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2015 (11) TMI 132 - HC - Companies LawWinding up of the respondent company seeked - Whether in the given facts and circumstances the respondent-Company is required to be wound up having failed and ignored to make payments of the outstanding amount being unable to pay its debts? - Held that:- In the matter of Vijay Industries Vs. NATL Technologies Limited [2008 (12) TMI 404 - SUPREME COURT OF INDIA] reiterated the prerequisites for winding up on the ground of inability to pay debt by holding that for invoking Sec.433(e) what is necessary that despite service of notice by the creditor, the company which is indebted in a sum exceeding one lakh rupees then due, failed or neglected to pay the same within three weeks thereafter or to secure or compound for it to the reasonable satisfaction of the creditor. It has further been held that Section 433(e) does not state that the debt must be precisely a definite sum and it is not a requirement of law that the entire debt must be definite and certain. No doubt, numbers of e-mails and other correspondences have been exchanged between the parties, which would indicate that the petitioner had indeed raised a dispute with the respondent, but then the question arises as to whether the defense raised by the respondent is a bonafide one or not. After all, to raise a presumption of a company’s inability to pay its debts it is not enough merely to show that the company had omitted to pay the debt despite service of statutory notice, it must be further shown that the company had omitted or neglected to pay without reasonable excuse and conditions of insolvency in the commercial sense exist. The petitioner has neither made any averment nor has placed any document on record to demonstrate that the respondent is commercially insolvent. On the other hand, from the documents on record, it is evident that the respondent is a profit making solvent company and is in a position to meet its debt as and when it arises. The respondent-Company has clearly set out in their reply the reasons why the amount as claimed by the petitioner has not been paid to them and the contents thereof have already been reproduced (infra). The debt, therefore, is disputed and it cannot also be said that the respondent-Company has no genuine or substantial ground for refusal to pay or is unable to pay the same. The Company refusal to pay debt is as a result of bonafide dispute. The dispute is substantial and genuine and cannot be termed to be spurious, speculative, illusory or misconceived. In view of the preceding analysis, it is evident that the amount due in the instant case has not crystallized and there is a bonafide dispute with regard to liability of the respondent to pay the amount in question to the petitioner. The petitioner has also failed to prove that the respondent is insolvent in the commercial sense. It is well settled that proceeding for winding up, is not a proceeding for the recovery of outstanding dues. Nor for that matter, can the remedy of a petition for winding up be utilized to pressure a company which is commercially solvent to pay a debt which is bonafide disputed. For the reasons aforesaid, no case for winding up of the respondent is made out. In the result, the company petition fails and is hereby dismissed, so also the pending application(s) if any.
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