TMI Blog1995 (12) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act. The object of the company is to do business in wire drawing and as manufacturers or dealers in, and exporters and importers in steel wires, copper, etc. The petitioner also renders professional and technical consultancy and advice to individuals, firms, companies, etc., and carrying on any other business in the field of designing engineering relating to wire and cable industries. The other objects have been set forth in the memorandum of association. The petitioner by letter dated January 16, 1990, offered to supply 5.5 mm. M.S. wire rod coils to the respondent. The price fixed was Rs. 96,000 per metric tonne exclusive of sales tax. The payment shall be made immediately after the delivery of the material and for delayed payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f correspondence between the petitioner and the respondent with regard to the payment of the outstanding amount and the discount. Finally, a legal notice was issued to the respondent on April 22, 1991, asking the petitioner to pay the amount with interest at 20% per annum. A reply was sent on May 28, 1991, thereupon a notice under section 434 was issued to the respondent on November 23, 1992, and the same was acknowledged. Even though the statutory period had expired, the respondent failed and neglected to pay the debt. Under these circumstances, the petitioner approaches this court for the winding up of the company. A counter-affidavit was filed on behalf of the respondent denying the averments made in the petition. The principal content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner-company is entitled to proceed against the respondent-company in respect of the material supplied to V.C.R. and Sons, which is a sister concern ? ( iii )Whether the petitioner is entitled for the winding up of the respondent-company under sections 433(3), 434(l)( a ) and 439( b ) of the Companies Act? PW-1 is Mr. K.S. Prasad, examined on behalf of the petitioner. He was the officer of marketing. Exhibit A-1 is the copy of the offer. The offer was accepted by the respondent by letter dated January 25, 1990, which is exhibit A-2. Under the agreement a total 500 mt. of M.S. rod coils are required to be supplied within three months, i.e. , January, February and March, 1990. The petitioner supplied only 118 tonnes by February 14, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the xerox copy of the notice dated May 9, 1990, marked subject to proof and relevancy. The respondent did not issue any notice in respect of V.C.R. and Sons and the petitioner-company. The respondent-company is not responsible for the amount due by V.C.R. and Sons. It is also denied the respondent raised the defence for the first time in the counter. It is not in dispute that, vide letter dated January 25, 1990, exhibit A-2 communication was sent to the petitioner to the effect that 500 tonnes shall be supplied to the respondent within a period of three months at an agreed price of Rs. 9,300 per mt. It is also agreed to realise the discount at Rs. 150 per mt. The petitioner supplied the material to the respondent and also the other siste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to V.C.R. and Sons, calling upon it to pay the amounts, failing which the necessary proceedings should be taken against them. In the absence of any positive evidence establishing the liability of the respondent-company in respect of the supplies made to V.C.R. and Sons, it would not be possible to hold that the respondent-company failed and neglected to pay the amount. It is also borne out by the record that V.C.R. and Sons had paid part of the amounts towards the supply of the material by the petitioner-company and in respect of the balance, it had issued a cheque which bounced. The petitioner having accepted the amount and also the cheque from V.C.R. and Sons cannot turn round and say that the respondent-company alone is liable to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , what is required to be established under sections 433 and 434 is that the company is unable to pay its debts, the material supplied to V.C.R. and Sons cannot be construed as a debt incurred by the respondent-company. When once the debt is not established, the provisions of sections 433(3) and 434 are not attracted. Under these circumstances, I find the petitioner-company failed to establish the debt by the respondent-company. Therefore, the petition under section 433(3) of the Companies Act is not maintainable. Accordingly, the company petition is dismissed. There shall be no order as to costs. However, this order shall not preclude the petitioner-company from proceeding against V.C.R. and Sons for realising the amount, which is due t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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