2015 (9) TMI 1254 - HC - Companies Law

Winding-up petition admitted against respondent company for failure to discharge admitted liability.

M/s Venus Petrochemicals (Bombay) Pvt. Ltd. Versus M/s Vannix Industries Pvt. Ltd.

The court found the winding-up petition maintainable as the respondent-company admitted its liability but failed to discharge it. The petition was ... Petition for winding up of the respondent-company - unable to pay dues - respondent-company has admitted to pay the outstanding liability - Held that:- On perusal of the E-mails, it is irresistibly concluded that the respondent-company had failed to pay the admitted liability. In view of the categoric admission of the respondent-company, this Court is made to believe that the respondent-company is unable to discharge the admitted liability and thus, the present petition is liable to be admitted. - Let the factum of admission of the petition be published in the newspapers Issues Involved:1. Maintainability of the winding-up petition.2. Alleged outstanding payment by the respondent-company.3. Alleged misrepresentation by the petitioner-company.4. Alleged defective material supplied by the petitioner-company.5. Admissibility of the dispute as bona fide or mala fide.Detailed Analysis:1. Maintainability of the Winding-up Petition:The petition was filed under Sections 433(e), 434, and 439 of the Companies Act, 1956, for the winding up of the respondent-company. The respondent's counsel argued that the petition was not maintainable as no cause of action had accrued in favor of the petitioner-company, and the relief sought was unsupported by documentary evidence. The petitioner's counsel rebutted by referring to the longstanding business relationship since 2007 and the respondent's failure to deny the purchase orders from 2007 onwards.2. Alleged Outstanding Payment by the Respondent-Company:The petitioner-company supplied chemical materials worth Rs. 77,83,191/- to the respondent-company, which only paid Rs. 5,00,000/-, leaving an outstanding amount of Rs. 72,83,191/-. The petitioner presented telephonic reminders, emails, and a legal notice to substantiate the claim. The respondent acknowledged the outstanding amount in an email but later disputed the quality of the materials supplied.3. Alleged Misrepresentation by the Petitioner-Company:The respondent-company claimed that it ordered Butanol and IPA but was misled into purchasing Mosstanol-L and Mosstanol-120 as substitutes. The court examined purchase orders from 2007 onwards, which consistently showed orders for Mosstanol-L and Mosstanol-120, thereby negating the misrepresentation claim. The court found it hard to believe that the respondent was misled since the orders were placed in a similar fashion over several years.4. Alleged Defective Material Supplied by the Petitioner-Company:The respondent-company alleged that the materials supplied were defective, leading to complaints from their clients and loss of business. However, the respondent failed to provide copies of complaints or debit notes to substantiate this claim. The court scrutinized emails between the parties, which indicated that the plea of defective material was taken half-heartedly and primarily to delay payment.5. Admissibility of the Dispute as Bona Fide or Mala Fide:The court's primary task was to determine the bona fides of the dispute. The court referred to the Supreme Court's decision in M/s Madhusudan Gordhandas & Co. Versus Madhu Woollen Industries Pvt. Ltd., which laid down the law on this issue. The court concluded that the dispute raised by the respondent was not bona fide but rather a tactic to defray payment. The respondent's emails from 2013 further confirmed their acknowledgment of the debt and inability to pay, reinforcing the court's decision to admit the petition.Conclusion:The court found that the respondent-company had admitted its liability and failed to discharge it, thus making the winding-up petition maintainable. The petition was admitted, and the factum of admission was ordered to be published in specified newspapers and the Official Gazette of the Government of Haryana. The case was listed for further proceedings on 28.09.2015.