Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2021 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (12) TMI 348 - HC - Companies LawSeeking winding up of the respondent - inability to pay the debts under Section 433 (e) and (f) read with Sections 434 and 439 of the Companies Act, 1956 - HELD THAT:- Once a notice is issued under Section 434 of the Companies Act, a deeming fiction is created regarding the inability to pay the debt, therefore it becomes the obligation on the part of the respondent/debtor Company to show that the debt itself is illegal or that there is no debt at all, if it has to escape the consequence of issuance of a winding up notice. On the facts available in the case on hand one could see that the deeming fiction created by Section 434 of the Companies Act, has occurred, therefore, the existence of the debt has been proved. Therefore, it becomes incumbent upon the Court to consider the defences that are projected by the respondent Company as an answer to the claim for winding up. Even ignoring the agreements and the bills of exchange, the certificates of acceptance that had been issued by the respondent would show that there is a categorical admission of liability. Each of the bills of exchange is supported by a certificate of acceptance. The respondent has not denied the execution of the certificates of acceptance - A Division Bench of this Court in MICHAEL HART VERSUS NINESTARS INFORMATION TECHNOLOGIES LTD. REPRESENTED BY ITS MANAGING DIRECTOR, GOPAL KRISHNAN [2013 (4) TMI 875 - MADRAS HIGH COURT], has examined the scope of Section 433 of the Companies Act and held that the Company Court while examining the issuance of notice or admission of a Company Petition need not pronounce upon the validity or enforceability of the debt. Admittedly, the respondent Company had not chosen to terminate the contract. It had continued to avail the services. Therefore, it cannot now turn around and say, there is a violation of the provisions of the Aircraft Act or the C.A.R. Rules made there under and therefore the liability ceased - the respondent Company has miserably failed to satisfy the three pronged test suggested by the Hon’ble Supreme Court in MADHUSUDAN GORDHANDAS AND CO. VERSUS MADHU WOOLLEN INDUSTRIES (P.) LTD. [1971 (10) TMI 49 - SUPREME COURT] and hence had rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956. This Company Petition should be allowed and the respondent Company directed to be wound up.
|