2018 (1) TMI 773 - HC - Companies Law

Winding up proceedings - bonafide dispute - Held that - From perusal of the above communication that firstly it is in reply to the communication dated 01.04.2009 sent by the petitioner. In the letter dated 01.04.2009, the petitioner is again asking for balance 50 per cent dues plus additional amount for other services. Interest has also been sought for the delayed payment. The respondent has categorically denied that the said amount does not match their books of accounts. On a plain reading of the said communication it is manifest that they have disputed the said dues of the petitioner. The respondent has been able to raise a bona fide dispute about the liability of the respondent to pay the said amount. There is no merit in the present petition. Accordingly, the present petition is dismissed. It is however clarified that nothing said herein will in any manner tantamount to prejudice the case of the petitioner in case the petitioner chooses to start any alternate proceeding as per law.

Summary

Issues:
1. Petition for winding up of respondent company under Sections 433(e), 434(a), and 439(a) of the Companies Act, 1956.
2. Dispute regarding consultancy fees payment and limitation period.
3. Validity of consultancy agreement and disputed dues.
4. Communication denying liability and disputed debt.
5. Bona fide dispute over payment leading to the dismissal of the winding-up petition.

Issue 1: Petition for Winding Up
The petitioner filed a petition seeking winding up of the respondent company under relevant sections of the Companies Act, 1956, based on non-payment of consultancy fees.

Issue 2: Dispute over Consultancy Fees Payment and Limitation Period
The petitioner claimed non-receipt of the balance 50% of consultancy fees despite completing services. The respondent alleged the claim was time-barred, citing the agreement's expiration in 2008 and disputed the interest calculation from 2004-2005. The court noted the disputed facts and the necessity of adjudication on limitation.

Issue 3: Validity of Consultancy Agreement and Disputed Dues
The agreement stipulated payment of the balance 50% against received stage payments. The petitioner invoiced for the balance amount in 2013, seeking interest from 2004. The respondent disputed the dues, citing non-performance by the petitioner and lack of payment obligation.

Issue 4: Communication Denying Liability and Disputed Debt
A communication from the respondent in 2009 disputed the dues and additional services claimed by the petitioner. The court noted the petitioner's denial of receiving this communication, leading to a dispute over liability and the limitation period.

Issue 5: Bona Fide Dispute Over Payment
Citing legal precedents, the court emphasized that a winding-up petition is not a means to enforce disputed debts. The respondent raised a bona fide dispute over the liability to pay the amount, leading to the dismissal of the petition without prejudice to the petitioner's rights to pursue alternate legal remedies.

This detailed analysis covers the issues raised in the judgment, including the dispute over consultancy fees payment, limitation period, validity of the agreement, communication denying liability, and the court's decision based on the bona fide dispute over payment.