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TMI Blog2011 (8) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is involved in the fire accident while on transit. Invocation of winding up proceedings, in the given facts and circumstances, is misconceived. company petition is dismissed - CO. PETITION NO. 184 OF 2003 - - - Dated:- 2-8-2011 - B. SESHASAYANA REDDY, J. Ch. Ramesh Babu for the Petitioner. B. Chandrasen Reddy for the Respondent. JUDGMENT 1. By this company petition under sections 433(c), 434(1)(a) and 439(1)(b) of the Companies Act, 1956 read with rule 95 of the Companies (Court) Rules, 1959, the petitioner, M/s. Surat Goods Transport Service, a partnership firm registered under the Indian Partnership Act, 1932 (hereinafter referred to as "the petitioner"), seeks an order of winding up against the respondent-M/s. Golkonda Engineering Enterprises Ltd., a public limited company having its registered office at Surya Towers, S.P. Road, Secunderabad (hereinafter referred to as "the respondent"). The respondent-company is one of the group companies of M/s. Surana group having functional and financial integrity. 2. The petitioner is doing business of transportation of goods of the customers as per the orders placed by them from time to time. The respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... winding up. 4. Notice to the respondent came to be ordered on December 1, 2003. The respondent entered appearance and filed counter. 5. It is stated in the counter that an amount of Rs. 1,50,000 paid by the petitioner was not credited to the account of the respondent. The statement of account filed by the petitioner is false and the respondent is not liable to pay interest at the rate of 21 per cent. per annum, on delayed payments. The amount claimed by the petitioner has been denied. The respondent has not received the legal notice dated February 14, 2003 said to have been sent by the petitioner demanding payment of Rs. 7,12,269 together with interest at 21 per cent. per annum. The respondent received the legal notice dated May 6, 2003 for which a suitable reply has been issued to the petitioner. The petitioner failed to deliver 70 boxes of jointing kits under each of the two LR Nos. 028587 and 029588 dated October 11, 2001 to the consignee. The petitioner withheld the material for want of payment of certain amounts alleged to have been due and payable. The petitioner has also not delivered plastic insolated copper wire worth Rs. 8,00,000 to the consignee, i.e., Paramou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuary 1, 2001. The petitioner delivered the consignment neither to the consignee nor returned to the respondent. The value of the said consignment is approximately about Rs. 6,00,000. The petitioner is liable to pay the value of the consignment sent to MTNL, Mumbai and the value of the material sent to Paramount Cables, New Delhi, both worth of Rs. 20,19,404 together with interest as per section 8 of the Carriers Act, 1865. The petitioner having kept lull for about two years, issued another legal notice dated May 6, 2003 claiming Rs. 5,01,533 towards freight charges. The respondent-company got issued a reply notice dated May 29, 2003. If the alleged arrears of freight charges from the net value of material withheld by the petitioner is adjusted, the respondent has to get a sum of Rs. 8,91,736 with interest apart from damages for loss of material. The respondent raised a bona fide and honest dispute even before the petitioner issued the statutory legal notice. Hence, the dispute with regard to the liability towards the petitioner is bona fide, in which case the petition is liable to be dismissed. 6. On hearing counsel appearing for the parties, the company petition came to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated November 7, 2001 issued on behalf of the petitioner firm. Exhibit R7 is the legal notice dated May 6, 2003 issued by M. Radha Krishna Murthy to the respondent. Exhibit R8 is the reply to the legal notice dated May 28, 2003 issued by the respondent to the petitioner. Exhibit X1 is the letter dated August 1, 2001 addressed to the petitioner by the respondent enclosing the statement detailing the cheques given to the petitioner. Exhibit X2 is the acknowledgment dated April 3, 2001 signed by the respondent. 9. Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondent. 10. Learned counsel appearing for the petitioner submits that the respondent-company having availed the transport service of the petitioner firm failed to pay the transport charges. The respondent admitted the liability to a sum of Rs. 7,12,269 under letter dated November 15, 2011, which has been exhibited as exhibit P7. The respondent having admitted the liability neglected to pay the same, which constitutes inability of the respondent to pay undisputed amount, in which case the respondent-company is liable to be wound up. Learned counsel laid much emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to exercise of lien over the material entrusted for transport towards freight charges. The petitioner informed the respondent with regard to release of the consignment, on payment of the freight charges and despite repeated reminders to the respondent, the respondent did not choose to pay the freight charges and thereby, compelled the petitioner firm to retain the consignment. 12. Learned counsel appearing for the respondent submits that the petitioner, having accepted the transport of the goods for delivery to the consignee, failed to handover the goods to the consignee and thereby, committed breach of the contract and the petitioner being a defaulting party cannot be permitted to contend that the goods came to be retained in exercising lien towards freight charges. He would also contend that the signatory to exhibit P7 letter dated November 15, 2001 is not an authorised signatory on behalf of the respondent-company and therefore, the contents therein do not bind the respondent-company. In a way, the contention of the respondent is that the respondent never accepted the liability as projected in exhibit P7 letter. He would also submit that the respondent at the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt ; and (2) The company must be unable to pay the same. The Supreme Court in catena of decisions has held that an order under section 433(e) of the Companies Act, 1956 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 inability being referred to in the expression "unable to pay its debts" in section 433 of the Companies Act should be taken in the commercial sense and that the machinery for winding up will not be allowed to utilise merely as a means for realisation of debts due from the company. 16. Rules as regards the dismissal of winding up petition based on disputed claims are stated by the Supreme Court in Madhusudan Gordhandas v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp Cas 125. The Supreme Court held that if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The principles on which the court acts are : ( i ) that the defence of the company is in good faith and one of sub-stance ; ( ii ) the defence is likely to succeed in point of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall issue a cheque for Rs. 2,00,000 of the current date and further five cheques for the balance amount upon settlement of accounts, i.e., subject to delivery of the goods of P. M. Telecom to MTNL Bombay and goods of M/s. Golkonda Engineering to paramount communications, New Delhi. Instead of releasing the said material, the petitioner demanded for down payment of Rs. 10,00,000 and balance in four cheques along with interest, which put loss of the contract to the respondent-company. The jointing kits are used for telecom purpose and not a fast moving item in the market and with a shelf life of one year only from the date of manufacturing. Thus the petitioner has high handedly withheld the entire consignment worth about Rs. 14,19,404. Till this date, the said consignments have not been delivered causing loss of Rs. 14,19,404 to the respondent being the cost of the material, interest loss at 2 per cent. per month on the said money of the material under the said consignment, loss of business and huge damages." 19. It is a matter of record that the petitioner firm filed a suit against M/s. Kaveri Industries, one of the group companies of Surana Industries for recovery of the fre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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