2018 (3) TMI 420 - HC - Companies Law

Winding up - Held that - Petitioner s entire claim in this application for the principal sum of ₹ 25,31,990.75/-, as mentioned in the notice dated September 03, 2016 is deemed to have been admitted by the company. In this application filed in the month of November, 2016 the petitioner has not disclosed any agreement entitling it to claim interest on account of unpaid bills. The petitioner is entitled to receive interest on account of the unpaid bills at the rate of 6%, p.a. from the month of December 20, 2016. As far as the defect pointed out that the petitioner has filed this application by taking out a notice of motion, the same is a matter of procedure. It is settled law that the procedure is the handmaid of justice and the defect in this application is cured by directing the petitioner to pay costs assessed at ₹ 10,000/- to the State Legal Services Authority. Subject to payment of costs by the petitioner, as directed above within December 18, 2017, the winding up application is admitted for ₹ 25,31,990/-, together with interest thereon at the rate of 6% from the month of December, 2016. If, the company pays the amount of ₹ 25,31,990/- together with interest thereon at the rate of 6% from the month of December, 2016 to the petitioner within January 15, 2018, the winding up application shall stand permanently stayed. In the event of any failure on the part of the company to pay the said amount within the time frame mentioned above, the petitioner will cause advertisement in the Bengali newspaper, Bartaman and English newspaper, The Statesman .

Issues: Application for winding up of the company under Section 433(e) of the Companies Act, 1956 due to non-payment of dues.

Detailed Analysis:
1. Non-Payment of Dues and Application for Winding Up: The petitioner filed an application under Section 433(e) of the Companies Act, 1956 for winding up the company due to non-payment of its dues amounting to ?31,76,295.68. Despite being served with the petition and given opportunities, the company did not file an affidavit-in-opposition.

2. Contentions Regarding Notices Issued: The company argued that it is liable to pay ?17,64,828 to the petitioner and is willing to pay in instalments, mentioning discrepancies in the amounts claimed in the notices issued under Section 434 of the Act of 1956. However, the petitioner clarified the errors in the first two notices and claimed the actual outstanding amount in the third notice dated September 3, 2016.

3. Admission of Dues and Interest Claim: The company had accepted bills from the petitioner without objection, admitted the obligation to pay ?17,64,828.60, but failed to do so. The petitioner claimed interest at 18% per annum on the outstanding dues. Due to the company's failure to respond or file an affidavit-in-opposition, the court deemed the petitioner's claim for the principal sum of ?25,31,990.75 as admitted.

4. Granting of Interest and Procedural Matters: The court, considering the facts, awarded interest at the rate of 6% per annum from December 20, 2016, on the unpaid bills. The court also addressed the procedural defect of filing the application through a notice of motion, stating that the defect is curable by directing the petitioner to pay costs of ?10,000 to the State Legal Services Authority.

5. Decision on Winding Up Application: Subject to the payment of costs by the petitioner, the court admitted the winding-up application for ?25,31,990, along with interest at 6% from December 2016. If the company pays the due amount and interest by a specified date, the winding up application will be permanently stayed; otherwise, the petitioner can cause advertisements in newspapers, setting a returnable date for the application before the court.

6. Final Directions: Urgent certified website copies of the order were to be provided to the parties upon compliance. The judgment provided a clear timeline for payment by the company and outlined the consequences of non-compliance, ensuring a fair opportunity for resolution before further legal actions.

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