JUDGMENT
R.L. Khurana, J.
1. The present petition under Sections 433 and 434 read with Section 439 of the Companies Act, 1956 (for short “the Act”), has been
preferred by the petitioner Messrs. Marigold Papers Limited, for the winding up of the respondent-company Messrs. Renuka Packages (Pvt.) Limited, having its registered office at Trilokpur Road, Kala Amb, in district Sirmaur.
2. Briefly, the averments made in the petition are these. The respondent-company had approached the petitioner-company through Messrs. Ratna Vanijya Paper and Board Merchants, for the supply of 10 mt. kraft paper vide confirmed order dated April 1, 1997, at the agreed rate of Rs. 14.05 paise per kg. In pursuance of such order the petitioner-company supplied kraft paper worth Rs. 1,34,793 to the respondent-company vide invoice dated April 10, 1997. As per the terms of the invoice vide which the supply of kraft paper was made, payment for the supply was to be made by the respondent-company within seven days of the receipt of the consignment failing which interest at the rate of 24 per cent. per annum was to be charged. The total amount of interest claimed till the date of the present petition has been assigned at Rs. 91,600.
3. The further case of the petitioner-company is that since the respondent-company failed to supply “C” forms in respect of the transaction, the petitioner-company had to bear additional burden of sales tax amounting to Rs. 7,777. On this amount also interest at the rate of 24 per cent. per annum amounting to Rs. 5,688 has been claimed. The petitioner-company has, therefore, averred that the total amount recoverable from the respondent-company comes to Rs. 2,40,038 as on January 31, 2000. The respondent-company failed to pay the outstanding amount in spite of repeated demands. Ultimately, the statutory notice dated January 31, 2000, under Section 434 of the Act was served by the petitioner-company calling upon the respondent-company to pay the outstanding amount of Rs. 2,40,038 within three weeks of the receipt of notice. The respondent-company did not pay the amount. Hence, the present petition.
4. The respondent-company resisted the petition on the following grounds :
(a) the petition on behalf of the petitioner-company has not been made by a duly competent and authorised person ;
(b) the claim of the petitioner-company is barred by time ;
(c) there is no privity of contract between the parties.
5. It was also pleaded that the respondent-company has a sound financial position and can discharge all its financial obligations.
6. It is well settled that a winding up petition is not a legitimate means to enforce payment of a debt which is bona fide disputed by the company. A petition filed ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the court. (see Amalgamated Commercial Traders (P) Ltd. v. A. C. K. Krishnaswami [1965] 35 Comp Cas 456 (SC).
7. In T. Srinivasa v. Flemming (India) Apotheke (P) Ltd. [1990] 68 Comp Cas 506 (Karn), it has been held by the High Court of Karnataka that it is not for the court hearing a petition for winding up under Section 433 of the Act to assess evidence and refuse a decree or to draw up a decree in favour of the petitioner and then to proceed to wind up the company. In summary procedure which the company court must follow, if the court is satisfied, prima facie, that the defence raised in the circumstances of the case is bona fide and is likely to succeed in a civil court, that would constitute sufficient reasons for the court to reject the petition, relegating the parties to the civil court.
8. The dispute between the parties in the present case revolves around disputed questions, which cannot possibly be decided in the present summary proceedings. Such questions can be appropriately decided in a properly framed suit.
9. The first question raised by the respondent-company is as to the competency of Shri Mahesh Kumar, director of the petitioner-company to maintain the present petition for and on behalf of the petitioner-company.
10. A copy of the resolution dated November 2, 1998, has been placed on record by the petitioners-company whereby the board of directors had authorised its director Shri Mahesh Kumar “to file suit in suitable court to recover the amount due with Messrs. Renuka Pakaging (P.) Ltd.”. such authorisation on the face of it is not to maintain a winding up petition under the Act. Therefore, the question whether such authorisation also covers the filing of winding up petition, is a disputed question which can be decided only in a properly instituted suit.
11. Admittedly, the supply of kraft paper was made on April 10, 1997, vide invoice, copy of which is annexure P-3 to the petition. It is a case of sale of goods and unless the payment is to be made on a stipulated date, the cause of action to the petitioner-company, if any, to recover the price of goods had arisen on April 10, 1997. The requisite period of limitation of three years to recover the price of goods expired on April 9, 2000. The present petition was filed on June 27, 2000. On the face of it, the claim of the petitioner was barred by time as on the date of the present petition.
12. It was contended on behalf of the petitioner-company that the claim is within time as on the date of petition in view of the acknowledgment made by the respondent-company vide its letter dated July 18, 1998 (copy of which is anenxure P-15 to the petition) read with letter dated July 8, 1998, addressed to the respondent-company (copy of which is annexure P-23 annexed to the rejoinder of the petitioner-company).
13. The question whether the contents of the two letters, annexures P-15 and P-
23 would constitute an acknowledgment within the meaning of Section 18 of
the Limitation Act, 1963, or not again is a disputed question which is required
to be decided on the basis of evidence.
14. Similarly, the third question as to whether there is any privity of contract between the parties or not, in view of the order placed vide annexure P-2 to the petition, which is a confirmed order placed by the respondent-company with Messrs. Ratna Vanijya, and the demands being made by the said Ratna Vanijya to the respondent-company for payment of the amount in respect of the supplies of kraft paper made, is a disputed question which can be decided only on the basis of evidence in a duly constituted suit.
15. The defences raised by the respondent-company on the face of it, appear to be bona fide and such defences, prima facie, are likely to succeed, Therefore, it is not a fit case for the exercise of powers of winding up under Section 433 of the Act.
16. Resultantly, the present petition fails and is, accordingly, dismissed.