2018 (4) TMI 1249 - HC - Companies Law

Winding up petition - unable to pay the debt - limitation period - Held that - We cannot dismiss the stand taken by the company that petitioner has not even made out a prima facie case that there is a debt. So far as the issue of limitation is concerned, in the reminder letter dated 4th February 2015, copy whereof is at Exh. D to the petition, it is stated that petitioner had raised Thirty bills between 31st January 2011 to 29th September 2012 but the statement of outstanding annexed is only of 27 invoices. There have been three payments made by the company. Going in the reverse order, the payment made on 3rd December 2015 for ₹ 3,00,000/, according to company, is towards the last invoice dated 29th September 2012 which was for ₹ 3,30,000/and the payment made on 19th December 2015 for ₹ 1,65,000/was towards the 26th invoice mentioned in the list dated 19th July 2012 for ₹ 1,65,000/. The amount paid on 16th December 2014 of ₹ 2,56,779/if accepted as an adhoc payment, still some of the invoices raised will be barred by limitation. If one considers the statement of outstanding filed by petitioner, invoice at Sr.No.1 was due on 1st April 2011 and the invoice at Sr.No. 11 was due on 13th December 2011 and these payments have been made beyond the three years period. Therefore, we cannot dismiss the stand of respondent as moonshine since claims under the invoices may be barred by limitation and cannot conclude that there is a debt and company is unable to discharge its debt. - Petition dismissed.

Summary

Issues:
Petition for winding up of respondent-company on the ground of insolvency, failure to discharge debt, and necessity for winding up.

Analysis:
The petitioner filed a petition seeking the winding up of the respondent-company, alleging commercial insolvency and failure to discharge debts. The petitioner claimed that they provided transportation services to the company, issued invoices totaling to a specific amount, and received partial payments on different dates. As no further payments were made, the petitioner issued a statutory notice under Section 434 of the Companies Act, 1956. In response, the respondent did not reply to the notice but raised defenses in an affidavit, including the lack of annexed documents, non-certification of invoices, and the plea of limitation.

The Court noted that the petitioner did not file a rejoinder to address the respondent's defenses. The lack of annexed goods consignment notes and invoices raised doubts about the debt claim. The Court emphasized the importance of providing evidence that the company had accepted the services and invoices without objection. The Court highlighted that without sufficient proof of the transactions and acceptance by the company, the petitioner failed to establish a prima facie case of debt.

Regarding the issue of limitation, the Court analyzed the payment history and invoices. The Court observed discrepancies in the number of invoices mentioned in the reminder letter and the statement of outstanding invoices. Payments made by the company were linked to specific invoices, some of which might be time-barred. The Court concluded that certain claims under the invoices could be barred by limitation, further weakening the petitioner's case of commercial insolvency and inability to discharge debts.

Ultimately, the Court dismissed the petition for winding up the respondent-company, citing the petitioner's failure to substantiate the debt claim and address the limitation issue adequately. No costs were awarded in the judgment.