TaxTMI 
TaxTMI 
2018 (2) TMI 1419
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....etitioner that 8 such purchase orders have remained unpaid. It is further the case of the petitioner that no dispute has ever been raised by the respondent and in fact part payment has been made in an irregular manner and TDS has also been deducted. It is further the case of the petitioner that an amount is due and payable as per the account which is on record to the tune of Rs. 43,33,750/. It is further contended that as no payment was made, a statutory notice was given by the petitioner on 25.5.2013 and the same was sent through RPAD. It is the case of the petitioner that neither the notice was complied with nor any payment was made as per the demand raised in the statutory notice and therefore, the present petition is filed. 4. The respondent herein has filed a detailed affidavitinreply and has denied the contentions and has taken contentions as regards maintainability on the ground of limitation. It is also contended that a Civil Suit being Special Civil Suit no.134 of 2013 was filed by the petitioner against the respondentCompany which has been dismissed by the learned Principal Civil Judge, Ankleshwar vide judgment and order dated 30.12.2016. It is also contended in the said....
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....d and misused by the respondent as a defence which should be discarded by this Court. Mr. Saiyed has relied upon the judgment of the Apex Court in the case of M/s. Vijay Industries v. M/s. NATL Technologies Ltd. AIR 2009 SC 1695 to support his case. It is therefore contended that the matter requires consideration and the petition deserves to be allowed. 6. Per contra, Mr. S.I. Nanavati, learned Senior Advocate for the respondent has opposed the petition and has relied upon the affidavitinreply filed by the respondent. It is contended that the suit being Special Civil Suit no.134 of 2013 is already dismissed by the Civil Court and to the knowledge of the respondent, no appeal is filed against the same. Mr. Nanavati relying upon the crossexamination of the authorized person and Accountant of the petitionerCompany, contended that the said witness has categorically stated in his crossexamination that the amount of Rs. 43,34,750/is not demanded in the suit as the same is not due and payable. It is therefore contended that as such there is no dues and therefore, the petition deserves to be to be dismissed. It is further contended as averred in the affidavitinreply, without prejudice to ....
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....he debt that the Court sees that there is a question to be decided. It must also be remembered that the onus is on the company to bring forward a prima facie case, which satisfies the court that there is something which ought to be tried either before the Court, itself or in an action or by some other proceedings. There are various factors and facets, contours and chronicles emerging from the facts of the case requiring consideration before adjudicating upon the plea of winding up by the Court. When the petitioner is forcing payment of debt, which it knows to be in substantial dispute the evidence may support an action by the company against the petitioner for the tort of malicious prosecution. No monetary loss or special damage to the company need be proved for the presentation of the petition is, from its very nature, calculated to injure the credit of the company. It will be interesting to refer to a decision in A Company (No.003729 of 1982), (1984) 1 W.L.R. 1090, that even in a case where the company in good faith and on substantial grounds disputed the debt and could not know the sum due but was willing to pay a lesser amount, its omission to pay either the statutory demand....
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....lity to establish the locus standi to present a petition under what is now section 124(1) of the Insolvency Act, 1986. The case of an undisputed debt with a genuine and serious crossclaim is different, in that the dismissal or staying of the petition can only be a matter for the discretion of the court, albeit that its exercise may have been narrowed by authority. So, there may be two categories of cases, one disputed debt category and another crossclaim case category. In the present case, there is a bonafide dispute of debt and also substantial dispute of counter claim. The principles, which we have enunciated hereinabove, are extensively, explored in catena of judicial pronouncements. For short, we cannot resist the temptation of referring the following decided cases: (1) Madhusudan Gordhandas & Co. v. Madhu Woolen Industries Pvt. Ltd, (1972) 42 Company Cases, 125 (SC), wherein, it is held that one act of dishonesty on the part of the petitioner is sufficient for rejection of petition. (2) Harinagar Sugar Mills v. Court Receiver, H.C.Bombay, AIR 1966 SC 1707, wherein it has been observed, relying on Palmer's Company Precedents that a winding up order is not a normal ....
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....ompany, In re [1894] 94 SJ 369; [1894] 2 Ch 349 (Ch D)). Where, however, there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantify the debt precisely. (See Tweeds Garages Ltd., In re [1962] Ch 406; [1962] 32 Comp Case 795 (Ch D)). The principles on which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law, and, thirdly, the company adduces prima facie proof of the facts on which the defence depends. Another rule which the court follows is that if there is opposition to the making of the windingup order by the creditors the court will consider their wishes and may decline to make the windingup order. Under section 557 of the Companies Act, 1956, in all matters relating to the windingup of the company the court may ascertain the wishes of the creditors. The wishes of the shareholders are also considered, though, perhaps, the court may attach greater weight to the views of the creditors. The law on this point is stated....
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....2. The principles laid down in the above mentioned judgment have again been reiterated by this Court in Mediquip Systems (P) Ltd. v.Proxima Medical Systems (GMBH) (2005) 7 SCC 42, wherein this Court held that the defence raised by the appellantcompany was a substantial one and not mere moonshine and had to be finally adjudicated upon on the merits before the appropriate forum. The above mentioned judgments were later followed by this Court in Vijay Industries v. NATL Technologies Ltd.(2009) 3 SCC 527. 23. The principles laid down in the above mentioned cases indicate that if the debt is bona fide disputed, there cannot be "neglect to pay" within the meaning of Section 433(1)(a) of the Companies Act, 1956. If there is no neglect, the deeming provision does not come into play and the winding up on the ground that the company is unable to pay its debts is not substantiated and nonpayment of the amount of such a bona fide disputed debt cannot be termed as "neglect to pay" so as to incur the liability under Section 433(e) read with Section 434(1) (a) of the Companies Act, 1956. MALICIOUS PROCEEDINGS FOR WINDING UP 33. We may notice, so far as this case is concerned, there has be....
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....ompany 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." 12. In facts of the case and as per the record of the petition, the picture which emerges is that there are serious disputes as regards the debt and therefore, it is not an admitted debt. Thus, if the debt is not an admitted debt but a disputed debt, the petitioner cannot be permitted to force payment of the debt which is substantially disputed, for which, it cannot be said that the respondentCompany has neglected to pay any statutory demand. Therefore only, because the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is taken and the plant is closed, the respondentCompany cannot be ordered to be wound up at the instance of the present petitioner. In addition to that, as the record indicates, in the suit which was filed by the petitioner being Special Civil Suit no.134/13 which is already dismissed, the authorized person and Accountant of the petitio....