2014 (4) TMI 1323 - HC - Companies Law

Winding up of company - the respondent is legally indebted to the petitioner or not - petitioner would submit that notwithstanding the present proposed settlement whereby the respondent has issued a cheque for a sum of Rs. 10, 00, 000/- and proposes to pay the remaining amount with interest at 10% - HELD THAT - Given the circumstances that there is now a proposal by the respondent to repay the remaining amount with interest thereon at 10% it would be appropriate if the respondent could also pay a nominal interest on the amount of Rs. 31, 00, 000/- which has been paid. Hence the interest for the said amount is directed to be paid at Rs. 75, 000/-. Though the learned counsel for the petitioner is yet dissatisfied and would submit that the Court may proceed to pass appropriate orders on merits therefore the present order. This Court is satisfied that the respondent is able to meet its commitments and it would not be just and fair to wind up the respondent. Recording the undertaking of the respondent that the remaining amount shall be repaid as proposed in the memo dated 28.03.2014 along with an additional sum of Rs. 75, 000/- as interest towards Rs. 31, 00, 000/- that has already been paid the petition is dismissed.

Summary

Issues:
1. Breach of contract and failure to deliver possession of the apartment within the stipulated time frame.
2. Dispute over the amount paid by the petitioner and the balance amount claimed by the respondent.
3. Allegation of inability to repay debts and the petition for winding up.

Analysis:
1. The petitioner alleged breach of contract by the respondent for failing to deliver possession of the apartment within the agreed timeframe. The respondent claimed delays were due to unavoidable circumstances and that the agreement allowed for extensions in such cases. The respondent argued that the contract was not subject to termination but only attracted damages. The petitioner demanded a refund with interest, alleging misuse of funds by the respondent, leading to the winding up petition.

2. Dispute arose over the amount paid by the petitioner and the balance claimed by the respondent. The petitioner made payments totaling Rs. 50,25,954/- as per the Construction Agreement. The respondent contended that a balance of Rs. 11,68,600/- was due, considering the total cost of the apartment. The respondent also mentioned additional expenses not covered by the payments made by the petitioner, disputing the existence of a crystallized debt.

3. The respondent proposed a settlement by repaying the remaining amount with interest at 10%. The petitioner argued that the lack of interest payment on the substantial sum already paid raised concerns about the respondent's ability to meet its commitments. The court directed the respondent to pay interest on the amount already paid and concluded that the respondent could meet its obligations, dismissing the winding up petition.

In conclusion, the court found that the respondent's proposed repayment plan, along with the additional interest directed by the court, demonstrated the respondent's ability to meet its commitments. The court dismissed the winding up petition based on the satisfaction that the respondent could repay the outstanding amount as proposed, including the interest on the amount already paid.