9911796707
TMI Blog2013 (4) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... with promise and assurance that whatever purchase is made by the respondent-Company, shall be paid before the due date, failing which the respondent-Company also agreed to pay the interest at the rate of 24% per annum. It is the case of the petitioner that the respondent-Company purchased gray fabrics under different bills as per its requirement from the petitioner. It is the case of the petitioner that the original Challan, lorry receipts and bills were sent to the respondent-Company along with goods, which were found in good condition by the respondent-Company. It is further the case of the petitioner as described in paragraph No.5 of the petition that out of said transactions, respondent-Company has not paid an amount to the tune of Rs. 17,89,189/- towards 17 bills of different numbers and different dates. It is further case of the petitioner that the respondent-Company has acknowledged the same and even though repeated demands were made, the petitioner has not received any amount against the aforesaid bills. 4. It appears from the record of the petition that on 07.04.2010, the petitioner resorted to arbitration proceedings against the respondent-Company before Mumbai Textile M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The respondent-Company specifically stated that the petitioner is brother-in-law of the Managing Director of respondent-Company and by resorting to this proceeding, the petitioner has actually tried to ventilate his social grievances. The respondent-Company further contended that the reasons given by the Arbitrators are proper and has contended that the Arbitrators have given various findings on merits, which clearly go against the petitioner. The respondent-Company specifically has contended that no unpaid dues of the petitioner from the respondent-Company are due and payable as alleged and has disputed the claim, which is based on books of accounts of the petitioner. 8. It may be noted that the petitioner has filed a rejoinder denying the contentions raised by the respondent-Company in its reply. The petitioner has further filed Additional Affidavit, whereby the petitioner has produced extracts of Balance-sheet of financial year of 2009-2010, 2010-2011 and 2011-2012 of the petitioner. The respondent- Company has filed a reply to the Additional Affidavit filed by the petitioner and has contended that the petitioner has not produced a single document or evidence to show as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p before this Court. He further contended that the respondent-Company has no registered office or factory at Ahmedabad and has submitted that no goods were ordered by the respondent-Company from the petitioner, and therefore, there is no question of any goods having been received in good condition. He further contended that transaction was in form of bill purchasing and that too of the year 2006, whereas the petitioner has resorted to arbitration proceedings in the year 2010 i.e. after 4 years and thereafter, preferred this petition in the year 2012 i.e. 2 years after the arbitration proceedings came to be terminated. He therefore, contended that the debt is not an admitted debt and therefore, the petition is liable to be dismissed. He further contended that none of the grounds raised in the petition justifies that any amount is due and payable much less any admitted debt. He alleged that because of severe personal relation with the Managing Director of the respondent-Company, the petitioner has filed this frivolous petition, which deserves to be dismissed with costs. 11. Considering the rival submissions made by both the learned counsel for the respective parties, at the outset, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed Additional Affidavit dated 13.02.2013 and has produced certain bills along with the said affidavit and on perusing the documents, which are produced on later stage, the same does not in any manner even prima facie establish the claim, as raised by the petitioner in the petition. Lorry receipts, which are produced are of different transporters, wherein it is mentioned that the goods were transported to Ichalkaranji to Ahmedabad. The bills of the respondent- Company, which are produced are not of the petitioner but is of another concerned company named 'Nec Tex-Mumbai' and except entry of the ledger account of the petitioner, nothing is produced by the petitioner. The petitioner has not been able to produce any document on record, whereby it can be said that the goods were sold by the petitioner to respondent-Company and that goods were actually delivered to the respondent- Company and that bills have remained unpaid and such a debt is admitted by the respondent- Company. 14. Mr. S.M. Gohil, learned counsel for the petitioner relied upon the judgment of the Karnataka High Court in the case of State Bank of India Vs. Hegde and Golay Limited reported in 1983 LawSuit (Kar) 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power to wind up, ipso facto. (4) It is necessary for the Company Court to consider the financial status, strength and substratum of the Company, in overall context. It is possible, at times, there may be a cash crunch. It may be also, possible, at times, the temporary cash crisis despite high sale and heavy turnover and, therefore, in such a situation, mere disability or only on the ground of inability to pay would not constitute a ground empowering the Court to wind up the Company. (5) If the Company is an ongoing concern having regular business and employment of employees, the Court cannot remain oblivious to this aspect. The effect of winding up would be of putting an end of the business or an industry or an entrepreneurship and, in turn, resulting into loss of employment to the several employees and loss of production and effect on the larger interest of the society. (6) Even dividend declared by the company regularly and having profit in the light of the profit and loss account, though temporarily, there may be inability to pay the debt or in case of any eventuality, the company is unable to make the payment of dues and that by itself could not be construed as a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficulty as winding up is a measure of last resort. (15) Winding up course cannot be adopted as a recourse to recovery of the debt (16) The Court must bear in mind one more celebrated principle and consider whether the Company has reached a stage where it is obviously and plainly and commercially insolvent, that is to say, that its assets are such and its existing liabilities are such as to make the Court feel clearly satisfied that currents assets would be insufficient to meet the current liabilities, along with other principles. (17) It is also necessary to consider whether the respondent Company has become defunct or has closed its business for quite some time, whether it is commercially insolvent. For the purpose of finding commercial insolvency, a mere look into the financial data is relevant to examine about its soundness. In all matters relating to winding up, the Court may have regard to the wishes of the creditors and contributories and may, if necessary, ascertain their wishes appropriately. If the Company is solvent, the wishes of the contributories would carry more weight as they are persons, mainly, interested in the assets. (18) The element of public policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonafide dispute. It must be strictly noted that winding up petition is not an alternate to civil suit." 16. Similarly, a view has been expressed by the Apex Court in the case of Pradeshiya Industrial & Investment Corporation of U.P. Vs. North India Petrochemicals Ltd., reported in (1994) 3 SCC 348, wherein, the Hon'ble Apex Court has held that where there exists bonafide dispute and the dues are not admitted, the winding up petition is required to be dismissed. 17. Considering the aforesaid principles, in opinion of this Court, none of the exigencies which are laid down exist in the present petition. Apart from the fact that out of 15 bills are of the year 2006 and 2 bills are of the year 2009, it is noteworthy that the petitioner resorted to arbitration proceedings in the year 2010 and after termination of the same, issued statutory notice after about 17 months, thereafter, filed the present petition in the year 2012. The petitioner has also not been able to even produce any document, which would even prima facie establish that the transactions as described in the petition were genuine business transactions between the petitioner and respondent-Company and that legitimate ..... 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