Court dismisses winding-up petitions, finding respondent's disputes genuine. Late payment charges unenforceable. Petitioner faces costs.

The court dismissed the petitions and pending applications, finding that the respondent company had raised bona fide disputes regarding the amount claimed by the petitioners. The court held that the respondent's offer to pay the disputed amount indicated its capability to pay debts and commercial solvency. Additionally, the court ruled that the late payment charges claimed were not enforceable due to a bona fide dispute. It was concluded that the winding-up proceedings were an abuse of court process, with the petitioner seeking to exert improper pressure on the respondent. The court imposed costs on the petitioner for pursuing the proceedings unfairly.

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Issues Involved:
1. Whether the defense raised by the respondent company is bona fide or a sham defense.
2. Whether the petition is maintainable in view of the offer made by the respondent to pay an amount of Rs. 1,79,00,000/- to the petitioner.
3. Whether the respondent is liable to pay late payment charges claimed by the petitioner.
4. Whether the respondent company is unable to pay its debts and is liable to be wound up under Section 433(e) of the Companies Act, 1956.

Issue-wise Detailed Analysis:

1. Bona Fide or Sham Defense:
The primary controversy is whether the defense raised by the respondent company is bona fide or a sham. The respondent disputes the liability claimed by the petitioners, citing issues with the quality of goods supplied and non-adjustment of debit notes. The respondent admitted owing Rs. 1,56,00,000/- but offered Rs. 1,79,00,000/- because of dishonored cheques, which led to proceedings under Section 138 of the Negotiable Instruments Act, 1881. The court noted that the respondent had raised issues about the inferior quality of goods and had issued debit notes before the statutory notice under Section 434(1)(a) of the Companies Act was issued. Therefore, the court found that there were bona fide disputes regarding the amount claimed by the petitioners.

2. Maintainability of the Petition:
The respondent's offer to pay Rs. 1,79,00,000/- was not accepted by the petitioner, who insisted on late payment charges as well. The court emphasized that a petition for winding up is maintainable if the company is unable to pay its debt. However, if the claim is disputed and the company is solvent, the proceeding for winding up is not maintainable. The court found that the respondent's tender of the disputed amount indicated that the respondent was capable of paying its debts and was not commercially insolvent.

3. Liability for Late Payment Charges:
The petitioner claimed late payment charges at 4% per month, which was mentioned in the invoices. The respondent contended that this clause was not agreed upon and was struck off in the acknowledged invoices. The court noted that there was a bona fide dispute regarding the late payment charges, which could not be considered as an admitted debt. The court referenced the Rajasthan High Court's decision in Kitply Industries Ltd. v. Hari Narain & Sons (P.) Ltd., which held that mere inclusion of an interest clause in invoices does not constitute an agreement for payment of interest. Therefore, the court found that the late payment charges were not enforceable in this proceeding.

4. Inability to Pay Debts and Winding Up:
The court reiterated that winding up proceedings are not for debt recovery and should not be used to exert improper pressure on the company. The Supreme Court in IBA Health (I) (P) Ltd. v. Info-Drive Systems Sdn. Bhd. emphasized that winding-up petitions should not be used to force payment of a bona fide disputed debt. The court found that the respondent was not unable to pay its debts and that the petitioners were using the winding-up proceedings to pressurize the respondent. The court concluded that the present proceedings were an abuse of the process of the court.

Conclusion:
The court dismissed the petitions and pending applications with costs of Rs. 5,000/-, noting that the proceedings were being pursued by the petitioner to extract further sums disputed by the respondent. The court found that the conduct of the petitioner was less than fair and that the proceedings under Section 138 of the Negotiable Instruments Act were also being pursued to pressurize the respondent.

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