The court emphasized the importance of a bonafide defense and reasonable excuse for non-payment in winding up petitions under the Companies Act 1956.

( 1 ) HEARD Shri Amit Prasad assisted by Shri Manoj Kumar Singh for the petitioner and Shri bharat Ji Agarwal assisted by Shri Piyush Agarwal for the respondent Company.

( 2 ) BY an order dated 15. 2. 2005 a counter affidavit, after overruling the objection by the counsel for the petitioner Company, was taken on record on imposition of costs, on the respondent company and the matter was directed to be listed for hearing on the admission of the petitioner, for consideration whether the Company Petition should be advertised under Rule 24 of the companies (Court) Rules, 1959.

( 3 ) THESE creditors winding up petition has been filed by M/s Melvin Powell Vanaspati and engineering Industries Ltd. , with its registered office at 8/1/b, Diamond Harbour Road, Calcutta and M/s Paharpur Cooling Towers Ltd. with its registered office at 8/1/b, Diamond Harbour road, Calcutta under Section 439 read with Section 433 and 434 of the Companies Act 1956 read with Rule 9 of the Companies (Court) Rules 1956 to wind up M/s Oswal Chemicals and fertilizers Ltd. with its registered office at Village and Post Office, Piprola, Shahjahanpur.

( 4 ) BRIEF facts leading to the filing of the Company Petition No. 5/2004 in the matter of M/s paharpur Cooling Towers Ltd. , stated in paragraph 7 (a) to (h) are stated as below:

" (a) M/s Humphreys and Glasgow Consultants Ltd. having its office at Oberoi Complex, Saki vihar Road, Sakinaka, Mumbai floated an enquiry on behalf of Company being inquiry No. OEFL:bc2517:3hc:r401 dated 18th August 1997 for Paradeep Phosphatic Fertilizers complex.

(b) Pursuant to the floating of the enquiry, the Petitioner made offers bearing No. S217 dated 16th September 1997; S217a dated 22nd December 1997 and DT-97222 dated 26th December 1997 and thereafter had technical and commercial discussions with the Company with regard to the same.

(c) On the basis of the Letter of Intent/notification of Award dated January 7, 1998 being No. OEP/pp/98/05 and the subsequent discussions that the Petitioner had with the Company, the company awarded the petitioner the following order on lump sum basis:i. SAP Cooling Tower Order No. BC2517: 3 HC: R401/1998/9 dated April 8 1999 issued under noa-BC2517:3hc:r401: 1998/9 dated January 6, 1998 ii. PAP Cooling Tower Order No. BC2517: 3hc:r401/1998/9 dated April 8 1999 issued under noa-BC2517:3hc;r401:1998/9 dated January 6, 1998 iii. Order No. OCFL/ BC/2517/3 HC/r401/ 1998 dated February 18, 1999 and amend Order No. OCFL/bc/2517/3hc/r401/1998/12/amnd-I dated March 17, 1999 iv. Order No. OCFL/ BC/2517/ 3hc/r401/ 1998 and OCFL/cyc/1999/579 dated November 15,

(d) The Petitioner thereafter executed the order as per the terms and conditions of the contract as the same was duly signed and executed, thereby making the said contract binding on both the parties.

(e) The work under the contract/order were executed by the Petitioner in accordance with the terms and conditions of the contract and to the complete satisfaction of the Company, which is evident from the Minutes of Meeting held on 13th April 2001 between the company and the petitioner which was duly represented by the concerned executives namely Mr. U. S. Mullick and mr. S. Pal of the Petitioner and Mr. Dubey, Sr. Manager (M) and Mr. B. K. Mishra, Plant manager of the Company.

(f) The Petitioner herein completed and executed the contract, strictly in accordance with the terms and conditions of the contract and the Company as aforesaid duly accepted the same and accordingly, the Petitioner raised invoices on the company with respect to the completion and commissioning of the project, which have not been settled by the Company in totality till date. The total amount, which became due and payable upon completion of the contract for which invoices have been duly raised was the contract amount of Rs. 5,99,64,050/- (Rs. Five Crores ninty Lakhs Sixty Four Thousand and Fifty only), however, the outstanding amount of Rs. 21,02,998/- (Rupees Twenty