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TMI Blog2007 (8) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... each on 4-11-1999 then the dealers stopped clearing their earlier outstanding through the petitioner, in the circumstances, the company could not collect the dues from the market and until accounts are reconciled between the parties it would be difficult for this Court to hold that there is a determined debt of ₹ 25 lakhs as from the forwarding letter dated 4-11-1999 itself whereunder 5 cheques were forwarded to the petitioner, it is crystal clear that those 5 cheques were forwarded by the company to the petitioner by way of guarantee to be returned after collection and receipt of the outstanding dues from the different parties in the market by the petitioner through the company and the company was unable to collect the old dues on account of misrepresentation of the representatives of the petitioner as is evident from the letter dated 23-11-1999, Annexure 6/1 to flag ‘2’ addressed to the petitioner. No merit in the winding up petition, which is dismissed, however, with liberty to the petitioner to resort to any other legal proceedings for realization of its outstanding dues, if any - CO. PETITION NO. 1 OF 2001 - - - Dated:- 10-8-2007 - V.N. SINHA, J. Rajeev Ran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 per cent per month. Under Clause 18 of the MoU, company had undertaken to send its accounts for the year 1998-99 for reconciliation to the petitioner by 10-5-1999. 4. In terms of the MoU, the company placed orders with the petitioner requesting it to supply auto parts to the dealers named in the supply order as is evident from the supply order dated 17-5-1999, 22-5-1999 and 15-5-1999, as contained in Annexure 4 to flag 2 and under letter dated 18-5-1999, Annexure-6 to flag 2 the company further informed the petitioner that they have already posted draft of Rs. 20 lakhs against outstanding balance of Rs. 56.92 lakhs which outstanding they are yet to confirm and then proceeded to express apprehension that collection/payment may fall as the parties have not received supplies for the last two months. 5. It appears, after settlement of accounts, petitioner desired 5 cheques of Rs. 5 lakhs each from the company as guarantee against the outstanding to be returned after receipt of the payment from the market, which was to be collected by the company for being forwarded to the petitioner. As desired, 5 cheques of Rs. 5 lakhs each, bearing Nos. 000462-000466 were forwarded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to flag 3 that 5 cheques of Rs. 5 lakhs each were given to the petitioner by way of guarantee so that the supply may be resumed/continued and the dealers may clear that the earlier outstanding but as supplies were never resumed/continued, the company instructed the bankers on 12-1-2000 itself not to clear those cheques, which instruction to the bankers was also intimated to the petitioner but the petitioner only with a view to intimidate and harass the functionaries of the company, credited those cheques in the account of the company on 3-4-2000 and when the cheques could not be encashed in the light of the instructions of the company then the petitioner again made debit entries in the books of account. 6. Counsel for the petitioner appearing in support of this petition, submitted that in terms of the memorandum of understanding entered into between the parties on 24-4-1999, Annexure-3 to flag 2 , the statement of accounts for the year 1998-99 was to be reconciled between the parties, which reconciliation appears to have been made on or before 4-11-1999 whereafter on 4-11-1999 5 cheques of Rs. 5 lakhs each were issued by the company in favour of the petitioner towards settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also began to collect the draft even for the old dues from the dealers then the company under letter dated 23-11-1999, Annexure 6/1 informed the petitioner about the conduct of its representatives in the market further requesting the petitioner to stop its representatives from spreading such incorrect, misleading fact, which was causing hindrance to the company in collecting drafts for the old dues. In spite of service of the registered letter containing such request, when situation did not improve and the company was unable to collect the remaining outstanding dues from the market then the company instructed their bankers not to clear those 5 cheques with further intimation to the petitioner about the circumstances prevailing in the market causing hindrance in their effort to collect the old dues. In the background of the aforesaid facts, it is further submitted that in terms of the memorandum of understanding signed between the parties, the goods were directly supplied/dispatched by the petitioner to the dealers, who having received the goods, had the responsibility to pay the petitioner and the task entrusted to the company was only to collect the draft no forward the same to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shenoy v. Karnataka Engg. Products Co. (P.) Ltd. [1981] 51 Comp. Cas. 116 (Kar.), in the case of Mediquip System (P.) Ltd. v. Proxima Medical System Gmbh. [2005] 59 SCL 255 (SC) and in the case of Registrar of Companies v. Ajanta Lucky Scheme Investment Co. (P.) Ltd. [1973] 43 Comp. Cas. 314 (Punj. Har.). 9. Having heard counsel for the parties and having perused the winding up petition, it appears that the case has been filed invoking the provisions contained in section 433( a ), ( c ) and ( e ) read with section 434 of the Act, which provisions, inter alia, provides that the company be wound up if there is a special resolution to that effect or the company has not commenced its business within one year of its incorporation or if the company is unable to pay debts. In the present case, sub-sections ( a ) and ( c ) of section 433 has absolutely no application as neither there is special resolution seeking winding up of the company nor the company has failed to resume its business within one year of its incorporation. So far the claim of the petitioner that the company be wound up by resorting to sub-section ( e ) of section 433 of the Act is concerned, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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