2015 (12) TMI 638 - HC - Companies Law

Winding up petition - petitioner has approached this court alleging that the company is indebted to the petitioner a sum of ₹ 4,69,42,986/- on account of outstanding dues payable for services provided by the petitioner for transportation of the company s equipments from one place to another in India - Held that - Where a company has a bona fide dispute the petitioner cannot be regarded as a creditor of the company for the purposes of winding up. Bona fide dispute implies the existence of a substantial ground for the dispute raised. Where a debt upon which a petition is founded is a hotly contested debt and also doubtful, the company court should not entertain such a petition. This court will go into the causes of refusal of the company before coming to the conclusion whether the dispute is bona fide or not. Thus satisfied that the dispute raised by the company is a bona fide dispute and not some ingenious mask invented to deprive a creditor. And that the defence is not moonshine. The petitioner chose not to disclose the very important fact of dispute between the parties and the arbitration proceedings. The petitioner cannot be allowed to use the threat of winding up petition as a means of enforcing a company to pay a bona fide disputed debt. The petitioner chose to reduce this court as a debt collecting agency or means for bringing improper pressure on the company to pay the bona fide debts thereby abusing the jurisdiction of the company court. In the circumstances, the company petition requires to be dismissed with substantial cost.

Summary

Issues Involved:
1. Petitioner's claim of unpaid dues.
2. Respondent's counter-claim and arbitration proceedings.
3. Alleged defects in the statutory notice.
4. Determination of bona fide disputes.
5. Petitioner's non-disclosure of arbitration proceedings.
6. Appropriate forum for debt recovery and winding up.

Detailed Analysis:

1. Petitioner's Claim of Unpaid Dues:
The petitioner approached the court alleging that the company owed Rs. 4,69,42,986/- for transportation services provided since 2006. The claim related to 770 unpaid invoices, with 67 invoices equivalent to Rs. 33,44,185/- being time-barred.

2. Respondent's Counter-Claim and Arbitration Proceedings:
The company contended that the petition was a counter-blast to its arbitration claim for Rs. 5,55,62,526.30 due to cargo damage on 19.12.2010. The arbitration notice was sent on 21.11.2013, and the statutory notice by the petitioner was sent on 25.6.2014. The arbitration resulted in an award against the petitioner for Rs. 3,61,83,472/- plus interest and costs of Rs. 30,00,000/-.

3. Alleged Defects in the Statutory Notice:
The company argued that the statutory notice was defective as it cited Section 271 of the Companies Act 2013 instead of Sections 433 & 434 of the Companies Act 1956. The corrigendum sent by the petitioner was also claimed to be defective.

4. Determination of Bona Fide Disputes:
The court referenced the Apex Court's judgment in IBA Health (India) Private Limited Vs. Info-Drive Systems Sdn. Bhd., stating that if there is a substantial dispute as to liability, the creditor cannot prefer a winding-up application. The court must ascertain if the dispute is genuine and substantial, not spurious or illusory.

5. Petitioner's Non-Disclosure of Arbitration Proceedings:
The court emphasized that the petitioner failed to disclose the arbitration proceedings and the dispute over cargo damage. This non-disclosure was deliberate, aiming to avoid the perception of a bona fide defense, thus warranting dismissal of the petition.

6. Appropriate Forum for Debt Recovery and Winding Up:
The court held that the winding-up petition was not the appropriate forum for debt recovery, especially when the company had a bona fide dispute. The parameters for hearing a company petition differ from those for an arbitration petition.

Conclusion:
The court dismissed the petition, noting that the company had a bona fide dispute supported by an arbitration award. The petitioner's non-disclosure and attempt to use the winding-up petition as a debt recovery tool were criticized. The court awarded costs of Rs. 1,00,000/- to the company. The alleged defects in the statutory notice were deemed unnecessary to address further, as the notice was considered valid.