TaxTMI 
TaxTMI 
2014 (7) TMI 1115
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....pany would say, the transaction was carried on for years together. As per the agreement, the rate was to be fixed by Mr. D.P. Jajodia. The carrier did not adhere to the terms and billed at a rate far above the settled rate. Hence, the dispute. The appellant made a claim by issuing notice of demand initially by themselves through letters dated June 28, 2013, July 17, 2013, July 29, 2013 and August 26, 2013. None of the said letters were replied to. However, we find from the letter dated July 29, 2013 there had been meetings between the respective representatives of two companies on July 9, 2013 and July 11, 2013. Despite assurance being given the dues were not forthcoming. From the said letter, we also understand, initially the appellant stopped carrying their goods on credit basis and was charging the ultimate consignee on "freight to pay" basis. Subsequently, it was also discontinued, presumably for huge outstanding. The appellant then issued a statutory notice of demand through their Advocate-On-Record vide letter dated September 2, 2013, inter alia, claiming a sum of Rs. 6.43 crores on August 24, 2013. The statutory notice of demand was also not replied to. The appellant f....
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....ffered to pay off the same in installment. However, the appellant did not agree. We heard the parties at length, Mr. Shaunak Mitra, learned Counsel appearing for the appellant would take us to the pleadings as well as the correspondence that the appellant exchanged with the respondent. Mr. Mitra would contend, once the appellant demanded the sum followed by reminders and ultimately the statutory notice of demand the respondent company was bound to react to the same, if they had any reason to react. None of the letters were replied to that would have a statutory presumption as against the respondent in terms of Section 434 of the Companies Act 1956. According to Mr. Mitra, the respondent miserably failed to rebut such presumption. On merits, Mr. Mitra would contend, he was the sole carrier hence, question of any competitive rate would not arise at all. Had there been any genuine dispute, there should have been contemporaneous reaction on the part of the respondent. Dealing with the contention of the respondent, D.P. Jadodia did not approve the rate, Mr. Mitra would rely upon e-mails referred to above, to show, other officers were also responsible to fix the rate. According ....
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....ct controversy, may we discuss the law on the subject. In a winding up proceeding, the learned company Judge has wide discretion to exercise. Even if the learned Judge was satisfied on the claim of the creditor, it could be refused considering various other aspects. In a civil suit, where creditor seeks a debtor and the debtor has successfully proved his claim decree would be a natural course. In a petition for winding up, it would depend upon various other factors irrespective of proof of claim. At the pre admission stage, the company Court would examine the claim and if it was a just debt that would have no defence from the company, the admission would be inevitable. Section 434 of the Companies Act 1956 would give handle to an unsecured creditor to sue the debtor company for winding up on the strength of the presumption of the insolvency. The provision would provide, when the creditor would raise a demand on the company, the company would have two courses left open, either to secure the claim to the satisfaction of the creditor or dispute the claim with plausible cause. Mr. Mookherjee would rely upon three age old celebrated decisions on the issue, i.e Madhusudan Gordhandas (....
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.... anything left to carry out the day to day business. The learned Judge possibly overlooked his aspect. A creditor who has unpaid dues could only be reasonably satisfied if company has the means to pay. When the creditor serves the notice upon the company asking them to pay off the dues the company has option either to pay off or dispute the same. Even if the company has means to pay and does not pay without any reasonable cause it would be liable to be wound up. However, this question may not be relevant here as the record shows, the company was involved in circumstances due to its precarious financial condition. In our view, his Lordship should have admitted the winding up petition and directed advertisement of notice making the said proceeding a representative action. Emphasis was placed on the advertisement of notice of demand. The petitioning-creditor claimed, they did not receive back the acknowledgment due card. It would have been proper, if the appellant would enquire from the postal authorities about the fate of such undelivered packet, or the acknowledgment due card. They took no step in this regard. However, this ground alone would not be sufficient to deny admission o....
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....ulated therein, to deal with summary proceeding that would also be available for consideration by a Company Judgr dealing with a winding up proceeding, would be apt in the present case and are quoted below: "a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign and the defendant is entitled to unconditional leave to defend. c) if the defendant discloses such facts as may be deemed sufficient to entitle him to defend that is to say although the affidavit does not positively and immediately make it clear that he had a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintif's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as....
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.... not give any plausible explanation why the letters were not dealt with. This would definitely lead to statutory presumption of insolvency. To rebut such statutory presumption, the company would have to raise a bone fide dispute that they failed to raise prior to the initiation of the winding up proceeding by replying to the letters as referred to above. They came out with their defence for the first time in the affidavit in opposition. The defence is not clear to us. It is somewhat confusing. Whatever we could understand, the bills would remain outstanding as those were not as per the settled rate fixed for such purpose. Whether D.P. Jajodia settled it or Vedang, as the case may be, the company would not say, what would be the actual sum as per the settled rate as recorded earlier. Mr. Mitra would quote a figure of Rs. 1,84 crores that would be nowhere near the claim of the appellant. Why there would be so much of difference, was not explained to us. It was the duty of the company to remove all doubts from the mind of the Court, specially when they already suffered a statutory presumption by not replying to any of the correspondence. At the same time, we could not find a defini....