TMI Blog2001 (7) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... eglected to pay to the petitioner the storage charges for three periods, viz., September, 1995 to November, 1996, for an amount of Rs. 7,20,252; from June, 1998 to July, 1998, for an amount of Rs. 1,83,020; and August, 1998, for an amount of Rs. 84,002. From the statement of outstandings the petitioners have claimed the total debt from the respondent-company to the tune of Rs. 20,57,600 inclusive of interest calculated by the petitioners to the tune of Rs.10,70,396.66 on the principal amount of Rs. 9,87,274. According to the petitioners, the respondents have no bona fide dispute and genuine reason not to pay the aforesaid amount and that they have admitted the debt to the tune of Rs. 6,86,802 for the first period and there is no dispute over the claim for the second period and they have absolutely no defence for the third period. There was no reply to the statutory notice calling upon the respondents to pay off the debt of the petitioner-company and warning them of the winding up petition on their failure to do so. The respondent-company has filed an affidavit in reply of its company secretary. The respondents have disputed the entire claim as debt payable by the company to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the full capacity of the tank though, the petitioners have billed them on the basis of the full calibrated capacity. The modes of billing were changing from time of time and that there was no agreement to pay on full calibrated capacity, says learned counsel for the respondents. According to him, the very fact that the respondents have not made payment on the basis of the full capacity or on the basis of the bills and the fact that the petitioners had accepted the said payment would indicate at least the fact of dispute between the parties. According to Shri Saraf, there was mutual understanding and that point of dispute will require evidence. Shri Saraf further pointed out that for the period of 1997-98, the respondents have always made payment on the basis of the full capacity as agreed. Shri Saraf has vehemently attacked the petitioners for attempting to browbeat the company by lodging a very huge and inflated claim to the tune of Rs. 20 lakhs odd. The petitioners are claiming the amount of interest to the tune of Rs.10,70,323.66 though in fact there was no agreement to pay interest at all. The principal amount which is computed in the statement is Rs. 9,87,274. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ordered to be wound up and admission of the petition would be injurious to the functioning of respondents as after admission it will be advertised which would cause great harm and damage to the working and credibility of the respondent-company. Shri Setalvad for the petitioner-company has pointed out from the rejoinder dated July 12, 2000, the basis of the claim and has also laid stress on the fact that there has been practically no defence of any nature for the three periods. As far as the point of limitation is concerned, he has submitted that the respondent-company has in fact accepted and acknowledged the debt in their letter dated March 14, 2000, and, therefore, the claim for the first period of September, 1995 to November, 1996, was not barred by limitation. Learned counsel has submitted that assuming that the respondents have some disputes for the first period as well as the third period, it has no dispute for the second period and the debt exceeds Rs. 500 and in that case he is entitled to get the petition admitted. He has relied upon the following judgments : ( i ) Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp.Cas. 125 (SC); ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recover its debts which is not actually due and payable and which has been bona fide disputed by the respondent-company. The second defence is also a bona fide and genuine defence in respect of limitation of the claim for the period from September, 1995 to November, 1996. Prima facie this claim is also barred by limitation as the petition is presented on August 31, 2000. The question whether the letter dated March 14, 2000, amounts to an acknowledgement of the debt or not will have to be adjudicated and decided in regular civil suit. Prima facie, however, this claim is not enforceable as it appears to be barred by limitation. As far as the third period is concerned, the respondents have blamed the petitioners for delaying the shifting of the material from one tank to the other which was an agreed fact and for which the respondents could not be held liable. This dispute also would require evidence and there is no admission of the claim. I agree with Shri Saraf that the claim put forward by the petitioner-company and the claim made for winding up cannot be bifurcated or separated and the entire claim will have to be treated as a basis for winding up. In this case, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the court may decide it on the petition and make the order . ( Vide Buckley on the Companies Acts, 13th edition, page 451). We are satisfied that the debt in respect of which notice was given under section 434 was bona fide disputed by the appellant-company. The appellant-company had received legal advise and it had acted on it. On the facts it seems to us clear that the appellant-company did not dispute the debt in order to hide its inability to pay debts. Further we are satisfied that the question whether the declaration of dividend dated December 30, 1959, is valid or not raises a substantial question as to the interpretation of section 207 of the Companies Act. Further, whether the declaration dated December 30, 1959, is severable or not is also a substantial question. We do not propose to decide whether the declaration of dividend was vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of the above,we are unable to uphold the judgments of the court below on the facts narrated above. Our reasons are as under: (1) The basis of the claim of the first respondent for Rs. 72.50 lakhs is the promoters agreement dated July 1, 1988. This agreement has been cancelled by the appellant by notice dated October 31, 1992. Though the learned Single Judge of the High Court referred to this aspect he had not pursued it further. He has not considered as to what would be the consequence. Unfortunately, the Division Bench has overlooked this aspect when it held thus : In the present case, there is an allegation in the petition that there was an agreement between the company and Dalmia Dairy Industries for promoting the petitioner company and that under the terms of that agreement the company had to pay certain amounts. There is nothing on record to suggest that such an agreement was not entered into . (2) The first respondent is not a creditor. The appellant is not a debtor because it is a financial institution for an amount which is agreed to be subscribed. Neither the learned Single Judge nor the Division Bench has decided this important question whether there is a debt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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