TMI Blog2009 (7) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent. JUDGMENT Vikramajit Sen, J. - The present Company Appeal is directed against the impugned Judgment and Order of the learned Company Judge dated 20-11-2006 admitting the winding up petition of Deutshe Homeopathic Union DHU Arzneimittel GmbH Co. Kg, the Respondent in the present Appeal. Publication of citations and appointment of provisional liquidator had been deferred for a period of two months so as to enable the said respondent-company to pay 9,87,044.97 along with interest at the rate of five per cent per annum from the date of filing of the Petition till payment. The amount of said 9,87,044.97 has been reached by the learned Company Judge by setting-off 4,41,438.67, the counter-claim that was held to be genuine, from 14,28,003.44 which is the total outstanding amount due on the German Homeopathic Distributors Private Limited (hereinafter referred as Appellants ) on account of eight different orders for purchase of homoeopathic medicines, which were undisputedly duly supplied. 2. The Appellant is an Indian Company which was the sole selling agent for Dr. Willmar Schwabe Gmbh Co. KG in India of which the Respondent is an affiliate. The last Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Act. To conform with the requirements of the law, the appellant was required to affix additional labels on the bottles and the outer packaging, for which the appellant had to incur heavy costs. The learned Company Judge, while adjudicating on this claim, had perforce to refer to the correspondence made between the parties and not the Agreement because the learned Judge held the same to be inconsequential for this claim as the Agreement dated 24-6-1998 stood expired by the efflux of time. It was further held that the parties had settled the claim at an amount of 75,000 for the year 2002 and 65,000 for the year 2003. The claim for the year 2000 has been held to be time-barred and that of the year 2004 to be an afterthought and not bona fide . The learned Judge only held claim of 75,000 for the year 2001 to be a genuine counter-claim. Fourthly, an amount of 3,50,717.55 has been claimed towards the stock which, according to them, was bound to be purchased back by the respondent as per Clause IX of the Agreement dated 24-6-1998 limited to three months requirement. The learned Company Judge has held that the first letter written by the respondent-company for repurchase was on 24-11-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the ground that no documents or materials in support were filed by the appellant. Evaluating all the counter-claims, the learned Judge held a total of 4,76,243.45 to be a substantial counter-claim and rest of the counter-claim to be a phoney claim. 6. The appellant has also raised Objections to the Affidavit filed in support of the Petition on the premise that the same was not signed by the person mentioned under rule 21 of the Companies (Court) Rules, 1959. The learned Company Judge has disregarded the same, holding it to be an irregularity which can be cured. 7. It has been vehemently argued by Mr. Sawhney, learned Senior Counsel for the appellant that the learned Company Judge has exceeded the jurisdiction vested on him in a winding-up petition under section 433( e ), ( f ), section 434 read with Section 439 of the Companies Act, 1956 (hereinafter referred to as the Act ) and misapplied Jural discretion by ascertaining the amount of the counter-claim of the appellant and holding that evidence has not been placed on record for certain counter-claims. In a Company Petition the scope of enquiry is limited to prima facie determining whether the counter-claim raised i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends." (p. 638) 9. In Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456, the Supreme Court has enunciated the law in these words : "It is well-settled that "a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the Court. At one time petition founded 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 grounds, the Court may decide it on the petition and make the order." (p. 463) In the instant case, I find that the facts are disputed and there is case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s likely to succeed in point of law, and the company adduces prima facie proof of the facts on which the defence depends, the petition should be rejected; ( iv ) The Court may consider the wishes of creditors so long as these appear to be justified; ( v ) The machinery of winding up should not be allowed to be utilised merely as a means of realising its debts. [For the above propositions see Pradeshiya Industrial Investment Corpn. of Uttar Pradesh v. North India Petro-Chemical Ltd. [1994] 79 Comp. Cas. 835 (SC) in which the observation in Amalgamated Commercial Traders (P.) Ltd. s case ( supra ) and Madhu Woollen Industries (P.) Ltd. s case ( supra ) have been paraphrased]; ( vi ) If the stance of the adversaries hangs in balance it is always open to the Company Court to order the respondent-company to deposit the disputed amount. This amount may be retained by the Court and be held to the credit of the suit, if any. [ see Ambala Bus Syndicate (P.) Ltd. v. Bala Financiers (P.) Ltd. [1983] 2 SCC 322 and Civil Appeal No. 720 of 1999 arising out of SLP (C) No. 14096 of 1998 - Nishal Enterprises v. Apte Amalgamations Ltd. decided on February 5, 1999]; ( vii ) Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim regarding repackaging of the medicines, the learned Company Judge erred in admitting the claim of 75,000 and declining the rest despite the Letters of Demand filed by appellant as Annexure R-12. As regards the fourth counter-claim regarding re-purchase of medicines after the termination of contract, the learned Single Judge ought not to have concluded that the appellant failed to request the respondent to repurchase the medicines within the stipulated three months period. Since the rival claims required adjudication, the Company Judge ought to have stayed, if not rejected the proceedings pending before him. Another counterclaim regarding the medicines, which were not manufactured by Doctor William Schwabe in Germany but by another company in Czech Republic, was raised which was declined by the learned Company Judge. The merits of this counter-claim are also subject-matter of civil adjudication and could not have been dismissed by the learned Company Judge in a winding up petition. 15. The contract between the parties was concluded by Schwabe by letter dated 27-10-2004. The appellant in the reply to the petition has filed a letter dated 5-11-2004, Annexure R-18, wherein, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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