TaxTMI 
TaxTMI 
1998 (10) TMI 395
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....s at Panoli, Ankleshwar in Bharuch District. 2.2 Under a contract dated 9-5-1992, the respondent entrusted to the petitioner work of construction of Phase I and Phase II of the factory building at Panoli and the respondent was to pay to the petitioner the amount of their bills as per the certificates issued by the architect. Against the petitioner's bills for a total amount of Rs. 45,82,994, the respondent had already paid the petitioner a sum of Rs. 45,78,049 leaving a sum of Rs. 4,945. 2.3 By its letter dated 15-6-1994, the respondent awarded to the petitioner another construction work at Panoli factory at the price rise of 17.50 per cent over and above the rates of Phase I & II project, with other conditions remaining same. The petitioner completed the said construction work and submitted bills for Rs. 10,67,921 against which the company has paid a sum of Rs. 9,80,000 leaving a sum of Rs. 87,921. Thus, the total of the outstanding comes to Rs. 92,866. The said bills for Rs. 10,67,921 were also certified by the General Manager (Operations) of the company. 2.4 In view of the failure on the part of the company to pay the aforesaid balance amount of Rs. 92,866, the petitioner ser....
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....Secretary of the respondent to the advocate for the petitioner in response to his notice dated 20-1-1997 it was pointed out by the respondent that the respondent had released a sum of Rs. 25,000 in October 1996 as a final payment and, therefore, it is not correct on the part of the petitioner to state that the respondent failed to reply to the notice. 3.4 It is denied that the respondent is commercially insolvent. On the contrary the respondent-company is a profit-making company and its profit for the year 1996-97 was Rs. 177 lacs. 3.5 The respondent-company is bona fide disputing the claim of the petitioner and, therefore, the petition deserves to be dismissed. 4. On behalf of the petitioner affidavit in rejoinder dated 4-4-1998 has been filed denying the averments and allegations made in the reply affidavit. It is further stated that the work was completed to the full satisfaction of the respondent. The 12th and final bill had been placed by the petitioner on 30-9-1995 and several payments aggregating to Rs. 9,80,000 were made by the respondent to the petitioner towards the said bill, because the respondent had no grievance against the petitioner on account of the delay in ex....
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.... this very respondent-company, this Court has examined at length the scope of summary inquiry in a winding up petition and has laid down the following principles which emerge from an analysis of the decided cases where the company asserts that it has the ability to pay its debts but disputes the particular debt of the petitioner:- 1. Summary Inquiry: When the petitioning creditor makes out a prima facie case that the company, which is a going concern, owes a determinate sum of money or a substantially ascertained sum of money, which is not paid in spite of service of statutory notice, the Court would issue notice to the company to show cause why the petition should not be admitted. If the company disputes the debt, the Court is required to hold a summary inquiry. The company has to prima facie prove all the facts on which the defence rests. In such a summary inquiry, the parties may generally file affidavits and produce documents and in exceptional cases the Court has the discretion even to permit the parties to lead oral evidence. II. Issues: At the admission stage, the Court is required to give its findings on the following aspects:- (i)Whether the petitioner creditor is a c....
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.... stipulated time limit. If the debt is not paid, the Court would ordinarily admit the petition, unless a strong case is made out for not admitting the petition. The Court may, in its discretion even pass a conditional order of admission without an order for advertisement, while giving the finding that the company's defence is not bona fide. (3)Where the Court gives only a prima facie or tentative finding that the company's defence is not bona fide before admitting and advertising the petition the Court must also give a prima facie or tentative finding that the company is commercially insolvent, that is, the company is unable to pay its debts as a going concern. (4)Where the Court gives a finding that the defence raised by the company is a bona fide one, non-payment of such debt cannot amount to neglect to pay debt as contemplated by section 434(1)(a) . Hence, the Court would dismiss the petition without prejudice to the petitioner's right to file or to continue with a suit against the company for recovery of its debt. In such a case, the Company Court may give only a prima facie, i.e., tentative finding because the controversy is to be finally decided in the civil suit. (5)If th....