2018 (11) TMI 248 - HC - Companies Law

Winding up petition - proof of debt due - Held that - As no conclusion can be made that any amount is due or payable by the respondent to the petitioner. There is no debt due to the petitioner. There is hence, in my opinion, no merit in the present petition. No grounds are made out to pass an order for winding up of the respondent Company. Transfer of the proceedings to the NCLT - Held that - The facts in the present case demonstrate that there is no material on merit to substantiate filing of the present winding up petition. It appears that the present application/request to have the matter transferred to NCLT is only an attempt to further delay and prolong the proceedings. Having come to a conclusion that there is no merit in the petition, see no reason to transfer the petition to NCLT. Also the old management of the Association, it appears cannot continue with the present proceedings. The new Management who were elected have decided to withdraw the present winding up petition. Accordingly, the present petition is even otherwise not maintainable in view of the decision taken by the new management of the petitioner to withdraw the present petition.

Issues:
1. Winding up petition under section 433(e) and 434 of the Companies Act, 1956 for non-payment of dues.
2. Transfer of proceedings to NCLT under section 434 of the Companies Act, 2013.
3. Dispute regarding representation and authority of counsels.
4. Lack of clarity on liability for renovation expenses.

Winding Up Petition:
The petitioner, an Association registered under the Societies Registration Act, filed a winding up petition against the respondent company for non-payment of dues amounting to ?1,01,900 for renovation work on the New Delhi House building. The respondent disputed the debt, claiming no liability for the renovation charges. The court noted the lack of details in the petition regarding the relationship between the parties and the basis of liability, leading to the dismissal of the winding up petition.

Transfer of Proceedings to NCLT:
The petitioner sought to transfer the proceedings to the NCLT under section 434 of the Companies Act, 2013. However, the court exercised discretion, citing a previous decision that such transfers are to be made based on the merits of the case and to expedite proceedings. In this case, since the court found no merit in the winding up petition, it declined to transfer the matter to the NCLT.

Dispute over Counsels:
There was a dispute regarding the authority of counsels representing the petitioner, with both Ms. Sunita Bhardwaj and Mr. Ashok Nagrath claiming representation. The latter sought to withdraw the petition based on a resolution passed by a newly elected committee. However, the court noted opposition from Ms. Sunita Bhardwaj and ultimately dismissed the petition due to lack of merit and the decision of the newly elected management to withdraw the petition.

Liability for Renovation Expenses:
The respondent contended that as a tenant under a lease agreement for the premises, they were not liable for the renovation expenses claimed by the petitioner. The respondent argued that such expenses are typically the responsibility of the premises' owner and not the tenant. The court found the lack of clarity on the liability for the renovation charges and the absence of evidence to establish the debt, leading to the dismissal of the winding up petition.

In conclusion, the court dismissed the winding up petition due to insufficient evidence of debt, lack of clarity on liability, and the decision of the newly elected management to withdraw the petition. The court also declined the transfer of proceedings to the NCLT, emphasizing the need to expedite proceedings based on merit.

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