped the installation and erection works of the transformer and thereby caused much delay in the expansion programme which caused great loss and irreparable damage to the respondent-company - It is to be noted that there are two indents emanating from the respondent-company - One is purchase order and another is work order - Though the respondent-company pleaded that it paid some more amount other than Rs. 45, 55, 000 it has not placed any material on record to substantiate the same - Exchange of e-mails between the parties clearly establish that the respondent-company accepted its liability to pay Rs. 1, 57, 01, 080 towards the value of the transformer supplied by the petitioner - It is well-settled that the power to order winding up of a company is contained under the Companies Act and is conferred on the court. Winding up and arbitration clause - held that - Existence of arbitration clause is not a ground to dismiss the application seeking an order of winding up of the respondent-company. - Accordingly the company petition is admitted

Issues Involved:
1. Failure to discharge liability.
2. Dispute over the installation and commissioning of the transformer.
3. Invocation of arbitration clause.
4. Bona fide dispute over debt.
5. Admission of winding up petition.

Detailed Analysis:

Failure to discharge liability:
The petitioner, Areva T and D India Ltd., filed a company petition under sections 433(e), (f) and 439(c) of the Companies Act, 1956, for winding up Bheema Cements Ltd. due to non-payment of Rs. 1,57,01,080. The petitioner supplied a transformer based on a purchase order dated May 26, 2008, and received partial payments, leaving an outstanding balance. Despite repeated requests and a statutory notice, the respondent failed to clear the dues, leading to the petition for winding up on grounds of commercial insolvency.

Dispute over the installation and commissioning of the transformer:
The respondent did not dispute the supply of the transformer but claimed that the petitioner abruptly stopped installation and commissioning, causing delays and losses. The respondent argued that the petitioner agreed to take back the transformer during a meeting on July 21, 2010, but failed to do so, rendering the petitioner's claim invalid. However, the petitioner clarified that the purchase order and work order were distinct, and the amounts claimed were related to the purchase order only.

Invocation of arbitration clause:
The respondent contended that the petition was premature due to the petitioner's invocation of the arbitration clause in the work order. The petitioner had issued a legal notice on February 26, 2011, invoking arbitration for disputes related to a separate work order. The court noted that the arbitration clause pertained to a different contract and did not affect the petition related to the purchase order.

Bona fide dispute over debt:
The court examined whether the debt was bona fide disputed. The respondent had acknowledged the debt in an e-mail dated September 14, 2009, expressing gratitude for the supplies and attributing payment delays to banking issues. The court found that the respondent's plea of additional payments was unsubstantiated. The court emphasized that a winding-up petition is not a legitimate means to enforce payment of a bona fide disputed debt. The respondent's defenses were deemed moonshine, and the debt was not considered bona fide disputed.

Admission of winding up petition:
The court held that the petitioner's claim was not disputed genuinely and that the respondent's failure to pay the admitted amount constituted a prima facie ground for admitting the winding-up petition. The existence of an arbitration clause did not preclude the court's jurisdiction to order winding up. The petition was admitted, and the petitioner was directed to advertise the admission in specified newspapers.

Conclusion:
The court concluded that the petitioner had established a prima facie case for winding up due to the respondent's failure to pay the admitted debt. The defenses raised by the respondent were not bona fide, and the arbitration clause did not affect the court's jurisdiction. The petition was admitted, and further proceedings were scheduled.

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