2016 (2) TMI 243 - HC - Companies Law

Winding up petition - Held that - On the basis of the material on record, the petitioner has succeeded, in primafacie establishing its case, especially, as the respondent-Company has not denied that it was liable to make the payment for the goods supplied by the petitioner which, according to it, was made to M/s.Unisilk Limited. Considering all the above aspects and as no material has been produced on record substantiating the claim of the respondent-Company regarding the mutual agreement between the parties to make the payment through M/s.Unisilk Limited, in the view of this Court, the petition deserves to be admitted. The Registry is directed to notify the present petition for final hearing on 10.03.2016. The admission of the petition shall be advertised in the English daily newspaper The Times of India , Ahmedabad Edition and the Gujarati daily newspaper, Jansatta , Ahmedabad Edition. The Official Liquidator attached to this Court is appointed as the Provisional Liquidator of the respondent-Company and is directed to take over the charge and possession of the assets of the respondent-Company and to prepare an inventory of the office premises, books of accounts and all other assets of the respondent-Company, as required. At this stage, a request is made by Mr.Niral Mehta, learned advocate for the respondent-Company that the petition may not be advertised for a period of two weeks. The request is granted in the interest of justice.

Issues Involved:
1. Petition for winding up under Sections 433, 434, and 439 of the Companies Act, 1956.
2. Alleged non-payment of dues by the respondent-Company.
3. Disputed defense by the respondent-Company regarding payment through M/s.Unisilk Limited.
4. Financial status and capability of the respondent-Company to pay its dues.
5. Appointment of Provisional Liquidator and related procedural directions.

Issue-wise Detailed Analysis:

1. Petition for Winding Up:
The petitioner, a company incorporated under the laws of Kenya, filed a petition under Sections 433, 434, and 439 of the Companies Act, 1956, seeking the winding up of the respondent-Company, Hiya Overseas Pvt. Ltd., due to its alleged inability to pay its debts. The petitioner requested the appointment of the Official Liquidator as the Liquidator of the respondent-Company and sought interim reliefs to restrain the respondent-Company from dealing with its assets.

2. Alleged Non-payment of Dues:
The petitioner claimed that it had exported goods to the respondent-Company, which had placed orders for various food grains. The petitioner raised invoices amounting to US$ 1,079,133, which were allegedly accepted by the respondent-Company. Despite repeated follow-ups, the respondent-Company failed to pay the outstanding amount. The petitioner served a statutory notice of demand on 01.04.2014, which was denied by the respondent-Company on 05.04.2014. The petitioner contended that the denial was unjustified and approached the court for winding-up proceedings, asserting that the respondent-Company was commercially insolvent.

3. Disputed Defense by the Respondent-Company:
The respondent-Company, in its affidavit-in-reply, claimed that payments for the transactions were made through M/s.Unisilk Limited, a company based in Hong Kong. The respondent-Company argued that it had made payments to M/s.Unisilk Limited, which was supposed to transmit the payments to the petitioner. The petitioner refuted this claim, stating that no such agreement was mentioned in the reply to the statutory notice and that the defense was an afterthought. The court noted that the respondent-Company's new defense was not substantiated by any material evidence and was inconsistent with its earlier stand.

4. Financial Status and Capability of the Respondent-Company:
The petitioner argued that the respondent-Company was in debt to the State Bank of India, which had issued public notices and initiated proceedings under the SARFAESI Act and RDDB Act. The petitioner claimed that the respondent-Company's assertion of being a profit-making unit was false. The court observed that the respondent-Company had not produced any balance sheets or financial statements to substantiate its claim of a turnover of rupees one hundred crores. The court found the respondent-Company's assertion of financial capability to be prima facie false.

5. Appointment of Provisional Liquidator and Procedural Directions:
The court admitted the petition and directed the Registry to notify the petition for final hearing on 10.03.2016. The court ordered the admission of the petition to be advertised in the English daily newspaper "The Times of India" and the Gujarati daily newspaper "Jansatta." The Official Liquidator attached to the court was appointed as the Provisional Liquidator of the respondent-Company and was directed to take over the charge and possession of the assets, prepare an inventory of the office premises, books of accounts, and other assets. The court granted a request by the respondent-Company's counsel to delay the advertisement of the petition for two weeks in the interest of justice.

Conclusion:
The court found that the petitioner had prima facie established its case, noting the respondent-Company's failure to substantiate its defense regarding payment through M/s.Unisilk Limited. The court admitted the petition for winding up and appointed the Official Liquidator as the Provisional Liquidator, directing necessary procedural steps to be taken.

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