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2018 (12) TMI 1308 - HC - Companies LawWinding up petition - whether the debt is due and payable to the petitioner? - Held that - It is not for this Court to sit and serve through the evidence and record a finding of fact as to whether the amount is due and payable. The books of accounts/ running account of the petitioner would have to be proved to show that the said amounts are due and payable to the petitioner. It is also a matter of fact that the two invoices being Ex.564 dated 04.03.2011 for ₹ 11,36,603/- and Ex.573 dated 09.03.2011 for ₹ 17,69,989/- show that these goods were returned in view of the entries made in the transport receipts. Hence, no clear finding can be drawn that the debt is due and payable to the petitioner. It is settled legal position that it is not the function of the company court to enter into an adjudication of disputed facts which should have been the subject matter of the Civil Suit. Respondent has raised disputes that are bona fide. Clearly, the contentions which are now being raised by the petitioner are the issues which ought to have raised before the Civil Court. There is no merit in the present petition. Needless to add that any observations made herein will not in any manner prejudice the rights of the parties. It would be for the petitioner to approach the appropriate civil court for adjudication of its claim for any period spent while adjudication of the present winding up petition was pending, the petitioner can claim condonation of delay as per law, if required. The petition stands dismissed.
Issues involved:
Petition seeking winding up of a company under Sections 433(e) and (f), 434, and 439 of the Companies Act, 1956 based on outstanding dues. Dispute regarding the alleged debt owed by the respondent company. Examination of the running ledger account and VAT returns as evidence. Legal position on the company court's role in adjudicating disputed facts. Application of the settled legal position in winding-up petitions. Analysis: Issue 1: Petition for Winding Up The petitioner, a firm dealing in iron and steel, filed a petition seeking winding up of the respondent company under relevant sections of the Companies Act, 1956 due to outstanding dues amounting to &8377; 35,58,124. The respondent contested the claim, stating that the alleged debt was related to defective goods returned by the petitioner. Issue 2: Dispute on Alleged Debt The respondent denied the ledger account of the petitioner and contested the claim of outstanding dues. The petitioner relied on the running ledger account to support the claim, emphasizing that the respondent had accepted the dues by considering them in their VAT returns. However, the respondent disputed the debt, highlighting discrepancies in the invoices and the quality of goods supplied. Issue 3: Examination of Evidence The court analyzed the evidence presented, including the running ledger account and VAT returns. It was emphasized that under Section 34 of the Evidence Act, the petitioner needed to establish the debt by proving the books of accounts. The court highlighted the importance of original account books in proving liabilities. Issue 4: Role of Company Court The court referred to legal precedents, stating that the company court should not adjudicate disputed facts that should be addressed in a civil suit. Citing a Supreme Court judgment, it emphasized the need for genuine disputes to be resolved through appropriate legal channels rather than winding-up petitions. Issue 5: Dismissal of the Petition Based on the analysis and legal principles, the court dismissed the winding-up petition, noting that the disputes raised should have been addressed in a civil court. The petitioner was advised to seek recourse through the appropriate civil court for adjudication of the claim, with the option to claim condonation of delay if necessary. In conclusion, the court dismissed the petition and highlighted that any observations made should not prejudice the rights of the parties, emphasizing the importance of resolving genuine disputes through proper legal procedures.
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