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OJA/12/2010 1/ 6 ORDER
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THE HIGH COURT OF GUJARAT AT AHMEDABAD
O.J.APPEAL
No. 12 of 2010
In
COMPANY
PETITION No. 34 of 2007
=========================================================
ICEM
ENGINEERING COMPANY LIMITED - Appellant(s)
Versus
A
B SHIPYARD LIMITED - Opponent(s)
=========================================================
Appearance :
MR
ASHOK L SHAH for
Appellant(s) : 1,
MR SN THAKKAR for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 30/07/2010
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE D.A.MEHTA)
1. The
appellant herein is the original petitioner in Company Petition No.
34 of 2007 while the respondent is the respondent in the petition.
Hereinafter for the sake of convenience the parties shall be referred
to as per their respective description in the petition. The
petitioner preferred Company Petition seeking winding up of
respondent Company on the ground that the petitioner is entitled to
recover a sum of Rs.27,72,427/- with interest @ 12% p.a. till the
point of time the payment is made. The Company Court has vide
impugned order dated 3.8.2009 rejected the petition having it open to
the petitioner to resort to the proceedings for the recovery of the
amount as may be permissible in law.
2. On
behalf of the petitioner learned Counsel submitted that the Company
Court has erred in coming to the conclusion that there was a dispute
as to entitlement of the amount due to the petitioner as can be seen
from the documents available with the Central Excise Department. That
there was no dispute that the petitioner had supplied goods to
respondent Company for which payment was due from the respondent to
the petitioner. It was submitted that on service of statutory
notice, respondent Company had responded to the notice but had
refused to discharge its liability on the specious plea that there
was a dispute amongst the parties. That considering the documents,
more particularly certificate dated 6.8.2003 issued by the
Superintendent of Central Excise, Range V, Mulund Division, it was
apparent that the goods were supplied of the value stipulated in the
certificate to respondent Company and respondent having obtained
benefit thereof could not now be permitted to say that there was a
dispute.
3. As
can be seen from the impugned order made by the Company Court, in
paragraph No.5 it has been recorded that there is genuine
dispute about the right of the petitioner to recover the amount and
the liability of the respondent company to pay the amount in
addition to the contract . In relation to the refund of excise
duty and the so called benefit of excise duty availed of by the
respondent company, the Company Court has come to the conclusion that
from the said document it was not possible to record that the dispute
was not genuine or was dishonest. The Company Court has further found
that in absence of any express contract for extra charges due to
price variation the entitlement of the petitioner Company was not
established and the dispute raised by the respondent cannot be termed
to be not genuine. Thereafter in paragraph No.7 the Court has
recorded thus :
The
aforesaid coupled with the circumstance that there is no other
authenticated documents produced before this Court to show that the
financial condition of the respondent company is deteriorated to the
extent that it is unable to pay the dues. No extract of books of
account or balance sheets are produced of the respondent company .
4. In
light of the aforesaid findings if one considers the Provisions of
sections 433(2) read with 434(1) of the Companies Act, 1956 (the
Act), it becomes clear that no interference is warranted in the
discretion exercised by the Company Court while rejecting the
petition. If one reads section 434(1)(a) of the Act in isolation, the
contention advanced on behalf of the petitioner to the effect that
respondent Company is unable to pay its debts because after service
of statutory notice and expiry of three weeks thereafter respondent
Company had neglected to pay the sum or secure the sum to the
reasonable satisfaction and the creditor would be entitled for an
order of winding up of respondent Company cannot be accepted. Though
three conditions stipulated in section 434(1) of the Act may be
independent of each other it does not mean that the Court is
required to ignore provisions of section 433 of the Act. While
section 433 specifically lays down the circumstances in which a
Company may be wound up by the Court, section 434 of the Act
describes the conditions/contingencies upon happening of anyone of
those the Court may raise a presumption that the Company in question
is unable to pay its debts. However, from the said deeming provisions
it is not possible to hold that the discretion vested in the Company
Court is taken away merely upon the petitioner showing satisfaction
of anyone of the conditions stipulated by section 434 of the Act.
This position was in fact not even disputed by the learned Advocate
for the appellant.
5. Hence,
the Court is only required to consider as to whether the discretion
exercised by the Company Court is in consonance with the provisions
of the Act and the legal position relating to winding up of a
Company. In light of the findings recorded by the Company Court it is
not possible to state that the Company Court has committed any legal
infirmity so as to warrant interference. The appeal is accordingly
dismissed.
Sd/-
Sd/-
(D.A.
Mehta, J.) (H.N. Devani, J.)
M.M.BHATT
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