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TMI Blog2007 (7) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... he bills of exchange that they have been forged. This Controversy can hardly be properly examined in a winding up petition. The order relegating the petitioner to take recourse to legal remedy of filing a civil suit cannot be faulted with. Thus, the judgment under appeal neither suffers from any factual or jurisdictional error. There is also merit in the contention raised that the notice dated February 4, 2005, was withdrawn by a subsequent notice dated February 13, 2005. The language of the subsequent notice as also recorded by the company court, besides being similar, could lead to a reasonable conclusion that the appellant-company did not intend to pursue the claim any further to its first notice. Appeal dismissed. - APPEAL NO. 382 OF 2007 IN COMPANY PETITION NO. 419 OF 2006 - - - Dated:- 19-7-2007 - SWATANTER KUMAR AND SMT. RANJANA DESAI, JJ. D.D. Madon, Punit B. Anand for the Appellant. Pankaj Sawant, Vikram Trivedi, Sachin Chandarana and Mayur Bhojwani and Manilal Kher for the Respondent. JUDGMENT Swatanter Kumar, C.J. This company appeal is directed against the order passed by the learned company judge on March 21, 2007 ( Exposure Insuranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of evidence at the trial of a suit. Suffice to state, that no case for the exercise of the jurisdiction for winding up is made out. That apart, the attention of the court has also been drawn to the financial status of the respondent and the following averment in that regard is contained in paragraph 3( c ) of the affidavit-in-reply : "The reserves of the respondent are to the tune of Rs. 4,613 crores and the assets employed are to the tune of Rs. 6,094 crores. The sales and other income of the respondent was Rs. 13,748.26 crores in the year 2004-05 and have increased to Rs. 15,198.63 crores in 2005-06. The respondent had made a profit before tax and extraordinary item of Rs. 1,286.14 crores in the year 2004-05, which has increased to Rs. 1,313.65 crores in the year 2005-06. This respondent's net worth in the year 2005-06 was Rs. 4,640 crores and its general reserves for the year 2005-06 is Rs. 2,496 crores. Therefore considered from any perspective, this is an appropriate case where the petitioner must be relegated to the remedy of establishing its claim in a civil suit before an appropriate court of jurisdiction. The company petition is accordingly dismissed." 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition but it has to be founded to claim a just debt. The debt which ex facie is disputable in law and on just equitable and bona fide defence and the court is of the view that the controversy raised could be appropriately raised in a civil suit and the nature of the disputes to be determined is complex, in such circumstances exercise of discretion by the court relegating the petitioner to a civil suit can hardly be questioned. In the case of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries (P.) Ltd., AIR 1971 SC 2600; [1972] 42 Comp. Cas. 125, the stated principles for exercise of this jurisdiction are as under (page 131 of 42 Comp Cas) : "Where the debt is undisputed the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt (see A Company, In re (1894] 94 SJ 369 (Ch. D)). Where however there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantify the debt precisely (see Tweeds Garages Ltd., In re [1962] 32 Comp. Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle modification, was re-enacted in sub-section (1) of section 446. There was thus no specific provision conferring jurisdiction to the court winding up the company analogous to the one conferred by sub-section (2), which was introduced to enlarge the jurisdiction of the winding up court so as to facilitate the disposal of winding up proceedings. This sub-section, as originally enacted, did not meet with the requirement fully, with the result that the committee appointed for examining comprehensive amendment to the Companies Act, 1956 recommended that a suit by or against a company in winding up should notwithstanding any provision in law for the time being be instituted in the court in which the winding up proceedings are pending . The committee made this recommendation having noticed that on winding up order being made and the official liquidator being appointed, he has to take into his custody company property as required by section 456. Then, section 457 confers power on the liquidator to sell the properties of the company and to realise the assets. The committee felt that at the stage when the winding up order is made, the company may as well have subsisting claims and to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry procedure and whenever the court is of the opinion that the defence raised is bona fide and is likely to succeed in the civil court, it would constitute sufficient reasons for rejecting the winding up petition and relegating the parties to file a civil suit. The tests stated in the above judgments are fully satisfied in the present case. The defence raised by the respondents in the company petition was prima facie bona fide . The pleas raised are relating to facts as well as law. Furthermore undue delay in invoking the provisions of law even upon maturity of the bills of exchange by the petitioners is a relevant consideration which has been rightly noticed by the company court while exercising its discretion. 9. In light of the above principle, we may now revert back to the facts of the present case. There is no dispute that the bills of exchange were executed and were payable as on March 15, 2003. According to the respondents these bills of exchange were rendered inconsequential and ineffective vide letter dated February 27, 2003, wherein the "Sky Impex Ltd." had informed the appellant-company as follows : "This is to inform that goods supplied by us to yourselves un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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