TaxTMI 
TaxTMI 
2016 (4) TMI 966
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....d to manage its affairs forthwith. (c) Cost of this petition be provided for. (d) Such further and other orders be made and direction be given as this Hon'ble High Court may deem fit and proper in the facts and under the circumstances of the matter. And for which act of kindness the humble petitioner is as duty bound shall every pray." 3. The respondent-company namely, M/s JUD Cement Limited was incorporated on 04.07.2005 under the provisions of the Companies Act, 1956 as a Private Company Limited. The respondent-company was earlier known as JUD Cements Private Limited. The registered office of the respondent-company is situated at GS Road, Hanumanbux Umadut, Shillong, Meghalaya, India-793001. The respondent-company was on or before about 15.04.2008 converted into a Public Limited Company and accordingly, a fresh certificate of Incorporation dated 15.04.2008 was issued by Registrar of Companies. As such, it is now a Public Limited Company and is known as M/s JUD Cements Ltd. 4. The main objects of the respondent-company was formed and incorporated are contained in Clause III (A) (1) of the Main Objects Clause of the Memorandum of Association of the company. One of th....
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....nly), the petitioner received an amount of Rs. 25,00,000/- (Rupees twenty five lakhs only) on 01.10.2009 and Rs. 25,00,000/- (Rupees twenty five lakhs only) on 31.10.2009 from the respondent-company. However, the said two cheques of Rs. 50,00,000/- (Rupees fifty lakhs only) were dishonoured. Thus, the petitioner filed a case under Section 138 of the Negotiable Instruments Act, 1881 in respect of the said two cheques and the proceedings thereof are pending before the court. 6. The petitioner had approached the respondent-company as well as the Chairman and Managing Director from time to time for obtaining its due and legally enforceable liability of remaining amount payable by the respondent-company but under one pretext or other, the respondent-company had delayed the payment. Ultimately, the respondent-company during the year 2010-2011 made a partial repayment of Rs. 1,80,07,277/- (Rupees one crore eighty lakhs seven thousand two hundred seventy seven only) apart from Rs. Rs. 50,00,000/- (Rupees fifty lakhs only), out of the total legally payable debt and liability of Rs. 3,83,98,224/- (Rupees three crores eighty three lakhs ninety eight thousand two hundred twenty four only). ....
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....2012 (Annexure-4 to the petition) reads as follows:- "WALCHANDNAGAR INDUSTRIES LIMITED (AN ISO 9001 COMPANY) Date:31-05-2012 M/s JUD Cements Ltd. (Earlier JUD Cements Pvt.Ltd.) having its registered office at Anil Plaza, 4th Floor (B-1), Near ABC, Bhangagarh, G.S. Road, Guwahati 781 005 Dear Sirs, Under the instructions of my client M/s Walchandnagar industries Limited having its Registered Office at 3 Walchand Terraces, Tardeo Road, Mumbai 400 034 and Chief place of business at Walchand House 167A, 2/8 + 2/9 Karve Road, Kothrud, Pune-411 038, I have to give you this notice under section 434 (1)(a) of the Companies Act, 1956 and address as under. 1. That you had entered in to a contract dated 15th October, 2006, with my client for purchase of equipments for a new dry processing Cement plant of 1000 TPD capacity, on terms, conditions and covenants as contained in the above referred contract for a total consideration of Rs. 54,78,00,000/- (Rupees Fifty Four Crores Seventy Eight Lakhs only) and further revised to Rs. 57,87,85,000/- (Rupees Fifty Seven Crores Eighty Seven Lakhs Eighty Five Thousand only). 2. That you and my clients acted on this c....
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...., Forty Six Thousand Seven Hundred Eighty Nine and Paise Fifty six only) within three weeks as per section 434(1) (a) of the Companies Act, 1956, failing which my Client will have no alternative but to file a winding up Company Petition before the relevant High Court, and/or any other appropriate Court/s, seeking winding up of the Company, entirely at your risks as to cost and consequences, which please note. Yours faithfully, For Walchandnagar Industries Limited Sd/- General Manager (Legal & Finance) Copy to:- 1. Mr. Adarsh Jhunjhunwala-Chairman & Managing Director C/o: M/s JUD Cements Ltd. Anil Plaza 4th Floor (B-1), Near ABC Bhangagarh, G.S. Road, Guwahati 781 005. 2. Mr. Akshat Jhunjhunwala-Director, C/o: M/s JUD Cements Ltd. Anil Plaza 4th Floor (B-1), Near ABC Bhangagarh, G.S. Road, Guwahati 781 005." 8. The respondent-company is unable to pay its creditors, the admitted debts due and payable, despite statutorily demanded by the petitioner within the period mentioned in the said notice. Thus, the respondent-company is commercially insolvent. Therefore, it is just, fit and equitable that the respondent-company should be wound up ....
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....ed to the satisfaction of the [Tribunal] that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the [Tribunal] shall take into account the contingent and prospective liabilities of the company. (2) The demand referred to in clause (a) of sub- section (1) shall be deemed to have been duly given under the hand of the creditor if it is signed by any agent or legal adviser duly authorised on his behalf, or in the case of a firm, if it is signed by any such agent or legal adviser or by any member of the firm. 439. Provisions as to applications for winding up.- (1) An application to the [Tribunal] for the winding up of a company shall be by petition presented, subject to the provisions of this section,- (a) by the company; or (b) by any creditor or creditors, including any contingent or prospective creditor or creditors; or (c) by any contributory or contributories; or (d) by all or any of the parties specified in clauses (a), (b) and (c), whether together or separately; or (e) by the Registrar; or (f) in a case falling under section 243, by any person authoised by the Cent....
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....ions, if any. (7) A petition for winding up a company on the ground specified in clause (b) of section 433 shall not be presented- (a) except by the Registrar or by a contributory; or (b) before the expiration of fourteen days after the last day on which the statutory meeting referred to in clause (b) aforesaid ought to have been held. (8) Before a petition for winding up a company presented by a contingent or prospective creditor is admitted, the leave of the [Tribunal] shall be obtained for the admission of the petition and such leave shall not be granted- (a) unless, in the opinion of the [Tribunal], there is a prima facie case for winding up the company; and (b) until such security for costs has been given as the [Tribunal) thinks reasonable." 9. Hence, the present application for the prayers mentioned aforesaid. 10. The respondent-company had filed affidavit-in-opposition dated 23.04.2014 wherein, raising preliminary objection vis-à-vis maintainability of the present application for winding up of the respondent-company under Sections 433, 434 and 439 of the Companies Act, 1956. Para 5A of the affidavit-in-opposition dated ....
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....y, the petitioner cannot file two cases seeking the same relief before the two different Courts as the same would amount to abuse of process of law. As such the instant petition is liable to be dismissed being bad in law. d) That the instant petition is not maintainable for non-joinder of necessary parties in as much as the other creditors/Banks/shareholders who also have stake in the Company and whose participation and views in the matter is essential, have not been arrayed as parties in the case and as it is settled that if there is opposition to the making of winding up order by the Creditors etc., the Court will consider their wishes and may decline to make the winding up order. That being the position, the other Creditors of the company is also required to be arrayed as necessary parties in the case and unless their views are taken on board in deciding the case and the instant petition cannot be entertained and is liable to be dismissed being not maintainable for non joinder of necessary parties. e) That the instant petition is not maintainable for non-compliance of the provision of section 439 (8) of the Companies Act, 1956 (corresponding section 272 (6) of ....
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.... filed by the respondent-company read as follows:- "13. That the averments made in paragraph 12 of the Company petition is denied by the Answering Respondent and the petitioner is put to the strictest proof thereof. On the contrary it is stated that every Company faces financial hardships in the course of business and faces situation of delayed payment of its due and debts. But facing a situation financial problem cannot be equated with Company's inability to pay especially when the Respondents have already made partial payments of debts to the petitioner and recourse to winding up process cannot be resorted to whenever a Company faces financial problems as admitted by the petitioner and machinery for winding up cannot be allowed to be utilized merely as a means for realizing debts due from a company. 17. That the averments made in paragraph 16 of the company petition is denied most vehemently by the answering Respondent and the Petitioner is put to the strictest proof thereof. On the contrary it is stated that Respondent company is not commercially insolvent as alleged by the petitioner as its assets still exceeds its liabilities and recourse to winding up petition for payme....
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....respondent-company had already paid the due amount. Accordingly, the respondent-company filed the additional affidavit dated 18.05.2015. Paras 3, 4, 5, 6, 7 & 8 of the additional affidavit dated 18.05.2015 of the respondent-company read as follows:- "3.That the petitioner company had moved this Hon'ble Court by way of a Company Petition under section 433, 434 and 439 of the Companies Act, 1956 for winding up of the Respondent Company and the same was registered as Company Petition No.7 of 2013. The Respondent Company upon receipt of notices has filed its objection inter-alia on various grounds challenging the maintainability of the Company Petition. 4. That on careful perusal of the accounts of the Company and the averments made by the petitioner in the connected company petition No.7 of 2013 and the documents annexed by them, it transpired that the Respondent Company had already paid the entire outstanding amount of Rs. 1,54,11,576/- (Rupees One Crore Fifty Four Lakhs Eleven Thousand Five Hundred and Seventy Six) only as would be evident from Annexure 3 to the Company Petition and correspondence made between the Chief Managing Director of the Respondent Company and the petit....
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....f the pending adjudication before arbitrator Justice Musahary (Retd). The affidavit clarified that in the second reconciliation statement dated 13.04.2011, the outstanding amount of Rs. 1,54,11,576/- was found to be due and payable by the respondent company to the petitioner company in respect of the contract dated 15.10.2006 which is the subject matter of the instant petition and the said amount was arrived at by excluding the amount of Rs. 2,03,60,000/- paid by the respondent company towards the second unit in respect of which the arbitration proceeding is pending. This was indicated in the reconciliation statement dated 13.04.2011 by adding the amount of Rs. 2,03,60,000/- to the opening balance of Rs. 1,20,07,277/- and thus taking the total opening balance to Rs. 3,23,67,277/- this was done because the respondent company in their books of account as on 01.04.2010 have shown the opening balance due to the petitioner company as Rs. 1,20,07,277/- by subtracting the amount of Rs. 2,03,60,000/- as paid towards the project in question while as a matter of fact Rs. 2,03,60,000/- was paid by the respondent company towards the second unit vide contract dated 09.08.2007 and not against th....
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....e to pay its debts" in Section 433(e) of the Companies Act should be taken in the commercial sense. The machinery for winding up will not be allowed to be utilized merely as a means for realizing debts due from a company. If the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. Paras 18, 19, 20, 21, 22, 23, 24, 25, 26, & 27 of the SCC in Mediquip Systems (P) Ltd case (Supra) read as follows:- "18. This Court in a catena of decisions has held that an order under Section 433(e) of the Companies Act is discretionary. There must be a debt due and the company must be unable to pay the same. A debt under this section must be a determined or a definite sum of money payable immediately or at a future date and that the inability referred to in the expression "unable to pay its debts" in Section 433(e) of the Companies Act should be taken in the commercial sense and that the machinery for winding up will not be allowed to be utilized merely as a means for realizing debts due from a company. 19. The respondent is not a creditor and the appellant is not a debtor insofar as US $ 11,000 is concerned. The defence raised by the appellant....
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....e in a position to meet its liabilities as and when they arise. 24. The Madras High Court in Tube Investments of India Ltd. v. Rim and Accessories (P) Ltd: (1990) 3 Comp LJ 322, Comp LJ at p.326 has evolved the following principles relating to bona fide disputes: (i) if there is a dispute as regards the payment of the sum towards the principal, however small that sum may be, a petition for winding up is not maintainable and the necessary forum for determination of such a dispute existing between parties is a civil court. (ii) the existence of a dispute with regard to payment of interest cannot at all be construed as existence of a bona fide dispute relegating the parties to a civil court and in such an eventuality, the Company Court itself is competent to decide such a dispute in the winding-up proceedings; and (iii) if there is no bona fide dispute with regard to the sum payable towards the principal, it is open to the creditor to resort to both the remedies of filing a civil suit as well as filing a petition for winding up of the company. 25. The rules as regards the disposal of winding-up petition based on disputed claims are thus stated by this ....