2018 (8) TMI 1538 - HC - Companies Law

Winding up petition - dues payable to the petitioner - Held that - The petitioner has placed on record an email dated 22.12.2014 whereby the petitioner has pointed out regarding an outstanding amount of ₹ 1,03,93,398/- to the respondent. The respondent has replied on the same date stating that once the cheques are ready intimation will be sent to the petitioner. Hence, there is no denial of the dues payable to the petitioner. Similarly, learned counsel for the petitioner has relied upon an exchange of whatsapp message which was sent on 17.11.2014 where the reply was received on 17.11.2014 stating that the work will be taken care of. Again there is no denial of the dues of the petitioner. No communication or document is sought to be placed on record whereby the respondent in the past had informed the petitioner of its failure to comply with the terms and conditions of the purchase order. There is not even one document place on record to show that the petitioner were informed that they have failed to adhere to the terms and conditions of the purchase orders or that the work being performed by them is defective. In fact what the learned counsel for the respondent has relied upon is a communication dated 31.07.2014 allegedly written by the respondent regarding some defects. This communication has been attached by the petitioner themselves. This is the solitary communication which shows some defects were there in the work done by the petitioner. Presumably, the work would have been completed by the petitioner as there is no subsequent correspondence. Clearly, the defence raised is not bona fide. Today in the course of submissions that were made by the learned counsel for the respondent, she did not deny that no work has been done by the petitioner. Her plea was that some work had been done by the petitioner and there were some defects in the work that was done. Based on this she pleaded that some amount may be payable to the petitioner but the same is not quantifiable. Much stress was also laid by the respondent on the fact that there are two different amount being claimed by the petitioner, namely, the outstanding amount of ₹ 1,03,93,398/- and another amount claimed as due was ₹ 53,66,278/-. Learned counsel for the petitioner had tried to explain away the said differences stating that as there was delay in clearance of the bills by the respondent, on the request of the respondent, a bill for ₹ 58,66,278/- was raised on a sister concern which was said to have funds to pay dues. It is manifest that some amount does remain payable by the respondent to the petitioner. I admit the present petition. However I defer appointing the OL as the PL till the next date of hearing. In the meantime, the respondent is free to deposit a sum of ₹ 53,66,278/- within four weeks from today with the Registrar General of this Court. If such amount is deposited the petitioner would be free to have the said amount released

Summary

Issues:
1. Petition filed seeking winding up of respondent company under Companies Act, 1956.
2. Dispute over outstanding payment for outdoor advertisement services provided by petitioner.
3. Allegations of non-compliance with service agreements and defective work by petitioner.
4. Defense raised by respondent disputing the claimed dues.
5. Examination of communications and documents to determine liability for outstanding amount.
6. Legal arguments presented by both parties regarding the disputed amount.
7. Application of legal precedent on disputed debt in winding up proceedings.

Issue 1: Petition for Winding Up
The petitioner filed a petition under sections 433(e), 434(a) read with section 439(b) of the Companies Act, 1956 seeking to wind up the respondent company due to non-payment of an outstanding amount of ?1,01,38,691 for outdoor advertisement services provided by the petitioner. The petitioner claimed to have completed the work to the satisfaction of the respondent between July 2014 and November 2014 but alleged non-payment despite repeated requests and legal notice.

Issue 2: Dispute Over Outstanding Payment
The respondent disputed the outstanding amount, alleging that the petitioner failed to provide services as per agreements and used materials not in accordance with the agreed terms. The respondent denied liability based on the alleged non-compliance with service agreements and the quality of the advertising materials used, contending that the petitioner did not fulfill the terms of the agreement.

Issue 3: Allegations of Non-Compliance and Defective Work
The respondent argued that the work done by the petitioner was defective and that the petitioner failed to adhere to the terms and conditions of the purchase orders. The respondent suggested that a civil suit would be a more appropriate remedy for the petitioner to claim any dues, citing a judgment in a similar case to support their position.

Issue 4: Defense Raised by Respondent
The respondent vehemently denied the claimed dues, asserting that the amount was bonafidely disputed. The respondent highlighted alleged defects in the work carried out by the petitioner and emphasized that the petitioner's claims were not quantified. The respondent contended that while some amount might be payable, it was not accurately determined, suggesting that a civil suit would be the suitable course of action for resolving the dispute.

Issue 5: Examination of Communications and Documents
The court examined various communications and documents presented by both parties, including emails and WhatsApp messages, to ascertain the liability for the outstanding amount. The petitioner relied on correspondence indicating the outstanding dues, while the respondent pointed to alleged defects in the work done by the petitioner as a basis for disputing the claimed amount.

Issue 6: Legal Arguments Presented
Both parties presented legal arguments supporting their positions on the disputed amount. The petitioner emphasized communications indicating the outstanding dues, while the respondent focused on alleged defects in the work performed by the petitioner and the lack of adherence to the terms of the agreements as reasons for disputing the claimed amount.

Issue 7: Application of Legal Precedent
In light of the legal position on disputed debts in winding up proceedings, the court admitted the petition but deferred appointing the Official Liquidator pending further proceedings. The court directed the respondent to deposit a specific sum within a specified timeframe, allowing the petitioner to claim the amount and indicating that further civil proceedings could be pursued to address any additional dues sought by the petitioner.

The judgment addressed the core issues of the petition for winding up, the dispute over outstanding payment, allegations of non-compliance and defective work, the defense raised by the respondent, examination of communications and documents, legal arguments presented, and the application of legal precedent in determining the liability for the outstanding amount. The court admitted the petition but deferred the appointment of the Official Liquidator, providing an opportunity for the respondent to deposit a specific sum to resolve the immediate claim while allowing for further civil proceedings to address any additional dues.