2012 (8) TMI 759 - HC - Companies Law

Winding up petition - case of the petitioner based on the Compromise Petition entered into before the CLB, wherein the respondent-company agreed to pay rent at agreed rate, however said payment has not been made - Held that - Subsequent filing of a suit seeking recovery of rents by the petitioner has not been brought to the notice of this Court. In the said suit, respondent has specifically disputed the relationship of landlord and tenant. When the claim of the petitioner herein is that the sums have not been paid in terms of the deed and the same has been disputed at the earliest point of time even in the suit seeking recovery of rents, the defence taken by the respondent is bona fide and not a moonshine. It is based on facts and material. Therefore, when there is a bona fide dispute with regard to debt as claimed by the petitioner and when the dispute is likely to succeed in a point of law, it would be highly inappropriate to wind up the respondent-company. Petition dismissed.

Summary

Issues:
1. Dispute over non-payment of rent by respondent company to the petitioner.
2. Interpretation of Compromise Petition entered into between parties.
3. Allegations of suppression of material facts by the petitioner.
4. Bona fide dispute regarding the debt claimed by the petitioner.

Analysis:
The petitioner, a landlord, claimed non-payment of rent by the respondent company for the commercial properties leased to them. The petitioner relied on a Compromise Petition entered into in prior legal proceedings, where the respondent agreed to pay rent at a reduced rate. However, the respondent denied owing any rent and asserted that the Company Petition filed by the petitioner was baseless. The respondent further mentioned ongoing valuation proceedings related to share buyback, indicating solvency. The respondent argued that the petitioner's claim was solely based on the Compromise Petition, which was not produced in court, leading to dismissal of the petition due to lack of evidence.

The court noted the petitioner's failure to produce the Compromise Petition crucial to the case. Despite the petitioner's insistence on non-payment of rent as per the Compromise, the absence of this document hindered the court's ability to assess the debt claim. Additionally, the respondent highlighted the petitioner's suppression of material facts, including a separate suit for rent recovery where the relationship of landlord and tenant was disputed. The respondent's defense was deemed bona fide, based on facts and legal grounds, leading to the conclusion that winding up the respondent company was unwarranted.

In conclusion, the petition was dismissed due to lack of merit, primarily stemming from the absence of the key Compromise Petition and the existence of a genuine dispute regarding the debt claimed by the petitioner. The court emphasized the importance of presenting all relevant documents and facts for a fair and informed legal decision, ultimately ruling in favor of the respondent due to the petitioner's failure to substantiate their claims adequately.