TMI Blog1982 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor nominated by the Karnataka State Industrial Investment and Development Corporation Ltd. and respondent No. 4 is stated to be a director nominated by the Karnataka State Financial Corporation and respondent Nos. 5 and 6 are elected directors of the respondent company. It is alleged that the authorised capital of the company is Rs. 1,00,00,000 (one crore) divided into 7,50,000 equity shares of Rs. 10 each and 25,000 9.5 per cent, redeemable cumulative preference shares of Rs. 100 each. The issued, subscribed and paid-up capital of the company is Rs. 65,00,000 divided into 5,00,000 equity shares of Rs. 10 each fully paid-up and 15,000 9.5 per cent cumulative redeemable preference shares of Rs. 100 each, fully paid-up. It is stated by the petitioner that the respondent company was established for manufacture and sale of steel and wire products as well as allied products as set forth in the memorandum of association of the company. It is alleged that the company is indebted to the petitioner in the sum of Rs. 25,87,532.38 as on June 30, 1978, as per the particulars of the amount claimed by the petitioner furnished at annexure-A to the petition. The petitioner has further claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of s, 434 of the Act. There was another letter issued on March 10, 1977, calling upon the respondent company to confirm the amount mentioned in the letter. In reply thereto, the respondent company pointed out that there were certain errors in the statement of account furnished by the company and that the matter was being looked into. Along with the letter, a statement was forwarded admitting that a sum of Rs. 18,89,861.61 was due and payable by the company to the petitioner. The difference between the claim made by the petitioner company and the respondent company appears to be in the sum of Rs. 30 and no more at that pointjof time. A series of letters appear to have been exchanged between the parties and the respondent company by its letter dated June 10, 1978, admitted its liability but pleaded for time to make payment. That letter of June 10, 1978, issued by the respondent company is produced at annexure-F to the petition. The petitioner had further alleged that in spite of the demand made on several occasions, the company has failed to pay the cost of the wire rods supplied and delivered to the respondent company together with interest due, in the sum of Rs. 25,87, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first respondent company had been quite serious in settling its legitimate outstandings and disputed only the untenable claims made by the petitioner. It is also alleged that the last balance-sheet filed for the year ending 1975-76 of the company in itself did not indicate that the company is not commercially solvent. But for these very bald denials, there is nothing in the statement of objections which requires to be noticed other than the assertions made by the respondent that on account of hostile labour problems, the company had stopped its production in or about June, 1975, and since then it had been making its best efforts to recommence its production at its factory and make arrangements to settle with all the creditors. It is also asserted that at a meeting of all creditors called and held at the State Bank of Mysore and at which meeting a representative of the petitioner company was present, the resolution adopted at that meeting provided settlement by installments to all creditors and, therefore, the claim of the petitioner for a winding up order could not be made by this court. Strangely, the respondent company has not denied its correspondence with the petitioner to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hecated to that bank and the same was technically in its custody in the factory premises of the respondent company. It is also disclosed that it has filed a suit in the court of the then Civil Judge, Bangalore District, Bangalore, to recover all the sums due to it about Rs. 2 crores and 69 lakhs. Similarly, the Karnataka State Financial Corporation, Bangalore, also filed a statement saying that it was also a secured creditor and a sum of Rs. 23,82,000 was advanced to the respondent company for erection of its factory and that a sum of Rs. 37,62,427*28 as on April 14, 1980, was due to that Corporation. Similarly, a former employee, one B. R. Kamte of Kongeri Town near Bangalore City also filed an affidavit supporting the winding-up proceedings claiming that the respondent company was due to pay the arrears of salary to him under an award made by the Industrial Tribunal by which the said Kamte was directed to be reinstated in the company's employment giving continuity of service and all back wages. Similar applications and affidavits have been filed by the former employees seeking to support the winding-up petition for one or the other reasons stated by them therein. All of them have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties were heard on merits. Mr. T. Subba Rao, learned counsel appearing for the respondent company and its directors who entered appearance, in substance contended that there was a bona fide dispute as to the claim of the petitioner company and that the company though not in production, being a viable unit, should not be wound up. He has relied upon numerous decisions of the Indian courts and English courts to support the above propositions. I do not think any useful purpose will be served in referring to those decisions in the light of the facts I have already narrated and in the light of the reasons I intend giving. It is well settled now that the respondent company the winding up of which is sought by the petitioner should have a genuine and bona fide dispute and a tenable defence in regard to the claim of the creditor-petitioner and in that event the court after satisfying itself as to the genuiness of the dispute and the bona fide nature of the defence would direct the parties to a civil court for adjudication of such bona fide dispute with tenable defence which is prima facie established. Otherwise, there is no bar for the company court to proceed to wind up the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 30,000 per month commencing from November, 1980, and such instalments shall be paid on or before 10th of the each month following the month for which it is due. But the petitioner was not agreeable for such a settlement. In the face of the memo filed, it will not be open now to the respondent company to plead that it has a tenable defence. That tenable defence only relates to payment of interest and other inaccuracies in the accounts maintained by each of them. But it cannot be of any assistance to deny its liability to the extent of Rs. 11,85,891-03. In this circumstance, it is unnecessary for this court to embark upon further investigation but hold that admittedly the respondent company is due in the afore-mentioned sum to the petitioner company and it is unable to pay in spite of demand. Therefore, I am unable to see how this court having regard to the facts set out earlier as to the extent of its liability to financial institutions mentioned in the course of this order avoid passing an order winding up the company in public interest. Several adjournments were taken on the ground that the Government of Karnataka was interested in rehabilitating the company and declarin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
