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M/s. Concept Communication Ltd. Versus Scotts Garments Ltd.

Winding up petition - whether the petitioner-Company, and the respondent-Company have initially entered into a Marketing Budget, which was duly approved by the Chief Financial Officer, and the respondent-Company or not? - Held that:- Admittedly, on 30.3.2016, the petitioner-Company had sent a statutory notice to the respondent-Company. In Para-5 of the said notice, the petitioner-Company h ad claimed that the respondent-Company owe them an amount of ₹ 1,63,06,154/- as on 8th of May 2014. T .....

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154/- was owed by the respondent-Company to the petitioner-Company. - Since the denial is an absolute one, since the denial has been made in reply to the statutory notice issued by the petitioner-Company, the learned counsel for the petitioner is unjustified in claiming that denial is an after-thought. - Considering the fact that respondent-Company has denied that it owes any debt to the petitioner-Comp any, considering the disputed questions of fact which are involved in the present cas .....

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M/s. Concept Communications Limited, has filed the present petition under Sections 433 (e) & (f) read with Section 434(1) (a) and 439(1) (b) of the Companies Act for winding up of the respondent-Company, namely M/s. Scotts Garments Limited. 2. Briefly the facts of the case are that according to the petitioner-Company, the respondent-Company was initially formed as a Partnership Firm on 01.12.1992, in the name and style of Scotts Garments . In March, 2002, it was incorporated as a Private Lim .....

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tor of the respondent-Company, along with one Mr. Thiagarajan Manickam, Chief Financial Officer, approached the petitioner- Company for engaging its services towards advertising and publicity of the respondent-Company, with an intent ion to increase its brand value, and create awareness among the public at large. Since the respondent-Company was also coming up with a public issue of equity shares during the same period, the Company further desired to engage the services of the petitioner for pub .....

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d rendered its services to the respondent-Company. 4. During the period from 2013 to 2014, the petitioner-Company raised various invoices against the respondent-Company, totaling an amount of ₹ 2,33,06,154/-. Against the said amount, the petitioner-Company claims that the respondent-Company paid an amount of ₹ 60,00,000/- on 06.05.2014, and further made the payment of ₹ 10,0 0,000/- on 07.05.2014. Therefore, according to the petitioner- Company, as on 08.05.2014, the respondent .....

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ue amount. However, the respondent-Company did not take any action on the request made by the petitioner-Company. Consequently, the petitioner- Company has filed a case under Section 138 r/w Sect ion 142 of the Negotiable Instruments Act, against the respondent- Company. 6. Considering the fact that huge amount was still owed by the respondent-Company to the petitioner, it issued a statutory notice on 30.03.2016. However, despite issuance of the said notice, no action has been taken by the respo .....

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sent writ petition. According to him, before a writ petition can be entertained by this Court, it is imperative that the petitioner-Company should not only allege that an amount is due, and debts needs to be cleared, but it is also imperative that the petitioner-Company should establish that the amount has been admitted by the respondent-Company as a debt. However, in the present case, the respondent-Company has taken a categorical stand that it does not owe any amount of money to the petitioner .....

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. Rapid Radio Solutions Pvt. Ltd. v. M/s. Ecole Solutions Pvt. Ltd. (COP 81/2014, decided by this Court on 01.07.2016), the learned counsel has pleaded that where the debt has not been admitted, where there are disputed questions of facts, where the claim made by the petitioner-Company needs to be established, winding up petition is not necessary. Only civil suit would lie against the respondent-Company. Therefore, the present petition is not maintainable before this Court. 8. On the other hand, .....

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rdly, relying on the case of Vijay Industries v. NATL Technologies Limited [(2009) 3 SCC 527], the learned counsel has pleaded that a concrete stand has to be taken by the respondent-Company in its defense. However, no such concrete defense has been taken by the respondent-Company before this Court. Therefore, the winding up petit ion is maintainable before this Court. 9. In rejoinder, Mr. Pramod Kathavi has submitted that the case of the respondent-Company with regard to two cheques issued is t .....

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mission made by the respondent-Company with regard to the existence of debt. 10. In the present petition, the questions that arise for consideration are: whether the petitioner-Company, and the respondent-Company have initially entered into a Marketing Budget, which was duly approved by the Chief Financial Officer, and the respondent-Company or not? Secondly, under what circumstances the two cheques dated 15th of July 2015, were submitted by the respondent- Company to the petitioner-Company? Thi .....

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14. The said para has been denied specifically by the respondent-Company in its reply dated 10th of May 2016. The respondent-Company, has denied that the payment of ₹ 70 lakhs was part payment of the alleged amount of ₹ 2,33,06,154/-. It further claimed that the payment of ₹ 70 lakhs was, in fact, full and final payment of the amount owed by the respondent-Company to the petitioner-Company. Therefore, it further denied the fact that on 8th of May 2014, an amount of ₹ 1,63 .....

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se, naturally the present winding up petition is not maintainable before this Court. 14. In the case of M/s. Rapid Radio Solutions Pvt. Ltd., (supra) this Court had clearly opined that "This Court is of the considered opinion that if the liability of the creditor is bona fide disputed by the respondent-Company, which is sought to be wound up under the provisions of Section 433(e) r/w. Section 439 of the Act, the winding up petition is an illsuited remedy and it cannot substitute a regular t .....

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