2013 (7) TMI 1237 - HC - Companies Law

Summary

Issues Involved:

1. Admission and payment of liability by the respondent.
2. Alleged inability of the respondent to discharge its debt.
3. Dispute regarding the quality of goods supplied.
4. Maintainability of the winding-up petition under Sections 433 and 434 of the Companies Act, 1956.
5. Availability of alternative civil remedies.

Detailed Analysis:

1. Admission and Payment of Liability by the Respondent:

The respondent admitted a liability of Rs. 2,61,882 and subsequently paid this amount in compliance with the court's order dated 9.7.2013. The petitioner's advocate was absent during the hearing, and thus, no objection was raised against the respondent's declaration of payment. The court acknowledged this payment as the discharge of the admitted liability.

2. Alleged Inability of the Respondent to Discharge Its Debt:

The petitioner claimed that the respondent was unable to discharge its debt, as evidenced by the failure to pay Rs. 4,31,122 despite repeated requests and a statutory notice dated 12.9.2012. The court noted that the respondent had delayed payment even after the statutory notice, which initially suggested an inability to pay debts.

3. Dispute Regarding the Quality of Goods Supplied:

The respondent contended that there was a dispute regarding the quality of the goods supplied, which included damaged inverters and agreed discounts. This dispute was raised after the statutory notice, and the court observed that no contemporaneous evidence was provided by the respondent to support this claim immediately after the receipt of goods. The court considered this dispute as potentially an afterthought.

4. Maintainability of the Winding-Up Petition Under Sections 433 and 434 of the Companies Act, 1956:

The court emphasized that the remedy of winding up is discretionary and requires the petitioner to establish that the respondent is willfully not paying its debts and has lost its substratum. Section 433(e) and Section 434(1)(a) of the Companies Act, 1956, were particularly relevant, as they deal with a company's inability to pay its debts. The court found that the respondent had eventually paid the admitted liability and was a going concern with approximately 100 employees, which influenced the court's decision not to entertain the winding-up petition.

5. Availability of Alternative Civil Remedies:

Given the circumstances, the court concluded that the commercial dispute between the parties could be better examined by a trial court through regular civil proceedings. The court advised the petitioner to pursue appropriate proceedings in a competent court where the dispute and claim could be adjudicated based on evidence.

The court clarified that its observations were only prima facie and would not affect the merits of any subsequent proceedings. Both parties were allowed to raise all legal contentions regarding the disputed liability, but the respondent could not dispute the amount already paid under the order dated 9.7.2013. The petition was disposed of, and the notice discharged.