TaxTMI 
TaxTMI 
2017 (5) TMI 1321
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....respondent entered into an agreement for supply of sugar mill house machinery and equipments required by the respondent for their sugar plant situated in Karjol village, Bijapur District. According to the said agreement, the petitioner was required to supply machinery, and equipment worth Rs. 25.70 Crores. Further, according to the petitioner, it has supplied the machinery and equipment worth Rs. 12,43,01,035/-. However, according to the respondent, the petitioner has supplied machinery and equipment worth merely Rs. 11.20 Crores. 3. Further, during the course of supply of machinery, and equipment, the respondent defaulted in paying the amount due to the petitioner. According to the petitioner, on 03.05.2012, the officials of the petitioner personally visited the Corporate office of the respondent with regard to the non-payment of the due amount. The respondent assured the petitioner that it will make the payment of the amount due. However, despite the said assurance, the respondent failed to do so. Therefore, by e-mail dated 19.05.2012, the petitioner reminded the respondent about its commitment. The respondent assured the petitioner that by next week they will release Rs. 3 Cr....
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....pondent owes a debt of Rs. 6.5 Crores. Since the respondent has failed to pay the said amount, the respondent deserve to be wound up by this Court. 7. On the other hand, Mr. Ganapati Hegde, the learned Counsel of the respondent, has pleaded that firstly, the petitioner has filed the winding up petition in order to pressurize the respondent to cough up the amount. However, there are bona fide disputes which exist between the petitioner and the respondent. Secondly, the contract entered between the parties was for Rs. 25.70 Crores, whereas the petitioner had supplied machinery and equipments worth only Rs. 11.20 Crores. Therefore, the petitioner has failed to fulfill its obligations under the contract dated 05.05.2011. Since time was of essence, since there was an inordinate delay in supplying the machinery and equipments, since the project was getting unnecessarily delayed due to the lapses committed by the petitioner, by letter dated 26.12.2012, the respondent cancelled the entire order. Thus, presently no contract exists between the parties. Thirdly, by e-mail dated 10.01.2013, the respondent has clearly informed the petitioner that after reconciling the accounts, the res....
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....e petitioner and the respondent are already before the Arbitrary Tribunal, since the case raises complicated and disputed questions of fact, the winding up petition, which is a summary proceeding, should not be continued by this Court. Thus, the petition deserves to be dismissed by this court. 8. Heard the learned counsel for the parties. 9. In the case of IBA Health (I) (P) Ltd. v. Info-Drive Systems Sdn. Bhd., [ (2010) 10 SCC 553], the Hon'ble Supreme Court has observed as under: 20. The question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding-up for discharge of that liability? In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt? A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The Company Court, at that stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor....
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....determining whether the refusal to pay debt is a result of a bona fide dispute as to the liability or whether it reflects an inability to pay. Of course, if there is no dispute as to the company's liability, it is difficult to hold that the company should be able to pay the debt merely by proving that it is able to pay the debts. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterised as a standalone ground. The Hon'ble Supreme Court further held as under: 31. Where the company has a bona fide dispute, the petitioner cannot be regarded as a creditor of the company for the purposes of winding up. "Bona fide dispute" implies the existence of a substantial ground for the dispute raised. Where the Company Court is satisfied that a debt upon which a petition is founded is a hotly contested debt and also doubtful, the Company Court shou....
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....is substantially disputed. A Company Court, therefore, should be guarded from such vexatious abuse of the process and cannot function as a debt collecting agency and should not permit a party to unreasonably set the law in motion, especially when the aggrieved party has a remedy elsewhere. Therefore, the principles enunciated above by the Hon'ble Supreme Court would have to be kept in mind while deciding the present winding up petition. 10. Admittedly, according to the contract dated 05.05.2011, the petitioner is supposed to have supplied machinery and equipments worth Rs. 25.70 Crores. According to the petitioner, it had supplied equipment and machineries worth Rs. 12,43,01.035/- Crores. But according to the respondent, the petitioner had supplied equipment and machineries worth only Rs. 11.20 Crores. Thus, there is a dispute as to the exact value of the machinery and equipment supplied by the petitioner to the respondent. 11. While on the one hand, the petitioner complains that the respondent had failed to pay the due amount as and when the amount became due, the respondent stresses the fact that the petitioner had failed to deliver the equipment and machinery as and....
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....e disputes between the petitioner, and the respondent with regard to different heads of payment and deductions. 15. Admittedly, the contract dated 05.05.2011, contained an arbitration clause. Undoubtedly, both the parties are before an Arbitral Tribunal created under the contract. Already the petitioner has filed an application under Section 9 of the Arbitration & Conciliation Act, before the District Judge, Ghaziabad. Moreover, the petitioner has also filed an application under Section 14 of the said Act before the District Judge, Ghaziabad. Meanwhile, the respondent, too, has filed a petition, namely O.P.No.76/2017, under Section 14 of the said Act before the Hon'ble Madras High Court. Thus, both the parties have already taken recourse to the arbitration proceedings. Once the petitioner has taken recourse to the remedy provided under the Contract for voicing his interest, the petitioner cannot be permitted to do forum shopping by filing the present company petition. According to the learned counsel for the petitioner, the arbitration proceedings are embroiled in certain difficulties. But, therefore, it seems that the present winding up petition has been filed with the moti....