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2015 (6) TMI 331 - CALCUTTA HIGH COURT

2015 (6) TMI 331 - CALCUTTA HIGH COURT - TMI - Default in payment of bills - Maintainability of Winding up application - Three different lines of defence taken by company - Held that:- We thus conclude, the petition by a creditor would be maintainable on both counts. Once the creditor established his right to claim the amount more than ₹ 500/- the onus would shift on the company to rebut such claim by raising bona fide dispute. Once the bona fide dispute is raised it would weaken the chanc .....

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hree different lines of defence indicated above, would run contrary to each other, they would however, draw a common interference, those were cooked up only to stall the process of winding up. - Decided against the appellant. - A.P.O. No. 235 of 2014, A.P.O. No. 236 of 2014, C.P. 349 of 2013 - Dated:- 23-4-2015 - Ashim Kumar Banerjee And Shivakant Prasad, JJ. For The Appellant : Mr. Sakya Sen, Senior Advocate, Mr. Aniruddha Mitra, Advocate and Mr. Rohit Mukherjee, Advocate For The Respondent : M .....

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,000, 18,500 and 35,000 respectively aggregating to ₹ 88,500. The Company initially asked the transporter to raise the fourth bill on the consignee Radha Strips Private Limited. They did so however, they were subsequently told; Nampa would pay the said bill, despite reminders the bills were not paid. Transporter issued a statutory notice of demand vide letter dated January 7, 2013 that the Company duly received. The Company neither paid the said sum nor replied to the statutory notice of d .....

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500. While rejecting the contention of the Company, His Lordship observed, the change of registered office was not in the knowledge of the transporter. In reply, the Company did not raise such plea. On merit, His Lordship was of the view, had the bills not been received the contemporaneous objection should have been raised in the correspondence exchanged between the parties. Hence, such belated objection was without any basis. His Lordship also negated the plea that damage was caused to the mat .....

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total transaction would involve several lacs of rupees and the transporter never raised any grievance with regard to nonpayment. The payments were paid by cheque or RTGS. They give details of payments. With regard to the fourth bill, the Company denied their liability as it was raised on Radha Strips. The Company relied on a no due certificate issued by the transporter being Annexure-F to the said application. The learned Judge heard the application. With regard to the fourth bill, the Company .....

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ld have been annexed in the affidavit. The Division Bench however, observed at the last, it is however, well-settled that the observations made in the proceedings which were basically inter-locutary do not determine the final result of the proceeding . The matter appeared before the learned Judge again at the post advertisement stage. His Lordship directed affidavits to be exchanged. The learned Judge ultimately passed an order of winding up. From the order of winding up we find, the Company exp .....

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Bench, while admitting the appeal, directed deposit of the principal amount and stayed the order of winding up upon such deposit being made. We are told, deposits were made, and we heard both the appeals of the above mentioned dates. CONTENTIONS: Mr. Sakya Sen learned Counsel appearing in support of the appeals, would raise the plea, the learned Company Judge could not have ignored the dispute raised on merit at the post admission stage. The learned Judge was duty bound to deal with the contenti .....

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se dispute on merit, the Company got the opportunity at the pre-admission stage. They contested the claim on merit and lost. Their application for recall stood dismissed. Their appeal was unsuccessful hence; the learned Company Judge was right in rejecting the contention on merit raised at the post advertisement stage. OUR VIEW: The decision cited at the bar would not have any conflict at all. The conflict so sought to be raised at the bar was unfounded and without any basis. In the case of Kota .....

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the creditor serves the notice upon the company asking them to pay off the dues the company has option either to pay off or dispute the same. Even if the company has means to pay and does not pay without any reasonable cause it would be liable to be wound up. However, this question may not be relevant here as the record shows; the company was in involved circumstances due to its precarious financial condition. In our view, His Lordship should have admitted the winding up petition and directed ad .....

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on. This irregularity could not be presumed as mala fide as erroneously held by his Lordship. If we go by His Lordship s views per se on section 434 (1) (a) we might agree with the ultimate result. However, the right of a creditor, secured or unsecured, to maintain the winding up petition would lie both under section 434 (1) (a) as well as 433 (e) and (f). Mr. Mookherjee contended, it was not argued. The learned judge however mentioned about the other aspect particularly the issue of commercial .....

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equence. Even if we accept the view of His Lordship on the interpretation of section 434 (1) (a) we would not be in a position to agree with the ultimate finding as we find enough material to hold, the petition was maintainable in terms of sections 433 (e) and (f) read with sections 439 (1) (b) and 439 (2). Often we mix up the remedy when a creditor sues the Company for unpaid debt. If it is a civil suit for recovery of the claim, the adjudication on the claim must be final before a decree is pa .....

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Harinagar Sugar Mills Company Limited Vs. M.W. Pradhan reported in Volume- 36 Company Cases page-426, the Apex Court observed, process of winding up was an equitable mode of execution that gave a good handle to the creditors to realize the debt by utilizing the tool of winding up. However, the main and the only relief in the winding up would not help the creditor to use such tool for recovery. Even if at the instance of a creditor, if a Company is wound up, the creditor ipso facto would not be e .....

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ong drawn complex process would not be there, a creditor can simply sue its debtor even if it is a Company and on final adjudication, he would get a decree from Court that he would be entitled to put to execution. Such simple process would help him to recover the dues. The process of adjudication in a civil suit and a winding up proceeding would be totally different from each other. As observed hereinbefore, the creditor would be entitled to file a winding up proceeding based on the presumption .....

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dication is made and such adjudication goes against the Company, it is final between the Company and the creditor. In case the Company does not challenge the same higher up, such adjudication would only help the creditor to proceed further with his winding up proceeding. Once such adjudication is made and the petitions are admitted it takes the representative character upon public advertisement of the notice. Such public advertisement would bring all connected with the Company being its creditor .....

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uld be of no consequence in case others would agree to carry the flag till the last. The Karnataka decision in the case of Air Wings (supra), would however permit the Company to raise dispute on the claim even at the post admission stage. We are unable to accept such situation. We do not know under what circumstance, the Karnataka Division Bench observed so. In our High Court there is a full hearing on the claim at the pre-admission stage and the adjudication after considering the rival contenti .....

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isturbing the finality on the issue. It is true, learned Judge gave directions for affidavits at the post advertisement stage. Such direction would permit the Company to oppose the winding up proceeding with the handicap; they would be entitled to raise all other issues except the dispute on merits of the claim. In a Single Bench decision one of us (Banerjee, J.) in the case of SRC Steel Limited , however, observed, such adjudication was prima facie in nature. The judgment was carried in appeal. .....

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prima facie finding which has resulted in admission and advertisement of the petition, there is no case for winding up. Such observation was made in a different context. If we read the judgment as a whole we would find, the question arose at what stage the enquiry on merits would be done. The Division Bench observed, a pre-admission hearing was the need of the hour. While deciding the procedural aspect, the Division Bench also prescribed the scope of enquiry and while doing so the Division Bench .....

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y. Hence, in our view, the learned Judge was right in not going into the merits of the matter at the post admission stage. We have discussed the law on the subject as the same was raised by Mr. Sen. The facts would however, not in any way change the situation even if we hold otherwise. The creditor had a claim on four unpaid bills. Initially, the Company contended, they suffered loss because of mishandling of the consignment hence; they were not obliged to pay. The learned Counsel subsequently t .....

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d however, draw a common interference, those were cooked up only to stall the process of winding up. On one defence, the Company tried to resist, they were unsuccessful. They did not challenge the same contemporaneously. They filed the application for recall with a new plea that would be totally contrary to the former. They lost again. Their appeal was unsuccessful. They did not go higher up. If we do not draw finality, there would be no sanctity to the decision of the Court of law. Their third .....

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