2014 (5) TMI 20 - HC - Companies Law

Winding up of the respondent company - Inability to pay debts - respondent company has failed and neglected to pay the amounts due and payable to the petitioner - whether the amount calculated by the respondent is admittedly due and payable to the petitioner - Held that - Admittedly, the respondent had received the sum of Rs. 3,75,000/- towards booking of a residential flat. The said payment was made to the respondent in terms of a construction linked plan as advertised and agreed by the respondent - The respondent demanded a sum of Rs. 2,25,000/- (12% of the consideration) by its letter dated 21.12.2006. The said letter further put the petitioner to notice that if the payment as demanded was not made within a period of 30 days, the petitioner would be liable to pay penal interest at the rate of 20% P.A. Respondent has failed to fulfill its obligation and is not in a position to handover the possession of the flat in respect of which the amount of Rs. 3,75,000/- had been accepted. Admittedly, the petitioner was only obliged to pay 20% of the consideration till the commencement of construction as per the construction linked plan. The amount of booking and the first installment was also demanded and accepted by the respondent as being 20% of the consideration (computed for a flat of 1500 Sq. ft. at the rate of Rs. 1250 per Sq ft.) for a flat measuring 1500 sq ft. It is thus, not open for the respondent to contend that it was not obliged to hand over a flat measuring 1500 Sq ft. A allotment letter for such flat was issued to the petitioner on 22.11.2007 and there has been no further communication by the respondent whereby the said allotment has been sought to be altered in any manner. On the contrary, respondent called upon the petitioner to pay the balance sum due immediately, by its letter dated 09.01.2012 - defence raised by the respondent that he is not liable to repay the amount of Rs. 3,75,000/- to the petitioner is not credible - contention canvassed on behalf of the respondent is clearly without any merit and is ex-facie a sham defence raised only to avoid the obligation to refund the amount collected by the respondent - The petitioner would also be entitled to a reasonable interest as the sums paid by the petitioner have been utilised by the respondent - Decided partly in favour of appellant.

Summary

Issues Involved:
1. Winding up of the respondent company under Sections 433(e), (f), 434, and 439 of the Companies Act, 1956.
2. Alleged failure of the respondent company to pay the amounts due to the petitioner.
3. Alleged fraud and misrepresentation by the respondent company.
4. Whether the petitioner's claim is barred by limitation.
5. Entitlement of the petitioner to a refund along with interest.

Issue-wise Detailed Analysis:

1. Winding up of the respondent company under Sections 433(e), (f), 434, and 439 of the Companies Act, 1956:
The petitioner filed for the winding up of the respondent company, alleging that the company failed and neglected to pay the amounts due and was unable to pay its debts. The respondent company is engaged in developing real estate and housing projects, specifically the "Camellia Garden" project in Bhiwadi, Rajasthan.

2. Alleged failure of the respondent company to pay the amounts due to the petitioner:
The petitioner, having taken over the booking from Navdeep Uppal, paid a total of Rs. 3,75,000/- towards the booking and first installment for a flat in the project. Despite this, the respondent company failed to commence construction of the designated tower (Tower BEETA-6) and did not respond to the petitioner's demand for a refund. The respondent company deposited Rs. 3,75,000/- with the court without prejudice to its rights during the proceedings.

3. Alleged fraud and misrepresentation by the respondent company:
The petitioner contended that the respondent company misrepresented the status of construction, claiming it was in full swing when it had not even commenced. This misrepresentation induced the petitioner to make the payment. The petitioner demanded a refund with interest after discovering the construction had not started.

4. Whether the petitioner's claim is barred by limitation:
The court rejected the respondent's contention that the petitioner's claim was barred by limitation. The court noted that the cause of action arose when the petitioner discovered the non-commencement of construction and that the demand for the balance consideration in January 2012 and subsequent discovery provided the petitioner the cause to seek a refund. The claim was deemed within the limitation period as the respondent acknowledged the amount as part consideration for the flat.

5. Entitlement of the petitioner to a refund along with interest:
The court found that the respondent failed to fulfill its obligation to construct and deliver the flat. The respondent could not compel the petitioner to accept a different flat. The court held that the petitioner was entitled to a refund of Rs. 3,75,000/- along with reasonable interest. The court deemed an interest rate of 12% per annum reasonable, considering the respondent's own demand for penal interest at 20% per annum for delayed payments.

Conclusion:
The court directed the registry to pay the deposited amount along with accrued interest to the petitioner. Additionally, the respondent was ordered to pay simple interest at 12% per annum from the date of receipt of the amount until the date of deposit with the court registry. Failure to comply within four weeks would result in the petition being admitted for winding up. The case was listed for compliance on 10.03.2014.