2018 (9) TMI 1083 - HC - Companies Law

Winding up petition - Held that - Debt more than the statutory amount mentioned in Section 434 is due and respondent company is unable to pay the debt and there is nothing to indicate that debt is bonafidely disputed, hence the present case stands on different footing then the company petition earlier made . Having regard to the aforesaid, no case for recalling the order of admission is made out. The said order is confirmed. A case of winding up of respondent company is made out. Considering the circumstances, it is found that the petition has been presented on the ground that is just and equitable for passing an appropriate order of winding up. Accordingly I order winding up of the respondent-Company in accordance with the provisions of the Act read with the Company Court Rules, 1949.

Issues:
- Winding up petition under Section 433/434 of Companies Act, 1956 for non-payment of dues.
- Maintainability of winding up petition due to respondent's status as a sick company.
- Dispute over quality of goods supplied and non-payment of outstanding amount.
- Intervention by secured creditor for non-repayment of loan.
- Technical objections regarding the filing of the petition and authorization of the affidavit.
- Legal impediment due to pending appeal before AAIFR.
- Typographical error in the petition.
- Compliance with prescribed form for filing the petition.
- Relevance of wishes of secured creditor in winding up proceedings.
- Comparison with previous judgments on winding up petitions.

Detailed Analysis:
1. Winding Up Petition: The petitioner filed a winding up petition under Sections 433/434 of the Companies Act, 1956, seeking to wind up the respondent company due to non-payment of dues amounting to ?6,14,954.74. The respondent issued cheques that were dishonored, reflecting an inability to pay the debt.

2. Maintainability as a Sick Company: The respondent claimed to be a sick company with proceedings pending before AAIFR, arguing that the winding up petition is not maintainable. However, the court found the respondent's inability to pay the debt and eroded financial status justifying the winding up.

3. Quality Dispute and Non-Payment: The respondent alleged a dispute over the quality of goods supplied as a defense for non-payment. However, the court found no substantial evidence supporting this claim and noted the confirmed outstanding amount due from the respondent.

4. Intervention by Secured Creditor: The proposed intervenor, a secured creditor, sought winding up due to non-repayment of a loan amounting to ?177.4 lakhs. The court considered this as additional evidence of the respondent's inability to pay debts.

5. Technical Objections: The respondent raised technical objections regarding the filing of the petition and the authorization of the affidavit. The court found substantial compliance with the filing requirements and authorized signatory, dismissing these objections.

6. Legal Impediment and Typographical Error: The court noted the dismissal of the appeal before AAIFR, removing any legal impediment to the winding up proceedings. A typographical error in the petition did not affect its validity.

7. Compliance with Prescribed Form: Despite initial objections, the court found substantial compliance with the prescribed form for filing the petition, allowing the case to proceed.

8. Secured Creditor's Wishes: The court differentiated the present case from previous judgments, emphasizing the secured creditor's wishes as relevant due to the established inability of the respondent to pay debts.

9. Comparison with Previous Judgments: The court distinguished previous judgments cited by the respondent, emphasizing the specific circumstances of the present case and the evidence supporting the winding up petition.

10. Final Decision: The court confirmed the order for winding up the respondent company based on the established inability to pay debts. The Official Liquidator was appointed, and necessary steps were directed for the final winding up order.

This comprehensive analysis covers the various issues addressed in the judgment, detailing the arguments presented by both parties and the court's reasoning leading to the final decision for winding up the respondent company.

← Previous Next →