2015 (6) TMI 1248 - HC - Companies Law

Winding up of Company - restraint on company's Directors, Officers, Agents and Servants from disposing of the movable and immovable properties of the Company during the pendency and final disposal of this petition - HELD THAT - From the facts and circumstances of the present case, it emerges that the invoices and ledger accounts were also produced for the materials supplied from time to time to the respondent company by the petitioner. The petitioner issued the statutory notice on 5.8.2013, which is duly served to the respondent company. Though the said notice was received by the respondent, no reply was given by the respondent and no payment was made as stated by the petitioner, and therefore, as per the provisions of the Companies Act, the respondent company shall be deemed to be unable to pay the debts. From the dispute raised by the respondent-company it can be said that such dispute is nothing but an after thought, and therefore, this court is of the opinion that the same cannot be termed as bonafide and reasonable dispute - this Court is left with no option, but to admit this petition - Petition admitted.

Summary

Issues:
Petition for winding-up under Companies Act, 1956 based on outstanding dues - Dispute regarding payment obligation and genuineness - Appointment of provisional liquidator - Restraining respondent from disposing of assets - Publication of advertisement.

Analysis:
The petitioner filed a petition under sections 433 and 434 read with section 439 of the Companies Act, 1956, seeking the winding-up of the respondent company due to outstanding dues. The petitioner, engaged in manufacturing and dealing in products, supplied goods to the respondent based on assurances of payment by the company's directors. Despite initial payments, the respondent failed to clear the outstanding amount, leading to the issuance of a statutory notice which remained unanswered. The respondent's cheques for settlement were dishonored, indicating financial strain.

The respondent, through its advocate, contended that it is a going concern engaged in trading in building materials with a stable financial scenario, disputing the petitioner's claim of supplying goods. The respondent argued that the invoices were issued for financing purposes only and not for actual sales, denying any obligation to pay the alleged dues. The respondent maintained that the dispute raised was genuine and the petition should be dismissed.

After considering arguments and reviewing the evidence, the Court found that the respondent's dispute was an afterthought and not genuine. The Court concluded that the respondent failed to pay its debts, rendering it unable to pay as per the Companies Act. Consequently, the petition was admitted, and the Official Liquidator was appointed as the provisional liquidator to take custody of the company's assets. The respondent was restrained from disposing of its properties, and an advertisement about the petition's admission was directed to be published in specified newspapers. The hearing was scheduled for a later date, emphasizing the seriousness of the matter and the need for legal proceedings to address the financial dispute effectively.