9911796707
TMI Blog1998 (10) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts of zinc metal. The petitioner, BOC India Limited (formerly known as IOL Ltd.) is also a company incorporated under the Companies Act having its factory premises at Asansol and Jamshedpur where it carries on the business of manufacture and supply of various industrial and medical gases to its consumers. The petitioner-company supplied industrial gases to the respondent-company from its Asansol and Jamshedpur factories and provided certain other facilities incidental to the supply between 1988 and 1991. According to the petitioner, the respondent-company owes a sum of Rs. 5,48,978.16 to it on account of supply of gases. The respondent-company in fact issued five cheques, one on September 12, 1991 and four on March 30, 1992, for a total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 690 per 100 cu. m. for a period of three years with an option of extension for a further period of two years. The petitioner agreed to the said terms and communicated its acceptance by letter dated January 5, 1989. These three letters dated July 6, 1988, October 29, 1988, and January 5, 1989, copies whereof have been marked annexures A, B and C to the counter-affidavit, admittedly formed the basis of the contract between the parties. The petitioner-company installed and completed the pipeline work in the factory premises of the respondent-company and supplied the first load of the liquid nitrogen on April 28, 1989. According to the respondent-company, the supply of liquid nitrogen was erratic from the very beginning which resulted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a time when the factory was closed and efforts were being made to revive the company. Section 433( e ) of the Companies Act provides that a company may be wound up by the court if "the company is unable to pay its debts". Section 434(1)( a ) of the Act provides that a company shall be deemed to be unable to pay its debts if a creditor, by assigning or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mated Commercial Traders ( P ) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp Cas 456 , the Supreme Court, observed (page 463) : "It is well-settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank draft payable at Jamshedpur".Earlier, on August 26, 1992, vide annexure 1 to the reply-affidavit the respondent-company had informed the petitioner-company at Asansol that "please send your authorised representative on October 9, 1992, to settle all the dues including returned cheques". It is, therefore, obvious, that although the claim was sought to be denied by counsel for the respondent-company at the time of hearing of the case, the company admitted to owing sum of Rs. 3,03,686.59 for which six cheques had been issued on September 12, 1991, and March 30, 1992. The point for consideration is whether despite the said "admission" it is open to the respondent-company to take the plea of bona fide dispute. As noted above, it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self. In the letters written by the respondent-company referred to by counsel for the petitioner, the company mentioned about the settlement of the dispute. These letters cannot be read as an admission of the entire claim of the petitioner independent of the counter-claim of the respondent, i.e , settlement of the entire dispute. In the case of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries Pvt. Ltd. [1972] 42 Comp Cas 125 , the apex court, observed that (page 131): "The principles on which the court acts are, first, that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and, thirdly, the company adduces prima facie proof of the facts on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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