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TMI Blog2009 (4) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 31,51,399 remains due and payable by the respondent company. Without paying the outstanding amount, the respondent company, by a letter dated 21-3-2002, informed the Tata SSL Limited that they have taken steps to bring the normalcy and the company shall produce normal production and start releasing the payments against the outstanding bills. Subsequently, the said Tata SSL Limited was merged with M/s. Tata Iron and Steel Limited (hereinafter referred to as 'the appellant company') and the amalgamation was sanctioned by the order of the High Court, Mumbai, dated 3-4-2003 in C.P. No. 100 of 2003. A notice was sent by the Tata SSL Limited earlier on 30-3-2002 and in spite of the undertaking given by the respondent company in their letter dated 21-3-2002 no payments were made. Hence, the Tata SSL Limited caused a statutory notice dated 23-8-2004 calling upon the respondent company to pay the said sum of Rs. 31,51,399 with further interest thereon within 21 days of receipt of the notice. It is the case of the appellant company that though the said notice was duly served on 27-8-2004, the respondent company failed to pay the balance outstanding and therefore, another notice in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n viz., Rs. 31,51,399. Therefore, even a mere failure to mention the actual quantum of amount will not by itself lead to the conclusion that the claim is disputed. Hence, the appellant company has not only established the actual outstanding amount due to them from the respondent company, but also has established that the respondent company is unable to pay their debts. Therefore, the petition for winding up should have been ordered. 5. R. Srinivas, the learned counsel, would, on the other hand, submit that the notice issued in the name of the erstwhile company, M/s. Tata SSL Limited cannot be considered to be one of a statutory notice issued by the appellant company. The only notice sent in the name of the appellant company was dated 6-5-2005, which was not served, as the same was returned to the counsel with postal endorsement 'company closed'. In the absence of any statutory notice, the appellant company cannot maintain a winding up petition. He would also submit that there is a dispute relating to the claim as such. At no point of time, the respondent company admitted the outstanding amount claimed by the appellant company. The endorsement of the authorised signatory of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be that a company should not be ordered to be wound up unless it is proved to the satisfaction of the company Court on the above two grounds that there was no dispute as to the claim and that the company against which the winding up petition is filed is unable to pay the debts. The provisions of section 433 does not confer on any person a right to seek an order that the company shall be wound up. It only confers powers on the Court to pass order of winding up in appropriate cases and the right of the Court is discretionary. It does not empower a person to seek enforcement of bona fide disputed debts, as the proceedings of winding up cannot be adopted as a course to recover the debts. 8. Before we consider further, we may refer to the proposition of law as enunciated by the Apex Court. In Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456, the Apex Court has held as follows:- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Comp. Cas. 4731. In the said judgment, it was held that the defence raised by the appellant-company was a substantial one and not mere moonshine and had to be finally adjudicated upon on the merits before the appropriate forum. There was no justification whatsoever for admitting the winding up petition. 9. In Amalgamated Commercial Traders (P.) Ltd.'s case (supra), the decision first cited supra, the Apex Court was considering a dispute whether the creditor claimed a sum of goods sold to the company and the company contended that no price has been agreed upon and the sum demanded by the creditor was unreasonable. In circumstances, the Apex Court found that there was a bona fide dispute as to the claim as such. In Madhusudan Gordhandas & Co.'s case (supra), the Apex Court has negatived the contention that there was no precise sum which was owed to the petitioner, as it was not a sufficient answer to the petition. Of course, in the latter case, the Apex Court considered the rate of interest and while considering the same, it was held that it would be quite unjust to refuse a winding up order to a petitioner, who is admittedly owed moneys, which had not been paid merely because there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vijay Industries' case (supra) ultimately found that it is not a requirement of law that the entire debt must be definite and certain. 11. Of course, Mr. R. Srinivas, learned counsel appearing for the respondent company would submit that the finding rendered in Vijay Industries' case (supra), is not applicable to the present case, as the debt is bona fide in respect of the principal amount. In our opinion, the judgment of the Apex Court in Vijay Industries' case (supra) cannot be read as intended by the learned counsel for the respondent. What is relevant is the bona fide dispute and correspondingly, the inability to pay the debts. 12. Keeping the above principle in mind, the facts of this case must be considered. The learned Judge had accepted the contentions of the petitioner in the company petition, viz., the appellant herein, as to the proper service of statutory notice and as already referred, the said finding is not questioned by the respondent. A statutory notice dated 30-3-2002 was issued in the name of Tata SSL Limited for payment of the outstanding amount. In response to the said notice, the respondent company, by their letter dated 21-3-2002, had informed the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 14. Insofar as the second submission of the learned counsel for the respondent, viz., that the appellant company itself was not definite about the actual amount due to them from the respondent company in view of the first note, it is true that the respondent company had been asked to confirm the balance confirmation statement by the said note. But, we do not find any response disputing the said claim by the respondent company over the balance confirmation statement. The main objection in the company petition appears to be that the respondent company was not served with the notice and except stating that there was a bona fide dispute as to the debt, no documents are made available to show that there was a bona fide, dispute. On the other hand, the appellant company had heavily relied upon the communication of the respondent dated 21-3-2002 giving a undertaking that the outstanding bills would be settled once the company commenced its normal production. On the facts of this case, in our opinion, the appellant company has established that there was a debt exceeding Rs. 1 lakh due from the respondent company and there was no bona fide dispute. 15. One more argument advanced on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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