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2016 (8) TMI 919 - HC - Companies LawWinding up Petition - time barred petition - Held that - Find considerable force that the claim made in the present Petition, Prima facie would appear to be barred by the law of limitation. It is not in dispute that the supplies of these machineries took place between the period of 10th June, 2008 to 25th February, 2009. Even, if where to go by the credit period mentioned in the third purchase order (being a period of 730 days), the Respondent Company was required to make payment by 24th February, 2011. The period of limitation of 3 years would start from this date. Admittedly, the present Company Petition has been lodged on 31st July, 2014. This would clearly be beyond the period of 3 years and, therefore, the claim on the face of it would appear to be time barred. Respondent Company has done an internal audit which would reflect that even under the third purchase order, as many as 37 machines were not working. It is also the case of the Respondent Company, that there was a serious delay in supplying the machines, which has caused great loss to the Respondent Company by virtue of the fact that they lost the security deposit on premises that they had taken on leave and licence in which these machines where to be housed. Looking to all these factors, I do not think, that this is a case where the debt of the Petitioner is undisputed. To my mind, there is a bonafide dispute raised by the Respondent Company. In these circumstances, thus have no hesitation in dismissing this Company Petition.
Issues Involved:
1. Company petition filed against the Respondent Company for non-payment of debts. 2. Dispute regarding the supply of gaming machines and non-payment by the Respondent. 3. Statutory notice issued under Section 434 of the Companies Act, 1956. 4. Defense raised by Respondent on the grounds of limitation and disputed debt. 5. Admissibility of the Company Petition and subsequent dismissal. Detailed Analysis: Issue 1: Company petition filed against the Respondent Company for non-payment of debts The Petitioner filed a Company Petition against the Respondent Company, claiming non-payment of debts amounting to JPY 64,516,217 (Japanese Yen). The Petitioner supplied gaming machines to the Respondent on credit, and despite issuing invoices and pre-inspection certificates, full payment was not made by the Respondent. Issue 2: Dispute regarding the supply of gaming machines and non-payment by the Respondent The Petitioner contended that the Respondent made partial payment for one invoice but failed to pay the balance for subsequent invoices. The Respondent raised issues regarding defects in the supplied machines and non-compliance with previous purchase orders, leading to a counterclaim of approximately 15 Crores against the Petitioner. Issue 3: Statutory notice issued under Section 434 of the Companies Act, 1956 Upon non-payment and default by the Respondent, the Petitioner issued a statutory notice under Section 434 of the Companies Act, 1956, demanding payment of dues. Despite serving the notice, the Respondent did not respond or comply with the requisitions, leading to the filing of the Company Petition. Issue 4: Defense raised by Respondent on the grounds of limitation and disputed debt The Respondent argued that the claim in the Company Petition was time-barred due to the law of limitation, as the period for payment had lapsed. The Respondent also disputed the liability by highlighting defects in the supplied machines and delays in delivery, leading to financial losses. Issue 5: Admissibility of the Company Petition and subsequent dismissal The Court found merit in the Respondent's defense regarding limitation and disputed debt. The Court noted that the debt claimed was genuinely disputed, with evidence of defective machines and financial losses suffered by the Respondent. As a result, the Court dismissed the Company Petition, allowing the Petitioner to pursue recovery through civil court proceedings while excluding the time spent on the Company Petition from the limitation period. This detailed analysis covers the key issues involved in the legal judgment, highlighting the arguments presented by both parties and the Court's decision regarding the admissibility and dismissal of the Company Petition.
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