TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court dismisses company petition for failure to prove debt, emphasizes winding up not for disputed debts.</h1> <h3>Sulakshana Circuits Ltd Versus Rolex Meters Pvt. Ltd</h3> Sulakshana Circuits Ltd Versus Rolex Meters Pvt. Ltd - TMI Issues Involved:1. Whether the petitioner company has established indebtedness of the respondent company, as claimed in the petitionRs.2. If the answer to the first point is in the affirmative, whether winding up of the respondent company is warranted under Section 433(e) of the Companies Act, 1956Rs.3. Whether on the facts and in the circumstances, winding up of the respondent company is warranted under Section 433(f) of the Companies Act, 1956Rs.Issue-wise Detailed Analysis:Point No.1:The petitioner company claims a debt of Rs. 14,47,540/- along with interest at 24% per annum, alleging that the respondent company has failed to pay for the supplied PCBs. The respondent company disputes this claim, arguing that the petitioner did not account for defective/rejected PCBs and that, in fact, the petitioner owes the respondent Rs. 2,57,533/-. The respondent's reply to the statutory notice highlights that the account has not been reconciled and requests the petitioner to lift the rejected material and settle the account. The petitioner counters that the PCBs were acknowledged as 'RECEIVED CONTENTS VERIFIED' and that the rejection claim is an afterthought. However, the court notes that there is no clear evidence on whether the rejected PCBs were within the stipulated shelf life or if the respondent timely informed the petitioner. The court, referencing the Supreme Court's decision in M/s. MADHUSUDHAN GORDHANDAS & CO. v. MADHU WOOLLEN INDUSTRIES PVT. LTD, concludes that the respondent's defense appears bona fide, and the exact amount of debt cannot be ascertained based on the evidence. Thus, Point No.1 is answered against the petitioner company.Point No.2:Even if Point No.1 were in favor of the petitioner, the court examines whether the respondent company should be wound up under Section 433(e) of the Companies Act, 1956. The court refers to the Supreme Court decisions in M/s. MADHUSUDHAN GORDHANDAS & CO. and IBA HEALTH (INDIA) (P) LTD. v. INFO-DRIVE SYSTEMS SDN. BHD, which state that if a debt is bona fide disputed, the court will not wind up the company. The court emphasizes that winding up petitions should not be used to pressurize companies to pay disputed debts and that the company court should not function as a debt-collecting agency. The respondent's financial statements show substantial profits and a significant order from MSEDCL worth Rs. 25 crores. The court finds no evidence of commercial insolvency and notes that no other creditors have supported the winding-up petition. Therefore, Point No.2 is answered against the petitioner.Point No.3:There are no pleadings or evidence to support the claim that winding up the respondent company would be just and equitable under Section 433(f) of the Companies Act, 1956. The court notes that the respondent company has been profit-making for the last three years and finds no grounds for winding up. Thus, Point No.3 is answered against the petitioner.Conclusion:The company petition is dismissed. The petitioner company is at liberty to establish the debt of the respondent company by approaching the competent Court of law in accordance with law. There shall be no order as to costs.
TaxTMI 
TaxTMI 
