2017 (4) TMI 931 - HC - Companies Law

Winding up petition - whether the petitioner-Company, and the respondent-Company have initially entered into a Marketing Budget, which was duly approved by the Chief Financial Officer, and the respondent-Company or not? - Held that - Admittedly, on 30.3.2016, the petitioner-Company had sent a statutory notice to the respondent-Company. In Para-5 of the said notice, the petitioner-Company h ad claimed that the respondent-Company owe them an amount of ₹ 1,63,06,154/- as on 8th of May 2014. The said para has been denied specifically by the respondent-Company in its reply dated 10th of May 2016. The respondent-Company, has denied that the payment of ₹ 70 lakhs was part payment of the alleged amount of ₹ 2,33,06,154/-. It further claimed that the payment of ₹ 70 lakhs was, in fact, full and final payment of the amount owed by the respondent-Company to the petitioner-Company. Therefore, it further denied the fact that on 8th of May 2014, an amount of ₹ 1,63, 06,154/- was owed by the respondent-Company to the petitioner-Company. Since the denial is an absolute one, since the denial has been made in reply to the statutory notice issued by the petitioner-Company, the learned counsel for the petitioner is unjustified in claiming that denial is an after-thought. Considering the fact that respondent-Company has denied that it owes any debt to the petitioner-Comp any, considering the disputed questions of fact which are involved in the present case, naturally the present winding up petition is not maintainable before this Court. In the present case, since evidence, both oral and documentary, needs to be led in order to decide the disputed questions of fact mentioned herein above, clearly the winding up petition is not the proper remedy

Issues:
1. Maintainability of the winding-up petition.
2. Existence of a debt owed by the respondent-Company to the petitioner-Company.
3. Admissibility of the two cheques issued by the respondent-Company.
4. Disputed questions of fact regarding the alleged debt.

Issue 1: Maintainability of the winding-up petition

The petitioner filed a winding-up petition under Sections 433(e) & (f) read with Section 434(1)(a) and 439(1)(b) of the Companies Act, seeking to wind up the respondent-Company due to outstanding debts. The respondent-Company contested the petition's maintainability, arguing that no debt was owed as claimed by the petitioner. The respondent-Company denied any liability and disputed the existence of the alleged debt, emphasizing that the petition was unnecessary and a civil suit would suffice. The court considered the disputed facts and ruled that the winding-up petition was not maintainable due to the lack of admitted debt and the need for a regular trial to resolve the conflicting claims.

Issue 2: Existence of a debt owed by the respondent-Company

The petitioner claimed that the respondent-Company owed a substantial amount for services rendered, supported by invoices totaling ?2,33,06,154. Despite partial payments made by the respondent-Company, a significant balance remained unpaid. The respondent-Company disputed the debt, contending that the payments made were sufficient to clear the alleged dues. The court noted the conflicting claims and the respondent's denial of the debt, leading to the dismissal of the winding-up petition due to the absence of established debt.

Issue 3: Admissibility of the two cheques issued by the respondent-Company

The petitioner highlighted that the respondent-Company issued two cheques as part of the payment, which were later dishonored due to insufficient funds. The respondent-Company argued that the cheques were given before the payment of a significant sum and accused the petitioner of misusing the cheques. The court considered the circumstances surrounding the cheques but concluded that their issuance did not constitute an admission of the debt owed, contributing to the decision to dismiss the winding-up petition.

Issue 4: Disputed questions of fact regarding the alleged debt

The court analyzed the conflicting claims regarding the alleged debt, emphasizing the respondent-Company's categorical denial of owing any outstanding amount. The petitioner's contentions were countered by the respondent's consistent denial and the lack of concrete evidence supporting the debt claim. The court referred to previous judgments to underscore the necessity of a civil suit for resolving such disputed factual issues, ultimately leading to the dismissal of the winding-up petition.

In conclusion, the court dismissed the winding-up petition due to the absence of an admitted debt, disputed factual contentions, and the need for a regular trial to ascertain the veracity of the claims made by the parties involved. The judgment underscored the importance of resolving disputed questions of fact through a civil suit rather than a winding-up petition, aligning with established legal principles and precedents.

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