TMI Blog2007 (5) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... subtracted from the petitioner s claim and the remainder be found to be the admitted debt. The company raises the question of commission only to show that it had some form of counter-claim and urges that the citing of a counter-claim is enough to unsettle apparently settled accounts and resist a petition for winding up. Claims in rupees are resisted by counter claims in paisa and it is urged that till the exact excess of the rupees over the paisa is established, the petition cannot proceed to the next stage. 3. An old English judgment is referred to by the company to suggest that the purpose of the relevant provisions now found in sections 433, 434 and 439 of the Companies Act is to wind up insolvent companies and to make them pay their debts so far as their assets would extend. Such provisions cannot be stretched, the company asserts, to take accounts between two solvent parties as in a regular civil suit. 4. The company relies on the principle established by Sir John Romilly, M. R., in Brighton Club Norfolk Hotel Co. Ltd., In re 55 ER 873 which is summarised in the following lucid words : "Suppose the company said, We are now willing to pay the debt , then this que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, at the initial stage, a prima facie view of quantum of indebtedness is taken and the progress of the petition to the second stage may be halted by the company taking up the option that is generally offered it of either securing the debt or paying it off so that the petition does not partake a representative character at the second stage. The company may as well feel hard done by the prima facie finding of the quantum of indebtedness at the preliminary stage and fight such finding at the subsequent stage where other creditors may jump in and such other creditors claims have also to be resisted or succumbed to. 7. The statutory notice of 18-12-2004 for a principal claim of Rs. 2,32,90,136.63 was met with a robust but pithy denial in the response of 17-1-2005. Advocate for the company referred to discussions between the parties and letters issued by the company on 5-3-2002, 18-3-2002 and 19-8-2002 and, "other letters". It was asserted that "it will be crystal clear that my client has also some dues from you which are due and outstanding". The statement of accounts on which the petitioner s claim was founded, was disputed and it was suggested that the major portion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the company from which it is evident that the company acknowledged to be a nett debtor for a sum in excess of Rs. 60 lakhs. The company had offered to supply 15 vehicles to the petitioner of total value of Rs. 60 lakhs and proposed that if the petitioner forwarded the formal order therefor, supply would be effected by the company by adjusting Rs. 60 lakhs being the price of the vehicles against the sum due from the company to the petitioner. It does not appear that such transaction ultimately materialised but the petitioner relies on such letter to establish, lakh by laboured lakh, the indisputable amount due to it. 11. The petitioner next relies on its demands made in its letters of August 10 and August 12, 2002. In the first of the letters, the petitioner expressed anguish at the matter of payment not being taken forward by the company. In the second letter, the petitioner referred to the company s proposal to clear dues of Rs. 2.84 crores and asserted that reconciliation of accounts had long been completed. Such second letter of 12-8-2002 needs to be noticed : "We refer to the meeting we had at Chennai on 23-2-2002 when a proposal to clear the overdues of Rs. 2.84 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m us against different small balances which were actually not payable and certain adjustments were pending at your end. We have now every apprehension that similar small balances and credit notes for ORC and different incentive amounts from 1995 have not been properly disclosed to us. We never received the accounts statement having proper details of supply made, payment received, ORC allowed, incentives credited to us since 1995." 13. The petitioner also refers to two further letters of the company. One of 12-12-2002 and another of 3-5-2003 to suggest that the company always accepted that it was a nett debtor to the petitioner and had cited its financial stringency to keep the petitioner at bay. In the second letter the company referred to the cash constraints that it faced and promised that it was "trying to arrange some part payment against our dues to the tune of around 20-25 lakhs to you within a period of 6-8 months." The following two paragraphs from the earlier letter have been particularly emphasised by the petitioner : "As a matter of fact, we are very much interested to clear the liabilities on us for which we would like to get the required fund financed by Asho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into and it calls for accounts being taken for a figure to be firmed up thereupon. 17. The principles laid down by the high authorities cited by the petitioner are not in dispute. A solvent company would not be sent into liquidation upon it not being told of the quantum of its debt so that it may exercise an option of payment. A bona fide dispute, whether on facts or in law. requiring any enquiry at which the view put forth by the company could finally be taken, is enough to stop the creditor s claim proceeding in a winding up action. If there is any doubt, the nature of the proceedings demands that the company be the beneficiary of such doubt. Such are, broadly, the principles that companies rely on in proceedings of this kind. There are principles also that creditors invoke and which apply with equal force. A mere assertion of a dispute or the denial of a claim is not enough, the prima facie bona fides thereof need to be demonstrated. Creditors winding up petitions have also been recognised to be an equitable mode of execution. The Company Court will not merely stay its hands upon a cloak of dispute being thrown over a claim by the company, it will peep within to ascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim vague. However strong an impression the Company Court may carry, summary proceedings do not permit a detailed investigation. But whatever benefit the company can obtain from the cloud of doubt, that it had raised, it would not be uncharitable to require it to secure, in cash with the Registrar, Original side, a sum of Rs. 1.5 crore in addition to the payment of Rs. 60 lakhs to avoid the petitioner from inviting other creditors of the company to join in and prey upon it. 22. The petition is admitted for the sum of Rs. 2.10 crores (Rs. 60 lakhs plus Rs. 1.5 crore) on account of principal together with interest at the rate of 8 per cent per annum on the principal sum of Rs. 60 lakhs from 18-3-2002 as by a letter of such date the petitioner unconditionally offered to supply vehicles of value of Rs. 60 lakhs and sought to adjust it against the sum due in its books to the petitioner. 23. If the company pays a sum of Rs. 60 lakhs, together with interest as aforesaid, to the petitioner within six weeks from date and furnishes cash security of Rs. 1.5 crore to the Registrar, Original side of this Court for the same being deposited in the highest interest-bearing deposit withi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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