TMI Blog2014 (3) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the present winding up petition under section 433(e), 434 and 439 of the Companies Act, 1956 (hereinafter referred to as the Act‟), inter alia, praying for winding up of the respondent company on the ground that the respondent company has been unable to pay a sum of Rs.19,41,280/-, which is alleged to be due and payable to the petitioner against the invoice dated 14.05.2010 raised on the respondent. The petitioner claims that this invoice remains unpaid despite a notice being served on the respondent under Section 434(1)(a) of the Act. The respondent has disputed the said amount and has claimed that the petitioner has been unable to perform its obligations under the agreement dated 13.01.2010 entered into between the parties and therefore, no amount is payable to the petitioner. According to the respondent, the petitioner is liable to refund the sum of Rs.19,41,280/- which had been paid by the respondent to the petitioner, earlier. 2. The controversy to be considered in the present case is whether the dispute raised by the respondent is a bonafide dispute. 3. Briefly stated the facts are as under:- 3.1 The respondent company is engaged in the business of deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tform and Deployment related issues. The above Terms and Conditions were accepted and agreed between Sasken Communication Technologies Ltd. and Cellcast Interactive India Pvt. Ltd. and the parties have entered into an elaborate Business Agreement named IVR Delivery Platform Licence Agreement dated 13th January, 2010. 3.3 A consideration of Rs.32 lacs was agreed towards licensing of PowerConnect Software and Deployment of 144 EI and Rs.12 lac was payable for Engineering Services . Thus in aggregate a sum of Rs.44 lacs was agreed as the consideration for the purchase order. 40% of the entire consideration amount was payable in advance, further 40% of the consideration was payable on User Acceptance Test (UAT) and the balance 20% of the consideration was payable after 3 months from UAT clearance. The Engineering Services to be provided by petitioner included (a) a bug support for 3 months beyond UAT and (b) 6 monthly weekly Telecon with Architect from Sasken to address PowerConnect Software Platform and Deployment related issues. 3.4 The petitioner is stated to have provided the requisite licence and the respondent sent an e-mail on 07.05.2010 conveying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptable today, in spite of innumerable follow ups made in the last 5 Weeks. Why was this not communicated to Sasken as soon as the follow ups on the non-payment started 4 weeks ago? 3.7 The learned counsel for the respondent has drawn my attention to various emails exchanged in the month of April, 2010 which indicate that there were certain issues with regard to working of the system that were pointed out by the respondent and were addressed by the petitioner. The learned counsel for the respondent has also pointed out e-mails dated 21.05.2010 which indicate that even after the grant of UAT clearance, the respondent was facing problems with the system which required to be rectified on urgent basis. One of the said emails dated 21.06.2010 indicate that the respondent had to withdraw deploying PowerConnect system since the problem of call not connecting had repeated twice. The said relevant extract of the said email is reproduced below:- Pls find the attachment pertaining to the existing issues on the PowerConnect System. Do check 2 issues that are marked in Red in the attached document. Of these the issue pertaining to the Live Shows is ABSOLUTELY CRITICAL and a comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 under Section 434(1)(a) of the Companies Act, 1956 calling upon the respondent to pay a sum of Rs.19,41,280/- as well as a sum of Rs.8,80,000/- along with interest pursuant to the agreement dated 13.01.2010. The learned counsel for the petitioner has contended that on a strict reading of the agreement, the amount of Rs.19,41,280/- became due and payable immediately on the UAT Acceptance. It is submitted that there is no dispute that the said UAT Acceptance had been granted and, therefore, the amount as claimed was, admittedly, due and payable to the petitioner. In response to the contention that there were certain defects with the software applications as provided by the petitioner, the learned counsel for the petitioner submitted that the email dated 21.06.2010 addressed by the petitioner in response to the complaints indicated that the issues that were being raised were outside the scope of work to be performed by the petitioner. 4. The learned counsel for the respondent has submitted that the exchange of emails clearly indicate that there were defects in the software applications provided by the petitioner and these defects had not been addressed by the petitioner. He su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of a dispute and not on account of its inability to pay the debts. The assumption that a company is unable to pay its debts can only be made in a situation where the debt is undisputed or an illusory and a sham defense is sought to be raised to avoid the liability. In both these cases, the company is liable to pay the debt and the fact that it has failed and neglected to pay the same despite a notice under Section 434(1)(a) of the Act would indicate that the company is unable to discharge its liability. However, in a case where the company sincerely believes that the amount is not payable and is able to establish that there are bonafide disputes, the question of failure and neglect to pay an admitted debt does not arise as the claim is neither accepted as a debt nor admitted to be payable. In such circumstances there can be no failure or neglect to pay a debt as contemplated under Section 434(1)(a) of the Act. 8. In the present case, there can be no two opinions that the dispute between the parties is extant and not illusory. The exchange of emails clearly indicate that the disputes raised by the respondent are bonafide and contemporaneous to the claim made by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent is also without merit as a unilateral action by a claimant would not extend the period of limitation. The petitioner has not been able to point out any document after 14.05.2010 whereby the respondent has acknowledged the amount claimed as due and payable to the petitioner. In absence of any such document, the claim of the petitioner which is the subject matter of the present petition is, prima facie, barred by limitation. In any view, the contention that the claim is barred by limitation would provide the respondent a substantial defense against the petitioner. This court in Gautam Electricals Co. Pvt. Ltd. v. Seth Sons Pvt. Ltd.: 29 (1986) DLT 102 has also held that a winding up petition for a time barred debt would not be maintainable. The relevant extracts from the said judgment are quoted below: (4) But can a creditor seek a winding up order on the basis of the company's deemed inability to pay the debt which is barred by time ? The answer to this question has to be in the negative. The debt could be a valid basis for the petition and the winding up order only if the debt that remains unpaid, notwithstanding statutory notice, is both due and recoverable.. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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