Back
2014 Supreme(Mad) 2129
High Court of Judicature at Madras
M. JAICHANDREN & M. VENUGOPAL, JJ.
ETA Engineering Private Limited, Chennai
Versus
Texmaco Rail & Engineering Limited, Kolkata
O.S.A. No. 134 of 2014 & M.P. No. 1 of 2014
Decided on: 25-07-2014
For the Appellant:P.S. Raman, Senior Counsel, P. Ranganatha Reddy & Jose John, Advocates, King & Partridge.
For the Respondent:Arvind P. Datar, Senior Counsel, Arun Karthick Mohan, Advocate.
The machinery for winding up will not be allowed to be utilised merely as a means for realising debts due from a company. If the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company.
Headnote:
COMPANY - WINDING UP - PETITION - ADMISSION - DEBT - DISPUTE - BONA FIDE - INTERPRETATION OF NOVATION AND TRANSFER AGREEMENT - JURISDICTION - COMPANY COURT - CIVIL COURT - COMPANY PETITION DISMISSED.
Fact of the Case:
Appellant/Respondent preferred Original Side Appeal against the order dated 25.04.2014, in Company Petition No.52 of 2014, passed by the Learned Single Judge, admitting the Company Petition filed by the Respondent/Petitioner, on the ground that the amounts claimed by the Respondent/Petitioner are due from Vikram Logistic and Maritime Services Private Limited and that the said debtors company is registered at Bangalore and that the Respondent/ Petitioner filed a winding up petition, in C.P.No.10 of 2014, on the file of the Hon'ble High Court of Karnataka against Vikram Logistics for the dues claimed in present Company Petition No.52 of 2014 filed by the Respondent/ Petitioner on the file of this Court.
Finding of the Court:
The Court held that the Appellant/Respondent has raised a substantial and tangible defences by raising contentious factual and legal issues which required detail investigation. Also that, the defences raised by the Appellant/ Respondent are not a mere cover or empty disputes with a view to cover up its real inability. In short, this Court is subjectively satisfied that the defences raised by the Appellant/Respondent in the present case are bona fide and genuine one. As a matter of fact, these contested mixed questions of Facts and Law are to be adjudicated only by a Civil Court. As such, the proper remedy for the Respondent/ Petitioner is to approach the competent Civil Court for resolving the mixed questions of Facts and Law in regard to the bona fide dispute of Debt and its liability.
Issues: 1. Whether the debt claimed by the Respondent/Petitioner is bona fide disputed? 2. Whether the Appellant/Respondent has raised a substantial and genuine defence to the winding up petition? 3. Whether the Company Court has jurisdiction to adjudicate upon the bona fide dispute between the parties?
Ratio Decidendi: 1. A debt is a sum of money which is now payable or will be payable in future by reason of a present obligation debitum in prasenti solvendum in futuro. A debt must be a determined or definite sum of money payable immediately or at a future date. A contingent debt or a conditional liability is not a debt when the contingency or condition has already happened. 2. If a Court of Law is satisfied that a debt upon which a petition to wind up is founded is a hotly contested debt and also doubtful, then, it should not make up a winding up order based upon such debt. 'Bona fide' dispute implies the existence of a substantial ground for the dispute raised. Where the company has a bona fide/genuine dispute, the Petitioner cannot be regarded as a creditor of the company for the purposes of winding up. 3. The power of winding up is to be exercised judicially and with most circumspection. No wonder, the proceedings under Section 433 and 434 are not the proceedings to recover debts due from any particular company.
Final Decision: The Original Side Appeal is allowed, leaving the parties to bear their own costs. The Company Petition No.52 of 2014 filed by the Respondent/Petitioner is dismissed. The connected Company Applications are closed.
1. The Appellant/Respondent has preferred the instant Original Side Appeal as against the order dated 25.04.2014, in Company Petition No.52 of 2014, passed by the Learned Single Judge.
2. The Learned Single Judge, while passing the order, in Company Petition No.52 of 2014, filed by the Respondent/Petitioner, on 25.04.2014, in paragraph Nos.16 to 18, had observed the following:
“16.The plea of the learned counsel for the respondent is that the case of the petitioner involves interpretation of the NAAC and, therefore, there is a clear case of dispute. The interpretation as urged by the learned counsel for the respondent is as to whether the liability would stand as against VLMS or the respondent. Here is a clear case of goods sold and delivered and debt acknowledged prior to 15.3.13 by the respondent. The question is whether the respondent herein, viz., ETA, or the transferee VLMS is liable. The agreement of transfer slump sale by the respondent to VLMS does not in any way affect the rights of the petitioner, governed by the terms of NAAC. Clause (3) of the NAAC agreement very clearly provides that the parties agree that the respondent – ETA's obligation is not discharged and an indemnity is also provided by the respondent and there is nothing in the agreement, which discharges ETA of its obligations. In such view of the matter, I do not find any justification to non-suit the petitioner on the ground that they have filed a petition before the High Court of Karnataka as against VLMS.
17. In view of the reasons as stated above, all the plea taken by the respondents appears to be a mirage. In view of the clear admission of liability by acknowledgement of debts on various dates as stated above and the NAAC dated 15.3.13, the non-response to the statutory notice, goes to show that the petitioner has made out a prima facie case for admission.
18. Accordingly, this Court, for the aforesaid reasons, is satisfied that a prima facie case has been made out for proceeding against the respondent under Section 433 (e) of the Companies Act.”
And admitted the Company Petition, by ordering issuance of notices on the Court Notice Board, to the Registrar of Companies, Madras etc.
3. Also that, the Learned Single Judge had directed the publication of the Company Petition in one issue of Tamil Daily “Malai Murasu” and in one issue of English Daily “New Indian Express” and in the Tamil Nadu Government Gazette fixing the date of hearing on 16.06.2014 and directed the publication of the Company Petition giving atleast 14 days clear advance notice.
4. Added further, the Learned Single Judge appointed the Official Liquidator as Provisional Liquidator and directed him to take charge of the assets of the Appellant/Respondent Company. That apart, the ex Directors of the Appellant/Respondent Company were directed to file their statement of affairs before the Official Liquidator within a period of 21 days and directed the company to deposit a sum of Rs.10,000/- towards initial expenses before the Official Liquidator.
Appellant/Respondent's Contentions:
5. The Learned Senior Counsel for the Appellant contends that the amounts claimed by the Respondent/Petitioner are due from Vikram Logistic and Maritime Services Private Limited and the said debtors company is registered at Bangalore and that the Respondent/ Petitioner filed a winding up petition, in C.P.No.10 of 2014, on the file of the Hon'ble High Court of Karnataka against Vikram Logistics for the dues claimed in present Company Petition No.52 of 2014 filed by the Respondent/ Petitioner on the file of this Court.
6. The Learned Senior Counsel for the Appellant submits that a purchase order dated 07.06.2008 was placed by the Appellant on the Respondent/Petitioner for supply of 8 Rakes of BLC Wagons/Rail Wagons (45 wagons per rake) by the Respondent to the Appellant and that the supply of 3 rakes were duly effected by the Respondent on 02.01.2010, 25.05.2010 and 24.06.2010 respectively based on the
