The main legal point established in the judgment is that where substantial and bona fide disputes exist against the amount claimed by the creditor of the company, the company court should not exercise its discretionary power provided under Section 433 of the Act.

Vibhu Bakhru, J.

1. The present petitions have been filed by the petitioner companies under sections 433(e) and 434 of the Companies Act, 1956 (hereinafter referred to as the ‘Act’), inter alia, praying for winding up of the respondent company on the ground that the respondent company has failed and neglected to pay a sum of Rs.1,03,18,917/- along with late payment charges (in Co. Pet. No.373/2012) and a sum of Rs.1,18,11,927/- along with late payment charges (in Co. Pet. No.375/2012), which are contended to be due and payable by the respondent company on account of supply of various iron and steel products by the petitioner companies. Although, the respondent disputes the liability as claimed by the petitioners, it is admitted that the respondent owes an aggregate sum of Rs.1,56,00,000/- to both the petitioner companies. Notwithstanding the respondent’s contention that it owed only a sum of Rs.1,56,00,000/- to the petitioners, the respondent offered to pay the petitioners an aggregate sum of Rs.1,79,00,000/-. The respondent has offered to pay the said amount because the respondent had already issued cheques for the said amount in favour of the petitioner companies, which had been dishonored. And, proceedings under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘NI Act’) had been instituted by the petitioners with respect to the dishonored instruments.

2. The controversy that needs to be addressed in the present petitions is whether the defense raised by the respondent company is bonafide or a sham defence. And, whether the petition is maintainable in view of the offer made by the respondent to pay an amount of Rs.1,79,00,000/- to the petitioner. Co. Pet No.373/2012

3. Brief relevant facts with respect to Co. Pet No. 373/2012 are as follows:-

3.1 The petitioner company supplied various iron and steel products to the respondent company as per the agreed specifications. The petitioner had raised various bills for the materials supplied and the petitioner has provided the details of the invoices which have remained unpaid. It is stated that the respondent company has failed to make the payment of the bills amounting to Rs.1,03,18,917/- despite receiving the delivery of products. The petitioner has further stated that the respondent is liable to pay interest at the rate of 4% per month on the delayed payment. It is submitted that the said rate of interest has been agreed and specifically mentioned in the invoices raised by the petitioner. It is stated that the late payment charges are not claimed as penalty but as pre-determined assessment of loss suffered by the supplier petitioner on account of any delay in the payment. Therefore, the petitioner has claimed and is entitled for an amount of Rs.1,66,19,726/- as late payment charges till 31.1.2012.

3.2 It is stated that the respondent issued various cheques for an amount aggregating to Rs.97,56,145/-in discharge of its liabilities, however, the said cheques were dishonoured. The petitioner, by separate notices dated 27.02.2012 under section 138 of the NI Act, demanded amounts of Rs.20,08,692/-, Rs.27,47,607/-, Rs.28,45,540/- and Rs.21,54,306/-on account of the dishonour of the cheques for the respective amounts. The respondent replied to the said notices, by its separate replies dated 20.03.2012 and raised the issue of inferior quality of goods being supplied by the petitioner and non-adjustment of debit notes for an amount aggregating to Rs.20,20,431/- (Rs.5,31,259/-dated 09.09.2011, Rs.8,31,814/- dated 04.02.2012 and Rs.6,57,358/-dated 18.12.2011). It is submitted by the petitioner that, as the respondent failed to pay the said amounts within the time specified in the notices, the petitioner initiated proceedings under section 138 of the NI Act and filed Criminal Complaints being Complaint No.190/1 (with respect to the notice for Rs.20,08,692/-), Complaint No.194/1 (with respect to the notice for Rs.27,47,607/-), Complaint No.195/1 (wit