2015 (3) TMI 328 - HC - Companies Law

Application for winding up - Part payment denied on the ground that material was of poor quality - Held that - Part payments made by the company to the petitioner as contended by the petitioner has not been denied by the company. In paragraph 8 of the winding up petition the petitioner has furnished the particulars of the part payments made by the company. In its affidavit in opposition the company has not denied or disputed such particulars. It is, thus, established that the company did make payment of ₹ 4,82,565.60 to the petitioner. Had the company rejected the goods supplied by the petitioner, there could have been no question of making such part payment. The stand taken by the company in the reply to the statutory notice and in its affidavit in opposition is completely inconsistent with the company having made part payment to the petitioner. The defence sought to be raised by the company does not appear to be bona fide. It is merely an afterthought to avoid payment of the petitioner s outstanding dues. In the premises, this company petition is admitted for a sum of ₹ 54,593.32 being the principal amount claimed by the petitioning creditor. The sum will carry interest at the rate of 12 per cent per annum from 19th September, 2013 being the date when the winding up petition appears to have been filed. However, the company is given an opportunity of paying the said principal amount along with the aforesaid interest by 15th November, 2014 if such payment is made, this order of admission of the winding up petition shall remain permanently stayed. There will be an unconditional stay of this order till 15th November, 2014. - Winding up application accepted conditionally.

Summary

Issues: Application under Sections 433, 434 and 439 of the Companies Act, 1956; Dispute over payment for goods supplied; Allegations of poor quality and rejection of goods; Admissibility of winding up petition for outstanding dues.

Analysis:
1. The petitioner filed an application under Sections 433, 434, and 439 of the Companies Act, 1956, claiming that the company had agreed to purchase goods and pay immediately, with interest for default. The petitioner supplied goods worth &8377; 5,37,158.92, of which &8377; 54,493.32 remained outstanding after part payments. The company contended that the goods were of poor quality and unsuitable, leading to rejection. The petitioner served a notice under Section 434 of the Companies Act, 1956, denying the rejection claims.

2. The petitioner argued that the company's defense was baseless, as there was no prior intimation of goods rejection. The petitioner sought winding up of the company due to its failure to pay the outstanding amount. The company, in its affidavit and during the hearing, maintained its stance on the poor quality of goods supplied, reiterating the rejection claim.

3. The company also questioned the authenticity of the bills raised by the petitioner, which formed the basis of the winding-up petition. However, the petitioner later disclosed copies of the bills, which the company denied receiving or authenticating. The petitioner detailed part payments made by the company, which the company did not dispute, establishing a partial payment of &8377; 4,82,565.60.

4. The court noted the inconsistency in the company's stance, as it had made part payments despite claiming rejection of goods. The court found the company's defense to be an afterthought to avoid payment, rather than a genuine claim of poor quality. Consequently, the court admitted the winding-up petition for the principal amount of &8377; 54,593.32, with 12% interest from the filing date. The company was given until a specified date to clear the dues; failure to do so would allow the petitioner to proceed with publication for winding up.