2018 (12) TMI 962 - HC - Companies Law

Winding up petition - Held that - The person acknowledging should have an interest which would suffer by the acknowledgement at the time it is made. There should be a jural relationship between him and the person who is making the admission. An acknowledgement by a stranger does not amount to acknowledgement of debt. This judgment would not help the respondent in view of what I have held above i.e. the Acknowledgement of debt is vide the Scheme of demerger approved on 16.12.2011 and the payment received by the petitioner on 25.1.2012. Hence, the debt is due and payable by the respondent company to the petitioner. Submission of the respondent that the products that were delivered/supplied by the petitioner were rusted and defective and hence on merit also no debt is due and payable to the petitioner is baseless keeping in view the clear cut acknowledgement made as noted above, the respondent/ the predecessor-in interest of the respondent who would not have been acknowledging the debt due if defective products have been supplied. There is no merit in the defence of the respondent. Accordingly, the petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in newspapers accordingly.

Issues Involved:
1. Winding up of the respondent company under sections 433(e), 434, and 439 of the Companies Act, 1956.
2. Acknowledgment of debt and limitation period under the Limitation Act, 1963.
3. Validity of the respondent's defense regarding defective products.
4. Appointment of the Official Liquidator.

Issue-Wise Detailed Analysis:

1. Winding up of the respondent company under sections 433(e), 434, and 439 of the Companies Act, 1956:
The petitioner, a subsidiary of a Swiss enterprise, sought the winding up of the respondent company for unpaid dues amounting to ?2,69,34,224/-. The petitioner had supplied bridge parts to the predecessor-in-interest of the respondent, who made partial payments, leaving arrears. A statutory demand notice was issued, followed by a winding-up petition.

2. Acknowledgment of debt and limitation period under the Limitation Act, 1963:
The respondent's counsel argued that the debt was barred by limitation, asserting that the invoices dated from 2009 to 2011, and the petition was filed beyond the limitation period. However, the petitioner relied on the acknowledgment of liability by the predecessor-in-interest in CP No.471/2012 and payments made in 2012, invoking sections 18 and 19 of the Limitation Act. The court noted that the scheme of demerger approved on 16.12.2011 included acknowledgment of the debt, and payments made on 25.01.2012 extended the limitation period.

3. Validity of the respondent's defense regarding defective products:
The respondent claimed that the products supplied were defective. However, the court found this defense baseless, given the clear acknowledgment of debt by the respondent and its predecessor-in-interest. The court referenced the Supreme Court judgment in IBA Health (I) Pvt. Ltd. vs. Info-Drive Systems Sdn.Bhd., emphasizing that a genuine dispute must be bona fide and not spurious.

4. Appointment of the Official Liquidator:
The petition was admitted, and the Official Liquidator attached to the court was appointed as the Provisional Liquidator to take over the assets, books of accounts, and records of the respondent company. The court ordered the publication of citations and directed the petitioner to bear the publication costs. The order was suspended for four weeks to allow the respondent to pay the due amount, failing which the liquidation process would proceed.

Conclusion:
The court concluded that the debt was due and payable by the respondent company to the petitioner. The winding-up petition was admitted, and the Official Liquidator was appointed. However, the order was suspended for four weeks to give the respondent an opportunity to settle the dues. No interest was awarded to the petitioner due to the delay in filing the petition. The case was listed for further hearing on 6.3.2019.

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