9911796707
TMI Blog2003 (6) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... y incorporated under the provisions of Companies Act, 1956 and is a manufacturer and dealer of electrical products, motors, switchgears, control panels, etc. The appellant company under various invoices raised from time to time, supplied the materials to the respondent-company. The materials delivered by the appellant company were acknowledged by the respondent-company and the total balance outstanding due on various invoices was Rs. 25,09,849.84. The respondent-company though initially raised some dispute, issued a cheque of Rs. 5,00,000.00 dated 31-12-2000 drawn on State Bank of India, Industrial Finance Branch, Bangalore. The same was dishonoured on 15-2-2001 with an endorsement of "insufficiency of funds" in the account of respondent. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been issued. 4. We have heard the learned counsel for the appellant and perused the material placed on record and the case laws. 5. Under the Companies Act a special jurisdiction has been created for winding up. If admitted debt is not paid after expiry of the statutory notice and company is unable to pay the debt, winding up order can be passed. In other words, if any admitted debt is due, the provisions of section 433 can be invoked but the debt should be bona fide and whether it is bona fide or not depends upon the circumstances of each case. Whether the dispute is raised to avoid payment of debt and not based on substantial ground cannot be considered. It is also seen that it is not the legislative intention that Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 21 which read as under : "Two rules are well-settled. First if the debt is bona fide disputed and the defence is a substantial one, the Court will not wind up the company. The Court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. ( See London and Paris Banking Corporation (1874) 19 Eq 444). Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been done properly was not allowed. ( See Re Brighton Club and Norfolk Hotel Co. Ltd., [1865] 35 Beav 204). Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and the decision of the Calcutta High Court in Durgapur Projects Ltd. s case ( supra ) are not helpful in the facts of the present case. Reference can be made to the decision of the Apex Court in Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishna Swami [1965] 35 Comp. Cas. 456 (SC) wherein it was observed: "It is well-settled that a winding up petition is not a legitimate means of seeking to enforce payment of a 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 stigmatised as a scandalour abuse of the process of the Court." [p. 456] and also to the decision of this Court in Kamadhenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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