TMI Blog2011 (6) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed by the petitioner in the statutory notice is undisputed amount or admitted amount. Therefore, the company petition does not warrant admission and accordingly, the same is hereby dismissed at the stage of admission. - C.P. NO. 107 OF 2010 - - - Dated:- 28-6-2011 - B. SESHASAYANA REDDY, J. Pramod Kumar Kedia for the Petitioner. K. Krishna Mohan for the Respondent. JUDGMENT 1. This company petition under sections 433(e), 434(1)(a) and 439 of the Companies Act, 1956 ('the Act') read with rule 95 of the Companies (Court) Rules, 1959, has been taken out by M/s. Venkateswara Flexo Pack P. Ltd., seeking an order of winding up against the respondent-company, viz., M/s. Sampre Nutritions Ltd., and to appoint the official liquidator attached to this court as its liquidator to take charge of the assets, properties, income and business of the respondent-company. 2. The petitioner is a private limited company carrying on the business of manufacturing of various packing materials such as laminated films, pouches, PVC shrink sleeves and allied items, etc. The respondent is a private limited company carrying on the business of manufacturing various kinds of chocolates. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual rate was Rs. 175 per kg. The petitioner-company submitted bills quoting Rs. 205 per kg., to its bankers. The petitioner-company, right from the inception of the business, started playing foul with the respondent-company (i) over supply of materials other than orders placed ; (ii) supply of substandard materials ; (iii) materials different from the one order placed ; (iv) colour different and different shades ; and (v) smudges in the printing, etc., on the wrappers, which resulted in huge loss to the respondent-company. As a result, the companies like Indian Airlines rejected the materials causing huge loss to the respondent-company. Most of the companies rejected the materials stating that it does not look genuine and are fake and thereby the name of the company was tarnished losing its prestigious name. Numerous letters were addressed to the petitioner-company during the years 2001-05 pointing out inferior quality materials supplied and seeking deputation of its control officer to check the materials sent. The respondent-company addressed number of letters to the petitioner-company to take back the rejected materials as it was occupying majority of the godowns, which was me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent-company. 7. It is contended by learned counsel appearing for the petitioner-company that the respondent-company indebted to the petitioner-company to a tune of Rs. 2,08,31,551 together with interest being the value of the products supplied by the petitioner-company on credit basis under a running account and thereupon, the petitioner-company got issued a legal notice dated December 22, 2009, to the respondent-company and its directors calling upon them to pay the due amount of Rs. 2,08,31,551. The respondent-company and its directors received the notice, but failed to make payment within the stipulated time and thereby cause of action has arisen to the petitioner-company to initiate appropriate legal proceedings, including proceedings for winding up of the respondent-company. He would also contend that the respondent-company and its directors gave a vague and illusive reply, dated January 18, 2010 and the plea advanced by them, in the reply notice does not constitute a bona fide dispute, in which event, this company petition deserves to be admitted and further proceeding is required to be taken up. In support of his contentions, reliance has been placed on the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of understanding dated February 9, 2008. Learned counsel refers the copy of the memorandum of understanding dated February 9, 2008 and also calculation sheet annexed to it. Learned counsel would submit that even as per the annual report of the year 2009-10, the respondent-company has earned net profit of Rs. 9.40 lakhs. He would also submit that the petition averments do not indicate that the respondent-company has been indebted to various other creditors and that the existing assets, probable assets are less than the existing liabilities of the respondent-company. In the absence of such an allegation, it cannot be said that the respondent-company has become commercially insolvent. Learned counsel refers the relevant portion of paragraph (7) of the petition to buttress his submissions that the respondent-company has ample means and funds and assets and solvent enough to satisfy the claim of the creditors. It is useful to refer paragraph (7) of the petition, which reads as hereunder : "7. The petitioner further submits that apart from the lawful dues payable to the petitioner-company, the respondent also owes huge amounts to many of its other creditors, whom it has been avoidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be a determined or a definite sum of money payable immediately or at a future date. What then is inability, when the section says 'unable to pay its dues ?' That should be taken in the commercial sense. In that, it is unable to meet current demands. As stated by William James V. C., it is "plainly and commercially insolvent - that is to say, that its assets are such, and its existing liabilities are such as to make it reasonably certain - as to make the court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. The Supreme Court in Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125, while dealing with the scope of section 433(e) of the Companies Act, 1956, has held that if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The court has to dismiss the petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. Where the debt is undisputed, the court will not act upon a defence that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called upon to wind up a company under clause (e) of section 433, what is to be considered is not whether the company if it converted all its assets into cash would be able to discharge its debts but whether in a commercial sense the company is insolvent and whether it is unable to meet its current demands although the assets when released may exceed its liabilities. The petitioner has to place prima facie evidence that the company is commercially insolvent, that its existing assets, probable assets are insufficient to meet the existing liabilities, that the company is heavily indebted to various creditors, its assets being in mortgage or in pledge and that there is no possible chance of profit being made or its business being carried on. If from the materials on record it cannot be made out that the company is commercially insolvent, then the petition could be dismissed even before issuing notice regarding admission. There is a responsibility and duty on the courts to find whether the concerned company has become commercially insolvent for purposes of winding up. At the initial stage the court would be circumspect and judicious in exercising discretion and should take all relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
