TMI Blog2002 (11) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be borne in mind that section 69 of Indian Partnership Act only contains a prohibition for an unregistered firm filing a suit to enforce a right arising from a contract or conferred by the said Act. The firm has to be registered and the person suing has to be a registered partner. The suit to attract section 69 has to be the one to enforce a right arising from a contract or conferred by the Act. Mr. Khanna has not been able to cite any judgment holding that section 69 would be applicable to winding-up proceedings under the Companies Act. In the winding-up petition, primarily, the court is required to adjudicate whether the respondent is commercially solvent or insolvent and is not to enforce any right arising from a contract. The pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Bombay in Padma Alloy Castings (P.) Ltd. and Dabholkar Enterprises v. Padma Alloy Castings (P.) Ltd. [1995] 2 Comp. LJ 131 in which the following contrary view has been taken : ". . . Remedy to recover the dues from third party by way of a suit is barred in view of section 69 of the Partnership Act and therefore, when the remedy of the petitioners is barred for recovery of the said amount due from the respondent-company, there does not exist the debt which is recoverable by the petitioners, and therefore, the presumption which would arise as a result of the notice under section 434 of the Companies Act would stand rebutted. . . ." (p. 133) 3. Justice I.J. Shah had discussed and distinguished Kottamasu Sreeman- narayana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act are not circumscribed or tempered by the preceding words "a claim of set off", the view of this Court in Kalra Iron Store s case ( supra ) falls in the penumbra, because of the subsequent decision of the High Court of Bombay. 6. Apart from the undebatable principle that winding-up proceedings are not surrogate for the ordinary civil proceedings, it is also a well entrenched tenet of Company Law jurisprudence that if a bona fide defence has been disclosed, the Court ought not to proceed under sections 434 and 439 of the Companies Act. In this regard, the first question which must be answered is the importance to be attributed to the neglect or failure to respond to the statutory notice. This question has already received the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t s failure to send a Reply to the Statutory Notice. The reliance of Mr. Valmiki Mehta, Learned Senior Advocate appearing for the Petitioner on the above-mentioned decisions of my Learned Sister Usha Mehra, J. is somewhat exaggerated. The decisions do not inexorably lead to the conclusion that winding-up orders must unvariably be passed where no response to a Statutory Notice has been made. From my understanding of the judgment my Learned Sister had taken the failure to reply to the notice as an important factor in determining whether a bona fide defence had been put forward. In the circumstances of both the cases, she preferred to view the defence as an afterthought and as being bereft bona fide . In CP 220/2001 entitled H.B. Stock Hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nificance of the failure of the Respondent-Company to respond to the statutory notice, this factor will be duly kept in perspective when the conspectus of facts is considered." 7. The facts, succinctly stated, are that the Petitioner is engaged in the business or releasing advertisements, inter alia , animated and commercial, in various motion pictures, on behalf of principals such as the respondent-company. The mechanics of the arrangement is that the Petitioner receives commission of 15 per cent against the Invoice value of the insertions. In this transaction, the Petitioner may have already paid 85 per cent of the Invoice value to the owners of the motion picture, towards the costs of the insertion. It has been averred in the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t date itself. Learned counsel for the Petitioner has emphasised the fact that payments have also been made towards the commercial insertions. I find the explanation given thereto to be satisfactory viz. that these payments were released but there was a clear caution that in future, unless there was a specific authorisation, payments would not be made. Particularly telling is an admission available in the letter dated 26th July, 1994 wherein it has been stated that "thereafter as your verbal instructions my client carried out the advertisement of your product from time to time in the films released on video". It would be extremely dangerous for a Company Judge to issue winding-up orders in circumstances where a verbal contract is pleaded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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