The main legal point established in the judgment is that a creditor may seek winding up of a company under Section 433 of the Companies Act, but the court may reject the petition if the debt is bona fide disputed and likely to succeed in a civil court.

CHANDRAKANTHARAJ, J.

( 1 ) THIS is a Petition under Section 433 of the companies Act. Petitioner claims that by virtue of an agreement entered into with the respondent company viz. , M/s. Flemming (India) Apotheke Private Limited, he is entitled to receive a sum of Rs. 2,000/- per mensem for the use of certain electrical fittings and taps and shower in the house that belongs to his mother under whom respondent-Company is a tenant. It is further alleged that the respondent- Company paid the said charges upto February, 1984 and defaulted in payments subsequently. As a result thereof, a sum of Rs. 24,000/- was due upto February, 1985. Despite a notice sent by registered post and duly served on the respondent, the amount claimed under the said bail agreement for use of electrical fittings, taps and shower has not been paid nor have the subsequent amounts due after notice, been paid. Therefore, the Company which is indebted to the petitioner not having paid the amount demanded which is in excess of Rs. 500/-, is liable to be wound up.

( 2 ) THE Company has entered appearance and filed its statement of objections. In the objections, it has stated the circumstances stated by the petitioner as to the manner in which it was inducted as tenant is admitted to be true. In regard to the bailment agreement, it has contended that the father of the petitioner one Dr. S. Thimmappa induced the respondent-company to sign an agreement of bailment assuring that the amount so obtained would be used for furnishing the house and they not having furnished after receiving Rs. 24,000/- as advance, petitioner has not paid any amount and he is not liable to pay any amount because the furniture was not given.

( 3 ) WITH those pleadings, the learned company Judge, who heard this matter earlier, directed enquiry and recorded the evidence of the petitioner and his mother as well as the Managing Director of the respondent-Company. Certain documents were marked, but suffice it to make reference only to Exhibit P1 and the oral evidence of the petitioner as well as the oral evidence of r. W. 1, the Managing Director of the Company.

( 4 ) IT is well-settled that a creditor may seek assistance of the Company Court under section 433 to compel payment of moneys due to him. But, where a debt is bona fide disputed and where the claim appears to the court that it is not just, it is open to the court to refuse the request for a winding up order and refer the parties to have their claims adjudicated in a competent civil court having jurisdiction. The number of cases supporting the above view are one to many to be referred to. It suffices to refer to a decision of the Supreme Court in the case of m/s. Madhusudan Gordhandas and Co. v madhu Woollen Industries Private Limited (AIR 1971 SC 2600) to which a more detailed reference will be made later in this order.

( 5 ) THE point for determination is whether the respondent Company is a debtor within the meaning of that expression and in that sense, petitioner is a creditor to whom a sum of Rs. 24,000/- is due as bailment charges under Exhibit PI for the period March 1, 1984 to February 28,1985. The oral evidence of the petitioner is highly imaginative and does not inspire the Court to place any confidence on the Veracity of the assertions made. In examination-in-chief, he has stated that Exhibit P1 is the agreement of bailment and it relates to 8 ceiling fans, 12 tube lights, 4 fancy fittings, 16 stainless steel taps and 1 shower. He has asserted that he has been assessed for rents given by the respondents in respect of those fixtures and Exhibits P2 to p4 are the assessment notices for payment of advance taxes. He says monthly hire is Rs. 2,000/ -. He has stated that these fixtures were given to respondents on hire on 1-5-1983. He has also stated that he did not get any advance from respondent under the agreement. He says the bailment rent is exclusive of the rent payable to the building. He refers to Exhibit P6 as the last re

Click Here to Read the rest of this document