2017 (8) TMI 253 - HC - Companies Law

Court admits company petition for non-payment of Natural Gypsum, defers liquidation, grants final settlement opportunity.

AI-Rawas Mining Co. LLC Versus ASA Portfolio Private Limited

The court admitted the company petition due to the respondent's failure to honor payment commitments for Natural Gypsum supplied by the petitioner, ... Outstanding dues - winding up petition - Held that:- The respondent had neglected to pay to the petitioner due to its relations becoming sour after October 2013 when the petitioner decided not to transact any further business with it. The respondent then blocked the balance payment. Despite the petitioner being shown, in its sundry creditors list till the year ending on 2014, the respondent suddenly showed the petitioner as a sundry debtor for the alleged losses it suffered on account of the conduct of the petitioner is nothing but a plot to avoid due payments to the petitioner which it neglected to pay despite promises made. The respondent failed to prove that its debt is a disputed debt. Its neglect to pay the balance amount without any cogent or sufficient ground rather reveal its inability to pay, hence there is no reason as to why the company petition be not admitted against the respondent. In view of the above, this petition is admitted. Citation be published in the “Statesman” (English edition) and “Jansatta” (Hindi edition) in accordance with Company (Court) Rules, 1959. However, publication of the citation and appointment of the provisional liquidator is deferred and one opportunity is given to the respondent company to pay the amount found already due and payable to the petitioner with interest at the rate of 8% per annum with effect from 25.02.2015 when the statutory notice was served on the respondent company. The amount be paid within one month failing which the petitioner shall be entitled to publish the citation and apply for appointment of the Provisional Liquidator. Issues:1. Disputed debt between the petitioner and respondent regarding the supply of Natural Gypsum and outstanding payments.2. Failure of the respondent to honor commitments and make due payments, leading to a company petition.3. Allegations by the respondent of the petitioner breaching business agreements and causing losses, disputing the debt.4. Examination of documents and correspondence to determine the disputed nature of the debt.5. Discrepancies in the balance sheets regarding the debt owed by the respondent to the petitioner.6. Analysis of the purchase order, invoices, bills of lading, and correspondence to ascertain the debt validity.Analysis:1. The petitioner supplied Natural Gypsum to the respondent as per a purchase order, invoiced for USD 8,00,325.23, with an outstanding amount of USD 2,43,925.43. The respondent failed to make full payments despite partial payments, leading to a disputed debt situation. The respondent's evasion of communications and statutory notice further escalated the issue.2. The respondent alleged that the petitioner breached agreements by directly dealing with clients introduced by the respondent, causing losses. However, the petitioner denied such claims, emphasizing the respondent's failure to pay outstanding dues. The respondent's defense of investing in the petitioner's business was contradicted by the petitioner's records of pending payments.3. Examination of documents and correspondence revealed conflicting claims, with the respondent failing to prove its investment allegations or the disputed nature of the debt. The balance sheets showed inconsistencies in portraying the petitioner as a creditor or debtor, raising doubts about the respondent's credibility.4. The court scrutinized the purchase order details, invoices, bills of lading, and correspondence, finding no substantial evidence supporting the respondent's claims of investment or partnership. The respondent's delayed responses and excuses for non-payment indicated financial constraints rather than disputed debt.5. Considering the evidence and arguments presented, the court admitted the company petition, deferring publication and liquidation proceedings to allow the respondent a final opportunity to clear the outstanding amount with interest. Failure to comply within the specified timeframe would lead to further legal actions by the petitioner.This detailed analysis of the judgment highlights the complex nature of the disputed debt case, the conflicting claims between the parties, and the court's decision based on the evidence and legal considerations presented during the proceedings.