2018 (8) TMI 1615 - HC - Companies Law

Winding up petition - Held that - In the present case other than isolated 3-4 emails there is nothing on record to show what work the petitioner has done. I may refer to these emails which have been attached to the rejoinder. There is one email which is dated 19.9.2013 which is sent to the petitioner stating Dear Sir for your signatures (two copies) Similarly, there is another email dated 9.5.2013 written by Mr. Rahul Murzaria. There are number of such emails. These do not in any manner prima-facie show that the petitioner was gainfully employed in the period in question, namely, September 2012 to September 2013. What follows is that there is no written contract between the parties to show that the petitioner was employed or engaged as a Consultant for the period in question. Prima-facie, there is no meaningful document available to show any regular work being done by the petitioner. It would be for the petitioner to prove all these aspects in an appropriate Civil Court. The respondents have raised a bonafide dispute. However, in case the petitioner chooses to approach the civil court observations made herein would not in any manner bind the parties in such civil dispute that may be initiated. Petition is accordingly dismissed.

Summary

Issues:
Petition filed under sections 433(e) & (f), 434 and 439 of the Companies Act, 1956 for winding up of respondent company due to non-payment of dues to the petitioner.

Analysis:

Issue 1: Non-payment of dues to the petitioner
The petitioner, a senior managerial personnel, was engaged as a Consultant by the respondent company from July 2010 onwards. The petitioner's grievance was non-payment of dues from September 2012 to September 2013, despite an agreed consultancy fee of &8377; 4,75,000 per month. The respondent company allegedly stopped making payments due to financial difficulties faced by the IIPM Group of Companies. The petitioner claimed that only a partial payment was made in July 2013, and the remaining dues were unpaid.

Issue 2: Evidence of continued work by the petitioner
The petitioner presented various documents, including Form 26AS, blackberry messages with the Promoter, and emails exchanged with the respondent company, to prove continued engagement and pending payments. However, the senior counsel for the respondent contended that the petitioner had stopped working in August 2012 and all due payments were made. The respondent's reply to the legal notice did not deny non-payment but claimed the petitioner owed damages of &8377; 100,00,000.

Issue 3: Lack of written contract and evidence of work
The court noted the absence of a written contract between the parties for the petitioner's consultancy services. Despite some emails exchanged, there was no substantial evidence to demonstrate the nature and extent of work done by the petitioner during the period in question. The lack of documentation raised doubts about the petitioner's claim of continued employment and pending dues.

Judgment:
The court referred to the judgment in IBA Health (I) Pvt. Ltd. vs. Info-Drive Systems Sdn.Bhd., emphasizing that a substantial and genuine dispute must exist regarding the claimed debt before initiating winding-up proceedings. The court found that the respondent had raised a bona fide dispute regarding the petitioner's claims, suggesting that the matter should be resolved in a civil court to establish the petitioner's entitlement. Consequently, the petition for winding up was dismissed, and all pending applications were disposed of, leaving the parties free to pursue civil remedies for the dispute.