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TMI Blog2009 (3) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... DAP) as per Export Sales Contract No. 01433 dated 27-6-2001, on cash against documents, 180 days from the date of bill of lading. The petitioner shipped the contracted quantity of DAP to the respondent in two shipments. The first shipment of 32,950.754 m.t. DAP was sent under bill of lading dated 1-6-2001 and the second shipment of 34,999.480 m.t. of DAP was sent under bill of lading dated 12-6-2001. The total value of DAP was US $ 11,675,325.70 payable within 180 days. Both the shipments were duly accepted by the respondent on arrival. 2. In terms of the agreement, the payment for the first shipment of US $ 5,687,959.16 became due and payable on 28-11-2001 and the payment of US $ 5,987,361.04 under the second shipment became due and payable on 10-12-2001. However, on 26-11-2001, the respondent wrote to the petitioner stating that because of the financial difficulties faced by them, they were not able to make the payment on the due date, i.e., 28-11-2001. They proposed re-scheduling of payments due to the petitioner in seven instalments beginning from February, 2002 and ending August, 2002. The proposed re-scheduling of due payment in instalments was a clear breach of the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of US $ 8,787,361.04 within three weeks of notice along with interest at the rate of 7 per cent per annum from 10-12-2001. In spite of receiving the same, the respondent failed and neglected to pay the amount and, therefore, it is very clear that the respondent is unable to pay its admitted dues legally due and payable and the respondent-company has become commercially insolvent. Hence, they filed the above company petition for winding up the respondent-company. 3. The respondent entered appearance through their counsel and filed a counter statement. According to the respondent, the company suffered a set back during the financial year 2001-02 due to the reasons like : (1)The move of the Government of India recovering fertiliser subsidy on an ad hoc basis; (2)The company s DAP plants could not meet the production targets due to funds constraints as well as stiffening of terms of supply imposed by the goods raw material suppliers and there was a shortage in the company s fertiliser production in the financial years 2001-02 and 2002-03. 4. Therefore, it resulted in under-utilisation of plant capacities, thereafter, sharp rise in the specific consumption norms and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to pay its debts and, therefore, a case has been made out for winding up the same. He further pointed out that the defence put out by the respondent is not a bona fide one with regard to the goods supplied by the petitioner by alleging that they were not as per the specification prescribed by the Government of India. He further added that when the company has become insolvent as it is not able to pay its debts and when there is no bona fide defence put up by the respondent-company, a case has been made out to wind up the company as per the provisions of the Act. In support of his submissions, he relied on the following decisions : 1. Pradeshiya Industrial Investment Corpn. of Uttar Pradesh v. North India Petro Chemical Ltd. [1994] 79 Comp. Cas. 835 (SC). 2. National Conduits (P.) Ltd. v. S.S. Arora [1967] 37 Comp. Cas. 786 (SC). 3. Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125 (SC). 4. Mediqup Systems (P.) Ltd. v. Proxima Medical System GMBH [2005] 59 SCL 255 (SC). 8. Per contra , learned counsel for the respondent-company submits that the failure to pay its debt is only temporary due to reasons beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, I am rejecting the attempt made by the respondent that there was a dispute with regard to the quality of the goods supplied and also with regard to the amount due and payable by them to the petitioner. What was attempted by the respondent is that they did not accept the interest portion and, therefore, that was in dispute. But, the respondent did not even pay the entire principal amount and, therefore, there was no merit in their contention that there is a dispute and, therefore, the petitioner should only approach the civil court to recover the outstanding amounts. 11. In Mediqup Systems (P.) Ltd. s case ( supra ), the Hon ble Supreme Court held as under : 19. This Court in catena of decisions held that an order under section 433( e ) of the Companies Act is discretionary. There must be a debt due and the company must be unable to pay the same. A debt under this section must be a determined or a definite sum of money payable immediately or at a future date and that the liability referred to in the expression unable to pay its dues in section 433( e ) of the Companies Act should be taken in the commercial sense and that the machinery for winding up will not be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... National Conduits (P.) Ltd. s case ( supra ), the Hon ble Supreme Court held that a petition for winding up cannot be placed for hearing before the Court unless the petition is advertised and that is cleared from the terms of rule 24(2) of the Companies (Court) Rules, 1959. 16. In the light of the above settled legal principles, if the facts of the present case are considered, I am of the considered view that the debt due to the petitioner-company was duly established and it is a determined sum of money payable by the respondent. That apart, it has also been established that the respondent was unable to pay its dues. In fact, the liability to pay also was admitted by the respondent. A weak attempt was made to put up a defence which is not a substantial one and there is no bona fide dispute with regard to the sum payable towards the principal. Therefore, I am of the considered view that the petitioner can very well maintain the company petition. In the circumstances, the following order is passed : ( i )Admit. Notice returnable by 28-4-2009. ( ii )The petitioner is directed to publish the company petition in one issue of Tamil daily Malai Murasu , one issue of English ..... X X X X Extracts X X X X X X X X Extracts X X X X
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