2018 (2) TMI 1502 - HC - Companies Law

Winding up petition - whether any bona fide dispute or debate was raised by the appellant - Held that - We believe that the appellant has been marking time and delaying payment. As per acknowledgment in the statement of accounts dated 8th January, 2014, ₹ 12,00,155/- was due and payable. No payment has been made since then. Interest on the said amount would be due and payable. The reply to the company petition was filed belatedly after 222 days. Costs imposed vide order dated 22nd July, 2016 was not paid for nearly a year, when the impugned order dated 24th May, 2017 was passed. There was also non-compliance of the order dated 22nd July, 2016, as affidavits enclosing therewith relevant information and documents were not filed. Order dated 19th January, 2017 had directed the Managing Director to be present, failing which, the Court would be constrained to take coercive steps. This was also noticed in the impugned order. Admittedly, the Managing Director of the appellant company was not present. It is stated that Jatinder Singh Bagga and his son Shiv Karan Bagga are Directors of the appellant company and Shiv Karan Bagga has suffered kidney failure. We can understand the difficult and hard times being faced, but we cannot accept repeated and prolonged failure on the part of the appellant company and its Directors to file reply, and then comply with the orders. Court proceedings are not to be taken lightly. In these circumstances, we are not inclined to issue notice in the present appeal and the same is dismissed. However, the dismissal would not mean that the appellant cannot approach the Company Judge with payment towards principal amount, interest and cost. Of course, compliance by filing affidavit etc. should be also made.

Summary

Issues:
1. Impugned order admitting company petition and appointing Provisional Liquidator.
2. Non-compliance with court orders and failure to pay imposed costs.
3. Dispute regarding outstanding amount and non-payment of dues.
4. Delay in filing reply to winding up petition and non-compliance with court directions.
5. Directors' failure to file necessary affidavits and attend court proceedings.

Analysis:
1. The judgment concerns the impugned order admitting a company petition and appointing a Provisional Liquidator to take over assets, books of accounts, and records. The order also directed the appellant to furnish details of directors and assets to the Official Liquidator. The appellant challenged this order, citing incomplete filing and non-enclosure of relevant documents initially.

2. The appellant faced issues due to non-compliance with court orders and failure to pay imposed costs. The Company Judge had imposed costs for delay in filing a reply to the winding up petition, which the appellant did not pay despite multiple opportunities. Additionally, the appellant failed to file required affidavits as directed by the court.

3. The judgment delves into a dispute over outstanding dues and non-payment by the appellant. The winding up petition highlighted bills for services rendered, acknowledging a significant amount due. The appellant disputed certain aspects of the charges but failed to provide a satisfactory defense, leading the court to reject their claims and emphasize the due payment.

4. The court noted the appellant's delay in filing a reply to the winding up petition, indicating a lack of bona fide dispute in their defense. The appellant's attempts to dispute the acknowledged dues were deemed insincere, with the court emphasizing the need for timely and truthful responses in legal proceedings.

5. Lastly, the judgment addresses the directors' failure to fulfill their obligations, including filing necessary affidavits and attending court proceedings. Despite citing personal difficulties, the court emphasized the importance of compliance with court orders and timely resolution of financial obligations. The dismissal of the appeal was based on the appellant's prolonged non-compliance and failure to address the outstanding dues effectively.