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TMI Blog2009 (4) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... l and Deepak Suri for the Respondent. ORDER I. Scope 1. This petition has been filed under sections 433, 434 and 439 of the Companies Act, on behalf of the petitioner for winding-up respondent-company i.e., Motorola India Pvt. Ltd. 2. The basis of the petition is the alleged admitted liability of the respondent-company to the petitioner in a sum of Rs. 1,12,51,871 for various goods sold and services rendered by the petitioner to the respondent-company under an Infrastructure Supply and Services Agreement dated 7-1-2002 ( the agreement ). The agreement came to be executed for implementing the respondent-company s GSM project at BSNL and non-BSNL sites in the States of Andhra Pradesh/Kerala. II. The petitioner s claims 3. The averments in the petition are that the petitioner had to complete the work entrusted to it by the respondent under the terms of the aforesaid agreement by 27-7-2002. The agreement spells out the terms of payment and the admitted case is that all the payments have been made except 20 per cent of the price of the purchase order that is alleged to have been withheld by the respondent, notwithstanding the fact that it has received the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the last payment from BSNL. The further contention of the respondent is that the petitioner was bound to furnish the proof of payment of all applicable taxes, as required to be done under clause 13 of the Agreement and in the case of such default, the respondent is not liable to make the payment to the petitioner. The respondent has also contended that the petitioner had failed to fulfil certain obligations relating to the works entrusted to it and consequently respondent-company had itself completed the work and seeks for deduction to the tune of Rs. 53,43,264. This amount according to the respondent was liable for deduction as per Clause 14.1 of the Agreement as claim for damages for delayed completion of the works. The respondent would counter the petitioner s claim of the so-called admitted liability by its reference to the audit and the statements in the balance sheet by stating that the Accounting Standards (AS) framed by the Institute by the Chartered Accountant of India has been given statutory force and AS-29 dealing with the provisions, contingent liability and contingent assets etc. requires that the company is bound to make a substantial degree of estimation and what w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point of time, and when this expression is used without any qualification it generally means payable at once. This assumes importance only because a petition for winding up under the Companies Act could be invoked only for an amount that is ascertained and owed by the company. That is why there is a statutory requirement of having to issue a notice. In case where a creditor complains that the company is unable to pay its debts and as such the presumption is available under section 434(1)( a ) if the company is indebted in a sum exceeding one lakh rupees and company is unable to pay for three weeks after the demand is made. The "sum due" as referred to under section 434 must, therefore, mean what has fructified and cannot merely be a contingent liability or deferred payment. If the liability has not fructified within 21 days from the time the date of service of notice, it cannot be said to be a debt which company is unable to pay, in order that the Court could find a justification for winding up the company. 9. The contingent liability has reference under the Scheme of the Act in relation to winding up only as a factor among other events which the Court shall consider whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and BSNL before the Kerala High Court and before the Arbitrator. Under such circumstances, I have no doubt in my mind that debt has not become payable on the date of filing of the petition. 11. The expression whether the liability to pay in future would also be considered as a debt for the purpose of invoking section 433 was considered by the High Court of Gujarat in the Registrar of Companies v. Kavita Benefit (P.) Ltd. [1978] 48 Comp. Cas. 231 . The learned Counsel for the respondent relies on this judgment, which referred to a petition for winding up of a chit fund company where the company had its liability to repay subscription to several persons who were members of the chit fund. The court found that the liability was contingent and that such liability would not be a debt in praesenti and dismissed the petition. The similar statement of law was also made in a decision of this Court in Registrar of Companies v. Ajanta Lucky Scheme Investment Co. (P.) Ltd. [1973] 43 Comp. Cas. 314. This Court had held that the term debt really meant an amount which was due and could be claimed by creditor, so that if the demand was not met, the company could be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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