9911796707
TMI Blog1984 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent company for recovery of a sum of Rs. 1,77,425.84 towards principal and Rs. 59,79416 towards interest at the rate of 16.5% per annum from the date of invoice. Thus, the total claim was Rs. 2,38,220 and further interest from the date of plaint till the date of realisation. In the said suit before the Hon'ble Madras High Court, though the respondent company was served with suit summons several times, it did not appear in the court and the petitioners filed an application No. 22/79, for passing a decree under O. 12, rule 6, CPC, on the basis of the admission made by the respondent company in a letter written by it before filing of the suit; and in that application and the suit an order/decree and judgment was passed by the High Court on February 21, 1979, for Rs. 2,90,72359 with further interest at 6% per annum on the principal decreed sum of Rs. 1,77,425.84 from the date of decree till realisation. The decree has now become final as no appeal has been filed. The petitioner caused an advocate's notice dated March 10, 1979, to be sent to the respondent company demanding the decretal amount, but the latter has not paid nor has it replied to the statutory notice within the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the corporation which had its first charge over the same and if the company was wound up the corporation was likely to suffer loss. An affidavit-in-opposition was filed on behalf of the respondent company on September 12, 1980, by its executive director stating, inter alia , that it is correct that the respondent company obtained the materials to the extent of Rs. 1,77,425.84 and that a letter of confirmation was also sent, but he denied liability to pay interest. It was further stated that the respondent is only liable to pay the principal amount and not the interest which was not within any condition of contract between the petitioners and the respondent company and that the latter has no intention to defer the payment. It has been further stated that since, after the establishment of the respondent company, it was managed by the then board of directors, but the financial position of the company began to deteriorate some time in 1975 due to various factors, for example, high cost of raw materials, difficulties in procuring capital, and high cost of finished products which was beyond the control of the company and it was on the verge of closure on or about 1975 and, at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take over the interest of the respondent company. Mr. Das was directed to file a supplementary affidavit-in-opposition stating the up-to-date state of affairs of the respondent company vis-a-vis the State Government of Assam and the Industrial Reconstruction Corporation of India within six weeks. On January 28, 1984, time was further extended for ten days for filing the affidavit. As no such affidavit was filed, this petition was heard on February 21, 1984, and April 5, 1984. The liability is thus admitted by the respondent company. Though it questions the liability to pay interest, it cannot be said that the liability itself is disputed. The respondent company's explanation is that due to various difficulties it has not been able to discharge the liability towards the petitioners but it is still trying. Though the Government has appointed an executive director, who has affirmed the affidavit, Mr. Das has not been able to give any idea of the present state of affairs, in terms of taking over or reconstruction of the respondent company's business. This company petition was filed as far back as on November 15, 1979, and the petition was also advertised as far back as in June, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n doubt. Where in spite of demands by a creditor, the company neglects to pay, it is prima facie evidence of inability to pay. The petitioners are decree-holders and the decree is a final one not being challenged in appeal. If instead of executing the decree dated February 21, 1979, they resort to this petition for winding up, can their prayer be refused ? As was observed in Amalgamated Commercial Traders ( P. ) Ltd. v. A. C. K. Krishnaswami [1965] 35 Comp. Cas. 456 (SC), the winding up petition is not a legitimate means of seeking to enforce a payment of debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure to pay a disputed debt will be dismissed, and, under certain circumstances, may even be stigmatised as a scandalous abuse of the process of the court. But, in the instant case, the respondent company does not bona fide dispute the debt. Mr. Das states that the company still has assets far exceeding its liabilities. However, that by itself would not be sufficient to hold the company not to be unable to pay its debt, if otherwise, it is plainly and commercially insolvent so that its assets ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made by the court. In the instant case, as the workers have not taken any objection to the winding up petition, it would not be reasonable to refuse a winding-up order on the ground of the workers being not heard. The petitioners are judgment creditors. A creditor is a person who could enforce his claim against the company by an action of debt. They have obtained judgment against the company for an ascertained sum of money and the judgment itself created a debt entitling the petitioners to the petition for winding up. The fact that the decree may be executed in the civil court is not a sufficient ground for refusing a winding-up order. As has been held in Unique Cardboard Box Mfg. Co. Pvt. Ltd., In re [1978] 48 Comp. Cas. 599 (Cal.), it is not necessary that the decree should be executed before the presentation of a winding up petition. A winding up petition can be admitted if made on the basis of an unfiled award as was held in Kalyani Spg. Mills Ltd. v. Shiva Trading Co. [1983] 53 Comp. Cas. 632 (Cal.) and Dalhousie Jute Co. Ltd. v. Mulchand Lakshmi Chand [1983] 53 Comp. Cas. 607 (Cal.). Admittedly, the decree has not been executed and the decretal amount has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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