TaxTMI 
TaxTMI 
2008 (7) TMI 577
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....s of the company. (c )pass any such order or direction as the Hon'ble Court may deem fit and proper in the facts and circumstances of the case." 2. Upon failure to repay the amount of dues outstanding, the petitioner gave a statutory notice to the respondent company under section 434 of the Companies Act, 1956 (for short 'the Act') demanding the dues with interest but the respondent company failed to make payment within statutory period, as a result of which the petitioner was led to file instant company petition for winding up under sections 433, 434 and 439 of the Act. 3. It is averred in the petition that the respondent company is a private limited company incorporated under the provisions of the Act having its office at B-13, I....
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.... petition, which are as under:- "(i )The petitioner himself was the Director of the company till 28-6-2007, when he ceased to be a director on not attending board's meetings by virtues of section 283(1)(g) of the Act. Information in this regard was sent to petitioner vide letter dated 21-7-2007. (ii )Although the company is registered as a private limited company, in fact, it is a partnership concern in which the petitioner was director till 28-6-2007, beside his father Bajrang Lal Bajaj, mother Smt. Gita Devi, brother Ashok Bajaj and brother's wife Smt. Anupama Bajaj. Two directors joined on 10-8-2006 and further two directors joined on 11-9-2006, thus four directors are from the Bajaj family itself. (iii)All the shareholders of t....
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....spondent-company cannot be made liable for any fault of petitioner, who himself is responsible for putting the company to suffer loss. (xii)The obvious collateral purpose of winding up petition is to damage the respondent-company and economically coerce it into subjugation which is sufficient for the court to throw out the winding up petition on this ground alone. (xiii)The petition is filed with oblique motive to pressurize the respondent-company to make the payment of the amount as alleged to be due, while the petitioner and his wife also are shareholders of the respondent-company. (xiv)The dispute involved is a bona fide dispute between the parties and winding up petition is not a legitimate means of seeking to enforce payment o....
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....dings by the time civil decree is awarded by civil court. Even after the decree of civil court the petitioner would be compelled to approach the Hon'ble Court for enforcement of the decree. (v)Learned counsel for the petitioner placed reliance on Abnah Kaur v. Lord Krishna Sugar Mills [ILR 1972 Delhi 413], Rishi Enterprises [1991] 2 GLR 1213 and P.K. Varghese v. JTV Metal Finishers (P.) Ltd. (Vol .63 Comp. Cas. 644)." 6. I have given anxious consideration to the rival submissions. It is well-settled that provisions of section 433 of the Act could not be invoked to coerce a company to make payment of loan. In P.K. Varghese v. J.T.V. Metal Finishers (P.) Ltd. [1988] 63 Comp. Cas. 644 the Karnataka High Court held that section 433 of the....
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....Act should be taken in the commercial sense and that the machinery for winding up will not be allowed to be utilised merely as a means for realising debts due from a company." (p. 49) 8. In Madhusudan Gordhandas & Co. v. Madhu Woollen Industries (P.) Ltd. [1971] 3 SCC 632, their Lordships of the Supreme Court had occasion to consider the circumstances under which the court is justified in ordering winding up of the company. It was indicated in paras 20 and 21 thus :- "20. Two rules are well-settled. First, if the debt is bona fide disputed and the defence is a substantial one, the Court will not wind up the company. The court had dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the....
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....n the meaning of section 433(1)(a) of the Act and petition for winding up is not maintainable. (iii)Dispute with regard to payment of interest is not a bona fide dispute. (iv)The defence of respondent company should be in good faith, one of substance and likely to succeed in point of law." 10. Bearing these principles in mind if I examine the facts of this case, I find that there exists a bona fide dispute between the parties. The petitioner and his wife are the shareholders of the company. The petitioner was Director of company till 28-6-2007 and all the shareholders of the company belong to the family of the petitioner and his father. The respondent-company stated in the reply that the father and mother of the petitioner also pro....