2011 (2) TMI 1273 - HC - Companies Law

Winding up - Petitioner firm had supplied certain goods to respondent-company and a sum was outstanding against respondent-company - However, respondent failed to pay amount due despite repeated demands - Petitioner, therefore, filed instant petition for winding up of respondent-company.

Summary

Issues:
Winding up petition under sections 433(e) & 434 of Companies Act, 1956.

Detailed Analysis:
1. The petitioner, a proprietary firm engaged in the trade of iron goods, filed a winding-up petition against the respondent company seeking recovery of outstanding dues amounting to Rs. 8,35,208 as on 30-9-2008. The respondent company, a private limited company incorporated in August 2005, failed to settle the accounts despite repeated requests and a legal notice sent under sections 433 & 434 of the Companies Act.

2. The court noted that the respondent company did not dispute the business dealings with the petitioner firm but failed to provide documentary evidence to support the claim that a certain amount had been settled. The court found that a significant amount of Rs. 5,18,963 remained due to the petitioner as of 24-6-2008.

3. The respondent company claimed that a settlement had been reached in the presence of witnesses, but the court observed discrepancies in the evidence provided. The court found no prima facie evidence to support the claim of a bona fide dispute regarding the outstanding dues, especially in the absence of documentary proof or credible witness statements.

4. The court emphasized that a winding-up petition is maintainable if the company fails to pay its debt, and the defense must be bona fide and likely to succeed in law. However, the respondent company failed to establish a bona fide defense, and its failure to pay the outstanding dues indicated an inability to meet its debt obligations.

5. Despite attempts at mediation, the dispute could not be resolved, leading the court to direct the respondent company to pay the outstanding amount of Rs. 5,18,963 within one month. Failure to comply would result in the company petition being advertised in newspapers and the government gazette as per the Companies (Court) Rules.