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Andhra Pradesh High Court
Judges : K.S.SHRIVASTAVA
Color Coats, Sultan Bazar, Hyderabad - Appellant
Versus
Venkataramana Hotels Ltd, Banjara Hills, Hyderabad - Respondent
Decided On : 02-11-98
Companies Act, 1956 – Section 433e and 434 (1) (A) read with Section 439 – Winding up – Statutory notice – Case of the petitioner company in brief is that the respondent company had paid a sum of Rs. 50,000. 00and thereafter it did not pay any amount – Therefore, on 21-9-1991 the petitioner company sent a letter demanding the outstanding amount, to which the respondent company replied vide tetter dated 21-10-1991 that within a months time the claim would be settled – Again on 25-10-1991 and on 13-1-1992 demands were made through demand notices. But the respondent company did not reply – Therefore, on 12-8-1994 the petitioner company sent a statutory notice demanding Rs. 4,37,532-44 ps – This notice was neither replied nor complied – Therefore, the petitioner - company demands that the respondent company should be wound up – Held, It has alleged that through cheque dated 16-3-1987 an amount of Rs. 2,100. 00 had been paid. Similarly, on 10-1-1991 an amount of Rs. 60,000. 00through cheque had been paid – The last payment of Rs. 29,000. 00 was paid through cheque dated 6-1-1992 and an amount of Rs. 15,000. 00 was paid by hand through two receipts – He has also filed the receipts – Whether the person who has signed the receipt was authorised by the petitioner-company to accept the payment or not is a disputed question of fact – In the statement of accounts prepared by the Bank of the respondent-Company, a debit entry of Rs. 29,000. 00 is shown under the head particulars paid to the petitioner-company – Whether the cheque was encashed by the petitioner-company or not is a debatable question which can be decided only on assessment of the oral and documentary evidence to be filed on record – Allegation of the petitioner-company that certain amounts were paid by the respondent-company, for the work done for the residential accommodation, of its Managing Director, is also a disputed question of fact – Aforementioned disputed questions of fact cannot be decided until oral evidence is recorded during trial – Court reach the conclusion that there is a bona fide dispute regarding the claim of the petition-Company that an amount of Rs. 2,72,533. 42 ps. is recoverable from the respondent- Company – Bonafide dispute regarding the liability of the respondent-Company can be decided only in the Civil Court after full trial – There is also no material to infer that the respondent- Company had become commercial insolvent – Company Petition Dismissed
( 1 ) THIS is an application under Section 433e and 434 (1) (A) read with Section 439 of the Companies Act, 1956 for winding up the respondent-company.
( 2 ) THE admitted facts in short are that the petitioner company carries on the business of painting work and at the request of the respondent company it had done painting work amounting to Rs. 16,91, 167-42 ps. and the respondent company paid an amount of Rs. 12,53,634. 98 ps. in 25 installments.
( 3 ) THE case of the petitioner company in brief is that on 11-5-1991 the respondent company had paid a sum of Rs. 50,000. 00and thereafter it did not pay any amount. Therefore, on 21-9-1991 the petitioner company sent a letter demanding the outstanding amount, to which the respondent company replied vide tetter dated 21-10-1991 that within a months time the claim would be settled. Again on 25-10-1991 and on 13-1-1992 demands were made through demand notices. But the respondent company did not reply. Therefore, on 12-8-1994 the petitioner company sent a statutory notice demanding Rs. 4,37,532-44 ps. This notice was neither replied nor complied. Therefore, the petitioner - company demands that the respondent company should be wound up.
( 4 ) THE respondent company denied the allegations and alleged that on 16-3-1987 an amount of Rs. 15,000/- was paid through cheque. Similarly on 14. 4. 1988 an amount of Rs. 1,00,000. 00 was paid through cheque. On 16-4-1988 another amount of Rs. 50,000. 00 was paid through cheque. In addition to this amount of Rs. 1,65,000. 00, the respondent company had also paid from time to time an amount of Rs. 2,100. 00, 60,000/, 10,000/-, 15,000/- and 29,000/ -. If further submitted that work amounting to Rs. 26,913. 00 was done by other company and not by the petitioner company. Thus according to the respondent company nothing remained to be paid as on 23-3-1991 and therefore, the petition is liable to be dismissed. It also alleged that the claim is barred by limitation, because the petition has been filed beyond the period of three years therefrom, and the letter dated 21-10-1991 is not an acknowledgment of debt. It lastly urged that no statutory notice as required under Section 434 of the Indian Companies Act was ever served on the respondent company.
( 5 ) I will consider the last objection first. On perusal of the letters dated 12-8-1994 it appears that the demand for payment of Rs. 4,37,532-44 Ps. has been made being the outstanding amount of painting charges and it was further requested that the amount should be paid within a period of 15 days. Under Section 434 of the Indian Companies Act, only a demand is to be made for the debts due, and in case the payment is not made within a period of three weeks from the date of receipt of notice it is to be presumed that the respondent company is unable to pay the dues. The notice may be sent under registered cover with acknowledgment due and it should be signed either by the creditor or his agent or his legal advisor. It is not the requirement of Section 434 of Indian Companies Act that it should be necessarily be mentioned in the notice that in the event of non compliance the creditor will take steps to apply for the windingup. It is also not necessary that the notice should specifically mention that it is sent under Section 434 (1) (A) of the Companies Act. No form is prescribed for sending the notice under Section 434 of the Indian Companies Act. Under these circumstances, it is difficult to accept the submission of the learned Counsel for the respondent company that the notice is invalid merely because it does not contain any indication that in the event of default the petitioner company would take action under Section 433 of the Indian Companies Act. It does not appear that notice under Section 434 is a condition precedent for initiation of action under Section 433 of the Indian Companies Act.
( 6 ) THE second objection of the respondent company is that the claim is barred by limitation.
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