1984 (3) TMI 284 - HC - Companies Law

Court denies winding up petition, advises civil claim due to disputed debt.

Globe Detective Agency (P.) Ltd. Versus Subbiah Machine Tools (P.) Ltd.

The court rejected the company's petition for winding up the respondent company under sections 433(e) and (f) of the Companies Act, 1956. The court found ... Winding up – Powers of tribunal on hearing petition Issues:- Petition for winding up a company under section 433(e) and (f) of the Companies Act, 1956.- Dispute over payment for security services provided by the petitioner company to the respondent company.- Allegations of negligence by security guards leading to thefts at the respondent company's premises.- Counter-claims by the respondent company for losses incurred due to negligence of guards and termination of security arrangement.- Jurisdiction of the court to entertain the petition for winding up.Detailed Analysis:The petitioner, a company incorporated under the Companies Act, sought to wind up the respondent company under sections 433(e) and (f) of the Act due to disputes over payment for security services provided. The petitioner alleged that it was appointed to provide security guards at the respondent's factory premises, but differences arose leading to termination of services. The respondent denied liability, claiming negligence by the guards resulted in thefts at their premises, leading to losses. Both parties exchanged correspondence regarding the disputed claims, with the respondent asserting counter-claims for losses incurred due to negligence and termination of the security arrangement.The court examined the defense raised by the respondent company, emphasizing that the court's jurisdiction under section 433 of the Act is limited to cases where the debt is admitted, even if the quantum is in dispute. The court noted that the respondent had an arguable defense regarding the alleged debt, and the petitioner should pursue the claim in a civil court. The court highlighted that the respondent's balance-sheet did not indicate an inability to pay the claimed amount, further supporting the decision not to entertain the winding-up petition.The court referenced the case of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries P. Ltd., emphasizing that when a debt is disputed, the company court should not proceed unless the dispute lacks a tenable defense or is not a bona fide denial of the debt. In this case, the court concluded that the petitioner should pursue its claim through appropriate civil proceedings rather than seeking winding up of the respondent company. Consequently, the company petition for winding up was rejected, and the parties were advised to resolve their disputes in a civil court.