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2013 (8) TMI 541 - KARNATAKA HIGH COURTPetition for Winding up Demurrage Charges - Petitioner contended that the company was indebted to the petitioner-company in a sum towards demurrage charges - Held that:- The grounds of dispute raised by the respondent was a bona fide dispute and it was not either illusory or misconceived -there were no good ground to admit the petition There was no privity of contract between petitioner and respondent Merely because respondent-company entered into back to back contracts for Merchandising Trade for facilitating purchase or sale of metal scrap by establishing a Letter of Credit in favour of sellers of metal scrap and pursuant to the same respondent had paid the amounts to its sellers by entering into such tripartite agreement itself would be a pointer to the fact that there was no privity of contract between petitioner and respondent. While examining the prayer for winding up of a company, a duty was cast on the company court to examine as to whether the defence put up by the respondent resisting such claim was a bona fide dispute or a spurious defence the dispute should be of substantial and genuine and not an ingenious method invented by it to deprive the creditor of its just an honest entitlement - Winding up petition was not a legitimate means to seek enforcement of a debt which was genuinely and bona fide disputed by the respondent Costs were ordered to be paid to the Defendant Decided against petitioner.
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