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2012 (4) TMI 221 - HC - Companies LawWinding up Petition - respondents are unable to pay their admitted debts and as such are liable to be wound up - the petitioner stated that the respondent did not pay the amount due but in this regard issued a confirmation letter respondent contented that the confirmation is not to the effect that the respondent-company is due to pay the said amount - the respondent-company stated that the Iron ore Fines delivered is not due to the bilateral contract between the petitioner and respondent-company but also the role of other parties have relied on the agreement entered into between the respondent company and DMRIPL and the petitioner is not a party to the said agreement - the investment ratio as contended at 80 20 by the respondent-company and DMRIPL and with regard to the payment terms by the buyer and the investment of respondent against realisation from export sales Held that - Though the petitioners have placed heavy reliance on the purchase order, invoice and the confirmation of balance and documents relied on by the respondent-company and also keeping in view that the documents relied upon by the respondent-company would indicate the involvement of other parties in the transaction, who are not respondents in the instant petition the dispute requires detailed investigation of facts and evidence so as to understand the terms and conditions agreed to between the parties relating to the transactions winding up application cannot be allowed.
Issues Involved:
1. Whether the respondent is liable to pay the petitioner the amount of Rs. 4,78,72,182/- for the supply of Iron Ore Fines. 2. Whether the respondent's defense regarding the involvement of a third party (DMRIPL) is valid. 3. Whether the winding-up petition is maintainable based on the alleged debt. Issue-wise Detailed Analysis: 1. Liability for Payment: The petitioner claims that the respondent owes Rs. 4,78,72,182/- for the supply of 20,000 WMT of Iron Ore Fines as per the purchase order dated 12-02-2009 and the invoice dated 15-09-2009. The petitioner alleges that the respondent acknowledged this debt through a confirmation letter dated 03.05.2010 and subsequent correspondence. However, the respondent disputes this liability, stating that they act only as a facilitator in a back-to-back contract arrangement and that the actual transaction and payment responsibilities lie with DMRIPL, an Associate Shipper. 2. Involvement of Third Party (DMRIPL): The respondent explains their business model involving an 80:20 financing arrangement with DMRIPL, who is responsible for the procurement and export of the Iron Ore Fines. The respondent contends that the confirmation letter and the issuance of Form-H were for facilitating the transaction and not an acknowledgment of debt. They argue that the petitioner was aware of DMRIPL's involvement and that the actual transaction was between the petitioner and DMRIPL. The respondent supports this with various agreements and correspondence, including a tripartite agreement involving DMRIPL and Devi Trading Company Ltd., Hong Kong. 3. Maintainability of Winding-Up Petition: The court examines whether the respondent's defense is bona fide or merely a moonshine defense. It acknowledges the complexity of the transaction and the involvement of multiple parties, which necessitates a detailed investigation and adjudication beyond the scope of winding-up proceedings. The court refers to the Supreme Court's parameters in IBA Health (I) (P.) Ltd. v. Info-Drive Systems Sdn. Bhd., emphasizing that the dispute requires a thorough examination of facts and evidence. Conclusion: The court concludes that the dispute involves intricate details and the roles of various parties, which cannot be resolved in a winding-up proceeding. It suggests that the petitioner should seek adjudication before an appropriate forum to determine the actual liability. Consequently, the petition for winding up is dismissed, with the court noting that its observations are limited to the current proceedings and should not affect any future adjudication. Order: The petition is dismissed with no costs.
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