2018 (9) TMI 596 - HC - Companies Law

Winding up petition on the ground that the company is unable to pay its debts - bona fide defence to the claim of the petitioner - Held that - Company has failed to make out any bona fide defence to the claim of the petitioner in this application. Accordingly, this winding up application against the company is admitted for a sum of ₹ 1,74,65,867/- with interest thereon, at the rate of seven per cent (7%) , per annum from the date of receipt of the statutory notice dated March 15, 2016 till the date of payment. The company is directed to pay the said principal amount of ₹ 1,74,65,867/-, together with interest to the petitioner by eight equal monthly instalments. By the first seven equal monthly instalments the company shall pay the principal amont of ₹ 1,74,65,867/- and by the last instalment the company shall pay the interest amount to the petitioner. The first of such instalments shall be paid by the company to the petitioner, within August 31, 2018 and the subsequent instalments shall be paid to the petitioner within the 10th day of each succeeding month. In the event of any failure on the part of the company to pay any one of the above instalments within the time stipulated above, the petitioner shall be free to advertise this application once in the English newspaper, The Statesman and once in the Bengali newspaper, Bartaman . In the said notices the petitioner shall mention that the application shall appear before this Court on the first Monday, after four weeks from the date of publication thereof.

Summary

Issues:
1. Application under Section 433(e) of the Companies Act, 1956 for winding up of a company on the ground of inability to pay debts.
2. Dispute regarding outstanding dues for coal supplied by the petitioner to the company.
3. Allegations of defective and short supply of coal by the company.
4. Company's defense based on alleged lack of knowledge of the officer issuing the account confirmation.
5. Failure of the company to reply to statutory notice under Section 434 of the Act of 1956.

Analysis:
1. The petitioner filed an application for winding up the company under Section 433(e) of the Companies Act, 1956, citing the company's inability to pay its debts. The petitioner supplied coal to the company between April 2013 and July 2015, for which outstanding dues of ?1,74,65,867 were acknowledged by the company in an account confirmation statement. Despite the petitioner's requests, the company did not make the payment, leading to the winding-up application.

2. The company alleged defective and short supply of coal through various letters between February 2012 and May 2013. It claimed an entitlement of ?2,86,00,000 along with interest due to production loss caused by delayed coal supply. However, the petitioner denied these allegations and reiterated its claim based on the account confirmation statement provided by the company.

3. The petitioner contended that the defense put forth by the company regarding the officer's lack of knowledge while issuing the account confirmation was unfounded. The company failed to demonstrate any error in the document or provide evidence of operational losses suffered due to delayed coal supply. The petitioner argued that the company's allegations were aimed at delaying payment rather than presenting a genuine defense.

4. The court found that the company's defense lacked merit as it had voluntarily issued the account confirmation without subsequent objections. The court also noted that the company's failure to reply to the statutory notice created a presumption of admission of the petitioner's claim, citing legal precedent to support this view.

5. Consequently, the court admitted the winding-up application against the company for the outstanding amount of ?1,74,65,867 with interest. The company was directed to make payments in eight equal monthly installments, failing which the petitioner could advertise the application in newspapers. The judgment emphasized the company's failure to provide a bona fide defense, leading to the admission of the winding-up application.

This comprehensive analysis highlights the key legal arguments, defenses, and the court's reasoning in the judgment delivered by the Calcutta High Court.