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TMI Blog2008 (11) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... ted:- 19-11-2008 - RANJAN GOGOI, J. K.N. Choudhury, S. Shyam and Ms. R. Deka for the Petitioner. Mrs. M. Hazarika and Ms. A. Ajitsaria for the Respondent. JUDGMENT 1. This company petition, already advertised after a lively debate recorded in the order dated 18-11-2003, is founded on the alleged failure of the respondent to pay its debts within the meaning of section 433( e ) of the Companies Act, 1956. The debt in question is claimed to be due under a decree dated 12-4-2001 passed by the District Court for the Middle District of North Carolina in the United States of America. By the aforesaid decree the claim of the petitioner, as the plaintiff, against the respondent, as the defendant, has been decreed for a sum of U.S. $ 2,257,147.58 along with interest thereon at the statutory rate. It will be required to be noticed at this stage that the aforesaid decree is an ex parte decree and though appealable, the defendant i.e. the Respondent herein has chosen not to file any such appeal. It will also be required to be noticed, at this stage, that the petitioner instead of taking steps for execution of the aforesaid decree has chosen to file this company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs on the issues raised and instead the matter should be adjudicated by the Company Court in accordance with law and without being influenced by the findings recorded in the order dated 18-11-2003. 4. Sri K. N. Choudhury, learned Senior Counsel appearing for the peti-tioner, has argued that the issue relating to maintainability of the company petition on the ground raised i.e. that the decree was not put to execution, does not survive for consideration of the Court any further. This, according to Sri Choudhury, is on account of the fact that it is no longer res integra that the two remedies are alternate and optional and either can be exercised by an aggrieved party. Sri Choudhury has further argued that the aforesaid question of maintainability is also no longer open in view of the Division Bench order dated 22-8-2006 wherein it has been clearly recorded that the company petition is maintainable. Sri Choudhury has argued that the decree being for a specified amount, the debt arising therefrom is for a definite sum of money payable by the respondent to the petitioner. Relying on two decisions of the Apex Court in Pradeshiya Industrial Investment Corpn. of U.P. v. North ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection with other business deals. It is, therefore, submitted that jurisdiction has been wrongly assumed on the basis of such visits. Mrs. Hazarika, learned counsel for the respondent-company, has further submitted that the decree in question was not passed on consideration of the merits of the case and damages contrary to section 73 has been awarded. On these facts it is the contention of Mrs. Hazarika, learned counsel for the respondent, that the debt claimed to be due by the petitioner company is seriously disputed and the dispute being bona fide and of substance the instant company petition for winding up is liable to be rejected. 6. Without prejudice to the above, Mrs. Hazarika, learned counsel for the respondent, has also contended that under section 434(1) of the Companies Act a company shall be deemed to be unable to pay its debts arising under a decree only if upon execution, the decree either in whole or in part, remains unsatisfied. Pointing out the specific provisions of section 434(1) of the Act, learned counsel has argued that the deeming provisions contained in sub-clauses ( a ) and ( b ) are not in the alternative in the absence of the word or as in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. 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. The principles on which the Court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law, and, thirdly, the company adduces prima facie proof of the facts on which the defence depends. " [Emphasis supplied] The above principles find reiteration in Mediquip Systems (P.) Ltd. ( supra ). In the present case, the defence of the respondent-company having already been noticed the application of the above principles laid down by the Apex Court must now receive the Court s consideration. 9. Where the debt claimed to be due arises under a decree objections to the legality of the decree cannot be considered by the Company Court by going behind the decree as such a course of action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insofar as the issue of proximity of the damages awarded by the decree is concerned, a reading of the order of the U.S. court would go to show that the damages suffered by the plaintiff/petitioner were found to be proximate and, therefore, ordered to be paid by the respondent-company. In such circumstances it would be wholly inappropriate for the Company Court to embark upon any further scrutiny of the said aspect of the matter. 12. The discussions above makes it amply clear that the defence offered by the respondent-company cannot be said to be one of any real substance which is likely to succeed as held by the Apex Court in Pradeshiya Industrial Investment Corpn. of U.P. ( supra ). This Court, therefore, cannot hold that the dispute raised by the respondent with regard to the debt due is a bona fide dispute so as to warrant refusal of the prayer for winding up. 13. Before parting with the record, the submission of the learned counsel for the respondent with regard to the applicability of the deeming provision contained in section 434(1) in case of a debt under a decree has to be addressed. The punctuations contained in section 434(1), particularly after each sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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