2013 (7) TMI 1238 - HC - Companies Law

Summary

Issues:
Petition for winding up of a company under Sections 433 and 434 of the Companies Act, 1956 based on non-payment of invoices. Disputed issues of time-barred claims and limitation period extension.

Analysis:
The petitioner sought winding up of the respondent company under Sections 433 and 434 of the Companies Act, 1956 due to non-payment of invoices. The petitioner alleged that despite supplying goods and receiving partial payment, the respondent stopped making payments, leading to a statutory notice being served. The petitioner claimed that the respondent's failure to pay indicated an inability to discharge debts, justifying the winding-up petition.

The Court noted that the remedy of winding up under the Companies Act is discretionary and should not be used as a means to enforce debt recovery. It emphasized that winding up is not an alternative to recovery through suit proceedings. Additionally, the Court highlighted that where disputed issues or a bona fide defense exists, a winding-up order is typically not granted.

In this case, the Court observed that the petitioner's claim appeared time-barred based on the details of unpaid invoices provided. The invoices in question were issued in April and June 2010, while the petition was filed in 2013. The Court raised concerns about the limitation period and the lack of evidence to show an extension of the limitation through the respondent's conduct or promise to pay.

The Court found that the petitioner had not presented sufficient evidence to demonstrate an extension of the limitation period due to the respondent's actions. It noted the respondent's silence even after receiving the statutory notice. As a result, the Court concluded that the petition involved disputed issues of fact and law that could not be resolved in the winding-up jurisdiction.

Ultimately, the Court declined to entertain the petition, stating that allowing such petitions with disputed issues would be an attempt to avoid stamp duty and could unfairly disadvantage the respondent, who may have a bona fide defense. The petition was disposed of accordingly.