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TMI Blog1998 (10) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by the respondent-company. As per the agreement the supplies were made by the petitioner for the year 1993-94 which were received and consumed by the respondent-company. It was agreed that the petitioner will be paid the amounts on the basis of running payments against their bills. Subsequent- ly, there was a raise in the price of Rectified Spirit and it was agreed that future supplies would be made at the rate of Rs. 23.50 per bulk litre and the delivery would be made against payment in the form of demand draft along with an extra amount of Rs. 2.00 per bulk litre. The arrangement was signed by one Sri Bhupendra, a director of the respondent-company and by the Senior Executive Director on behalf of the petitioner. At the time of the said arrangement on 2-5-1994, the dues against the respondent- company were to the tune of Rs. 30 lakhs. However, on calculation it was found that the exact amount was Rs. 28,88,529.25 paise to which the petitioner was entitled along with interest at the rate of 24 per cent per annum on the basis of custom and trade practices. As this amount was not paid by the respondent despite demand, the petitioner was constrained to serve a statutory notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d between Rs. 15.00 to Rs. 18 per bulk litre. On account of the high rates charged by the petitioner-company the respondent stopped lifting the material with effect from 30-1-1994 to 15-2-1994 telephonic discussion took place on 14-2-1994 and the petitioner had assured that the higher rates would be adjusted and to maintain the business relationship the respondent lifted the material as is evident from the letter dated 16-2-1994. However, the said adjustment was not made and, hence, there was a bona fide dispute between the parties with regards to the over-charging. Apart from the same, it was further stated in the counter affidavit that the respondent-company which was always running in profit had to shift its plant to another place on account of the fact that they did not have adequate place at the factory site for setting up affluent plant which became necessary on account of the directions given by the Supreme Court in the case of M.C. Mehta. The shifting of the factory from Nawabganj to Tapri and setting up of the affluent plant involving heavy expenses and the company had to spend Rs. 2.50 crores for setting up the affluent plant. Consequently, in the assessment year 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent-company was not denying the fact that the supplies of Rectified Spirit had been made to them but they were disputing the amount claimed by the petitioner and were ready to pay the amount which was found after proper accounting this Court vide order dated 22-8-1995 had directed the respondent to pay the sum of Rs. 3,64,329 which was being admitted by the respondent-company to the petitioner in two instalments, out of which the first instalment of Rs. 5 lakhs was to be deposited within one month and the balance amount within 6 weeks. It is not disputed that the admitted sum has been since paid by the respondent to the petitioner, though, not within the time fixed by the Court. The respondent-company had paid this amount in several instalments during the course of about a year or more. However, as the petitioner was claiming an amount of over Rs. 28 lakhs plus interest at the rate of 24 per cent per annum, they have strongly pressed their petition for winding up of the respondent-company. 8. On behalf of the petitioner, its learned counsel have mainly contended that the director of the company had admitted in the agreement dated 2-5-1994 that a sum of about Rs. 30 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anpur, praying for decree for the balance amount of Rs. 15,24,200.25 paise after adjusting the sum of Rs. 13,64,329 already paid by the respondent to the petitioner during the course of the winding-up proceedings under the orders passed by this Court along with interest of Rs. 12,49,11.49 paise. The learned counsel has contended that as a suit has already been filed by the petitioner before the Civil Court for recovery of the amount claimed in the present winding- up proceedings along with interest, this petition ought to be dismissed on this ground alone. 9. I have carefully considered the respective submissions made by the counsel for the parties, Sri Jain has invited the attention of the Court to the observations made by the Supreme Court in the case of Madhusudan Gordhandas Company v. Madhu Woollen Industries ( P. ) Ltd. [1972] 42 Comp. Cas. 125, and has contended that the principle which has been laid down is that where the company owes the creditor a debt entitling him to winding-up order but the exact amount of debt is disputed, the Court will make a winding-up order without requiring the creditor to quantify the debt precisely. It has been held in the said case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gations, consequently, the winding-up petition deserves to be admitted. Learned counsel has also referred to certain other decisions including the decision of the Punjab High Court in the case of Straw Board Mfg. Ltd. v. Maha Laxmi Sugar Mills Co. Ltd. [1991] 71 Comp. Cas. 544, in which similar observations have been made. It is not necessary to refer to all those cases as all the said cases were decided on the peculiar facts of the said cases. In the case of Dawn Communications ( P. ) Ltd. ( supra ) , the respondent-company for the first time raised a dispute in the winding-up petition that the goods supplied do not conform to the order placed, rates were not settled and the petitioner company despite request did not supply the necessary particulars. The only question for consideration before the Court was whether the pay- ment of the said bills were bona fide disputed by the respondent-company. After discussing the facts of the said case, the Court found that the dispute raised for payments of bills were not bona fide. Similarly, the observations made in the case of UCO Bank ( supra ) , and Straw Board Mfg. Co. Ltd. ( supra ) , by the respective Courts were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of documents and letters have also been alleged. If the letters on which reliance have been placed by the respondent-company have been written and sent to the petitioner in such a case it cannot be said that the respondent-company was not disputing the bills bona fide and the defence set-up in this company petition was made for the first time and was an afterthought. In view of the said position in the present case, the cases on which Sri Jain has placed reliance can be distinguished. In view of the above, it cannot be said that the tests laid down by the Apex Court in the case of Madhusudan Gordhandas Co. ( supra ) , are not satisfied inas-much as in the facts of the present case prima facie it cannot be said that the defence raised by the company is not in good faith and one of substance or that the defence is not likely to succeed in a point of law. Prima facie it also cannot be said that the company has not adduced prima facie proof of the facts on which the defence depends. In fact, while dealing with the scope of section 43 3 ( e ) of the Act, the Apex Court in the case of Madhusudan Gordhandas Co. ( supra ) had observed as follows : "Two rules are wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed by the petitioner for the purpose regarding the subject matter of dispute in the present case, that will not preclude this Court from deciding this winding-up petition on merits. He has contended that the winding-up proceeding is not merely for the benefit of the petitioner but of all share-holders, creditors or contributories of a company. In support of his submission, the learned counsel has placed reliance upon a decision of Patna High Court in the case of Central Bank of India v. Sukhani Mining Engg. Industries ( P. ) Ltd. [1977] 47 Comp. Cas. 1. It has been held in the said case that there is no provision in the Companies Act nor is there any decision of any Court to show that mere fact that a creditor files a suit for realisation of the debt, the same would debar him from proceeding with the petition for winding-up of the company which is already pending. It has been further observed that there is no such provision, the reason being that a winding-up proceeding is not merely for the benefit of the petitioner but of all share-holders, creditors or contributories of a company. Therefore, the winding-up proceedings could not be stayed merely because the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel has however referred to the following observations of the Supreme Court in the case of The Pradeshiya Industrial Investment Corpn. of U.P. v. North India Petro Chemical Ltd. J.T. 1994 (1) SC 579 : "What then is inability when the sections say 'unable to pay its dues' ? That should be taken in the commercial sense. In that, it is unable to meet the current demands. As stated by William James, V.C. it is 'it is plainly and commercially insolvent' that is to say that its assets are such as to make it reasonably certain - as to make the Court feel satisfied - that the existing and probable assets would be insufficient to meet the existing liabilities." 14. From the said facts as on record it cannot be stated that the respon- dent-company is unable to pay its dues or it is unable to meet its current demand or that the facts before the Courts are such as to feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. As noticed above, there is no such material on the record before me. On the other hand, in the affidavit filed by the respondent-company before this court, it has been stated that as the company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable as interest. The said denial was not bona fide. In support of his submission that interest was payable, learned counsel has placed reliance upon two decisions namely, in the case of Stephen Chem. Ltd. v. Innosearch Ltd. [1986] 60 Comp. Cas. 702 (Punj. Har.) and in the case of Devendra Kumar Jain v. Polar Forging Tools Ltd. [1993] 1 C.L.J. 184. It has been held in the former case of Stephen Chemical Ltd. ( supra ) , that where a petition is presented for winding-up of a company on the ground that it is unable to pay its debts and the company admits its liabilities and in fact it pays up, the Company Court could determine as to whether the creditor is entitled to interest on the amount in question or not as the basic policy is to avoid multiplicity of litigation. Similar observations have been made in the case of Devendra Kumar Jain ( supra ) . On the basis of the said decisions the learned counsel has contended that since the respondent-company has admitted a substantial part of its dues and has not paid the amount, the Court should award interest at the rate claimed in the statutory notice. So far as the decision in the aforesaid two cases cited ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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