TMI Blog2009 (4) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... eed not further prove that the respondent company was unable to pay the debts. As the respondent company had failed to honour the statutory notice by making payment, it must be held that it was unable to pay the debts. Thus the appellant company is entitled to succeed - O.S.A. NO. 172 OF 2008 - - - Dated:- 29-4-2009 - D. MURUGESAN AND C.S. KARNAN, JJ. R. Murari for the Appellant. R. Srinivas for the Respondent. JUDGMENT D. Murugesan, J. - The facts as put forth by the appellant are as follows: Tata Iron and Steel Company Limited, the appellant herein, is a company incorporated under the Companies Act, 1956 (hereinafter referred to as the Act ) having its registered office at Mumbai and regional office at Chennai. A company by name Tata SSL Limited used to supply materials to M/s. Omega Cables Limited (hereinafter referred to as the respondent company ), a company incorporated under the Act and has its registered office at Chennai from the year 2001. The said Tata SSL Limited raised various invoices on the respondent company amounting to a sum of Rs. 33,50,386 apart from an Interest Debit Note dated 18-7-2001 for a sum of Rs. 4,99,015. As against the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 4. Mr. R. Murari, the learned counsel, would submit that the respondent company had accepted the outstanding amount in their letter dated 21-3-2002 and there is no dispute as to the amount. The statutory notice issued on 30-3-2002 in the name of Tata SSL Limited refers to the sum actually due to the appellant company. Further, in the lawyer s notice dated 23-8-2004 issued in the name of Tata SSL Limited, the amount was mentioned. Lastly, the notice dated 6-5-2005 issued in the name of the appellant company also contains the outstanding amount. The respondent company had not disputed the said amount by any reply. It is not necessary to quantify the amount, in the notice. Hence, there is no dispute and the appellant company had proved the actual outstanding amount due to them from the respondent company. In terms of section 434(1)( a ) of the Act, the Company shall be deemed to be unable to pay its debts if the amount claimed in the statutory notice exceeding Rs. 1 lakh is not paid or the Company neglected to pay the said amount within three weeks from the date of receipt of notice. Further, it is contended that the authorised signatory of the respondent company had acknowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory notice on the respondent company before the winding up petition was filed is concerned, the learned Judge had accepted that there was a service of notice on the respondent company before the winding up petition was filed and therefore, there was statutory compliance. The said finding has not been questioned by the respondent company by filing cross objections. Therefore, we are not inclined to go into the said question and on the other hand, proceed to consider the challenge to the order on the ground whether the appellant company had proved that the actual amount due is undisputed and whether the respondent company is unable to pay the debts. 7. In terms of section 433( e ) of the Act, the Court would order winding up of a company, if the company is unable to pay its debts. In the event a claim is doubtful requiring adjudication, it is not a debt as contemplated under section 433( e ) of the Act. While considering whether there is a dispute as to the actual claim, the Court must not only satisfy itself as to the proof of such debt, but also the bona fides in opposing a petition for winding up with a defence which is not moonshine. The Company Court cannot adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no price had been agreed upon and the sum demanded by the creditor was unreasonable. See London and Paris Banking Corporation [1874] LR 19 Eq. 444. Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been properly was not allowed. See Brighton Club Horfold Hotel Co. Ltd., In re [1865] 35 Beav 204 ." (p. 638) In the above judgment, the Apex Court had enunciated the following principles: ( i )Where the debt is undisputed, the court will not act upon a defence that the company has the ability to pay the debt but did not choose to pay that particular debt; ( ii )Where, however, there is no dispute that the company passed the creditor a debt entitled him to a winding up order but the exact, amount of the debt is disputed, the Court will make a winding up order without requiring the creditor to quantify the debt precisely; ( iii )The principles which the court acts are fist that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and, thirdly, the company adduced prima facie proof of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is raised as to whether any agreement had been entered into for payment of interest or whether the rate of interest, would be applicable or not. In the latter case, in our opinion, the application for winding up cannot be dismissed." (p. 217) In the said judgment, the Apex Court also considered the judgment of a Division Bench of this Court in Tube Investments of India Ltd. v. Rim Accessories (P.) Ltd. [1990] 3 Comp. LJ 322 , where the following principles relating to bona fide dispute had been evolved: "(1) If there is a dispute as regards the payment of the sum towards principal, however small that sum may be, a petition of winding up is not maintainable and the necessary forum for determination of such a dispute existing between the parties is the civil court; (2) The existence of a dispute with regard to payment of interest cannot at all be construed as existence of a bona fide dispute relegating the parties to decide such a dispute before the civil court and in such an eventuality, the company court itself is competent to decide such a dispute in the winding up proceedings; and (3) If there is no bona fide dispute with regard to the sum payable towards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant company had asked the respondent company to confirm the balance as shown in the balance confirmation statement, thereby meaning that the appellant company was not firm in the actual quantum of moneys due. 13. Insofar as the first objection is concerned, in the balance confirmation statement, the appellant company had made a claim for a sum of Rs. 79,872 vide document dated 3-5-2002 and further a sum of Rs. 2,4 8,418 by document dated 31-3-2000. Even, if the amounts claimed for the years 1998 and 1999 are excluded, still the amount shown in the balance confirmation statement was well within the period of limitation and was more than Rs. 1 lakh, as contemplated under section 433( e ) of the Act. The submission of the learned counsel for the respondent is that in view of the claim on barred debt, the balance confirmation statement cannot be construed to be one of a definite claim as to the quantum, which is legally enforced. Of course, the learned counsel would also rely upon the judgment of this Court in Sri Vijayalakshmi Art Productions v. Sivaraju G. 1996 (II) CTC 396. There cannot be any different opinion that the court must find out whether the claim is legally en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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