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2015 (3) TMI 584 - HC - Companies LawWinding up petition - Non payment of legally recoverable dues by the company - Recovery matter disputed before civil court - Held that:- The winding up petition should be allowed when the debt is crystallized clear and undisputable and not when the dispute is bona fide and requires to be adjudicated before the Civil Court. The defence of the Company should be in good faith and one of substance and every possibility to sustain in law.The Apex Court in case of Pradeshiya Industrial [[1994 (2) TMI 267 - SUPREME COURT OF INDIA]] interpreted the expression “unable to pay its debts” in commercial sense to mean that the existing liabilities of the Companies is more than its assets. It is undisputed that the transaction between the parties continued for several years. The agreement provides the deposit of money in the bank account after deduction of the commission, taxes and other expenses. It is not an allegation of the petitioning creditor that the Company has violated any of the terms and conditions embedded in the agreements. The termination came because of the change in the policy and it cannot be said at this stage that the remedy of the Company is not available in seeking the damages for illegal and wrongful termination. The Company has approached the Bombay High Court by filing the civil suit for recovery of money on account of damages though there has been some admission on the part of the Company for such an amount payable to the petitioner but the same has been adjusted against the claim made in the said suit. The adjustment of an amount when the claim made is much more, is not impermissible under the law. It does not invite the Company Court to pass an order for winding up of the Company as the liability is admitted. The same views were confirmed in case of Smt. Vijayalakshmi [1999 (3) TMI 477 - HIGH COURT OF ANDHRA PRADESH]. Therefore, the plea of adjustment is not unrecognized in law provided the amount for which it is adjusted is legally sustainable and/or recoverable. It is essentially a question of evidence and the winding up petition should not be allowed as the liabilities are admitted. Furthermore, the petitioning-creditor have made a counter-claim including the amount admittedly adjusted against the claim made in the suit which cannot be said to be unreal, undisputable and moonshine. The Company has raised a bona fide defence and the parties have already approached the Bombay High Court making claim and counter-claim and, therefore, this Court does not find that it is such an open and shut case where the Company appears to be commercially insolvent and there is no reasonable cause or excuse to pay its debts. The Company petition shall remain permanently stayed. - Winding up petition dismissed.
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