2016 (5) TMI 644 - HC - Companies Law

Winding up - whether there is a bona fide dispute as regards the rest of the consignment in respect whereof the respondent makes its claim - Held that - As there is no bona fide dispute, there is no question of directing the respondent to repay the amount. Thus, in view thereof, while the respondent is entitled to retain the amount, the petition is liable to be dismissed on account of the appellant having satisfied the respondent s claim to the extent mentioned in the impugned order. The invoices do not provide for interest. Nor is there any other document or agreement that provides for interest. However, the respondent claimed interest albeit for the first time by the statutory notice @ 24% per annum. We are, however, not inclined to enter into the question as to whether the appellant is also liable to pay interest to the respondent. The learned Company Judge has not referred to the issue of interest. Further, the respondent has neither sought a clarification from the learned Judge regarding the quantum to be paid by the appellant to the respondent nor filed an appeal on the ground that the learned Judge has not taken into consideration the element of interest. The question of interest is, therefore, kept open. In the circumstances, the appeal is dismissed and the respondent shall be entitled to retain the amount paid pursuant to the order dated 24.12.2015. It is clarified that in view of this payment, the petition itself does not survive. This is, however, without prejudice to the respondent s contention regarding interest which may be claimed either by way of an application for clarification before the learned Judge or by way of an appeal or by any other proceedings.

Summary

Issues:
1. Admission of winding up petition by the Company Judge.
2. Dispute regarding quality of goods and payment of dues.
3. Legal question on maintainability of winding up petition under Sections 433 and 434 of the Companies Act, 1956.
4. Specification of the appellant's liability by the Judge.
5. Claim for interest by the respondent.

Issue 1: Admission of winding up petition by the Company Judge
The respondent filed a winding-up petition against the appellant, claiming non-payment of dues for goods supplied. The Company Judge ordered the petition to be admitted if the dues were not settled by the respondent.

Issue 2: Dispute regarding quality of goods and payment of dues
The appellant admitted receiving and using the goods but disputed their quality, claiming a credit for defective goods returned. However, the Court found no bona fide dispute as the appellant failed to prove further defects or damages caused by the goods.

Issue 3: Legal question on maintainability of winding up petition
The appellant argued that a winding-up petition is maintainable only if the debt is admitted by the company. The Court rejected this, stating that the test is the presence of a bona fide dispute, not admission of debt, to determine the petition's maintainability.

Issue 4: Specification of the appellant's liability by the Judge
The Judge did not specify the exact amount owed by the appellant in the operative part of the order but referenced it in the body of the judgment. The appellant was granted time to settle the accounts, which was done before the deadline.

Issue 5: Claim for interest by the respondent
The respondent claimed interest on the unpaid amount, but the Court did not address this issue explicitly. The question of interest was left open for further clarification or appeal by the respondent.

In conclusion, the Court dismissed the appeal as there was no bona fide dispute regarding the dues. The respondent was allowed to retain the paid amount, and the petition was dismissed without prejudice to the interest claim. No costs were awarded in the case.