Whether Winding up petition can be filed under Companies Act for recovery of outstanding debts?


Court :
Delhi High Court

Brief :
The petitioners M/S Nakshatra Steel Sales & Services Ltd. And M/S Leo Ispat Ltd.supplied various iron and steel products tothe respondent companyM/S Radlay Metal Products Pvt. Ltd as per agreed specifications andraised bills for the materials supplied. Petitioners claimed that some of the invoices remained unpaid by the respondent despite receiving the delivery of products. Thepetitioners further stated that therespondent is liable to pay interest atthe rate of 4% per month on the delayed payment. Thesaid rate of interest has been agreed and specifically mentioned in theinvoices raised by the petitioner. The respondent issued various chequesin discharge of its liabilities which were dishonoured. Thus, the petitioners initiatedproceedings undersection 138 of NI Act against the respondent. Held that theproceedings were initiated by the petitioners to pressurize the respondent for extracting the disputed sums. Also, the proceedings before a company court are notrecovery proceedings and the company court cannot be used as a debtcollecting agency or as a means of bringing improper pressure on thecompany to pay a bona fide disputed debt. The conduct of petitioners was unfair.

Citation :
M/S Nakshatra Steel Sales& Services Ltd.- Petitioner versus M/S Radlay Metal Products Pvt. Ltd. – Respondent and M/S Leo Ispat Ltd. – Petitioner versus M/S Radlay Metal Products Pvt. Ltd- Respondent

THE HIGH COURT OF DELHI AT NEW DELHI

 

+ CO.PET.373/2012 & CA No. 1485/2012

M/S Nakshatra Steel Sales& Services Ltd.

Petitioner

 

Versus

 

M/S Radlay Metal ProductsPvt. Ltd.

Respondent

 

AND

 

+ CO. PET. 375/2012 & CA No. 1492/2012

M/S LeoIspat Ltd.

Petitioner

 

Versus

 

M/S Radlay Metal Products Pvt. Ltd.

Respondent

 

Advocates for the Petitioners: Mr Vivek Singh.

For the Respondents: Mr Tanmaya Mehta.

 

CORAM:-

HON’BLE MR JUSTICE VIBHU BAKHRU

 

Judgment delivered on: 05.05.2014

Judgement and facts of the case

1. The present petitions have been filed by the petitioner companiesundersections 433(e) and 434 of the Companies Act, 1956 (hereinafterreferred to as the ‘Act’), inter alia, praying for winding up of therespondent company on the ground that the respondent company has failedand neglected to pay a sum of `1,03,18,917/- along with late paymentcharges (in Co. Pet. No.373/2012) and a sum of `1,18,11,927/- along withlate payment charges (in Co. Pet. No.375/2012), which are contended to bedue and payable by the respondent company on account of supply ofvarious iron and steel products by the petitioner companies. Although, therespondent disputes the liability as claimed by the petitioners, it is admittedthat the respondent owes an aggregate sum of `1,56,00,000/- to both thepetitioner companies. Notwithstanding the respondent’s contention that itowed only a sum of `1,56,00,000/- to the petitioners, the respondentoffered to pay the petitioners an aggregate sum of `1,79,00,000/-. Therespondent has offered to pay the said amount because the respondent hadalready issued cheques for the said amount in favour of the petitionercompanies, which had been dishonored. And, proceedings under section138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘NIAct’) had been instituted by the petitioners with respect to the dishonored instruments.

2. The controversy that needs to be addressed in the present petitions iswhether the defense raised by the respondent company is bonafide or asham defence. And, whether the petition is maintainable in view of theoffer made by the respondent to pay an amount of `1,79,00,000/- to thepetitioner.

3. Brief relevant facts with respect to Co. Pet No. 373/2012 are as follows:-

3.1 The petitioner company supplied various iron and steel products tothe respondent company as per the agreed specifications. The petitioner hadraised various bills for the materials supplied and the petitioner hasprovided the details of the invoices which have remained unpaid. It is statedthat the respondent company has failed to make the payment of the billsamounting to `1,03,18,917/- despite receiving the delivery of products. Thepetitioner has further stated that the respondent is liable to pay interest atthe rate of 4% per month on the delayed payment. It is submitted that thesaid rate of interest has been agreed and specifically mentioned in theinvoices raised by the petitioner. It is stated that the late payment chargesare not claimed as penalty but as pre-determined assessment of losssuffered by the supplier petitioner on account of any delay in the payment.Therefore, the petitioner has claimed and is entitled for an amount of`1,66,19,726/- as late payment charges till 31.1.2012.

3.2 It is stated that the respondent issued various cheques for an amountaggregating to `97,56,145/- in discharge of its liabilities, however, the saidcheques were dishonoured. The petitioner, by separate notices dated27.02.2012 under section 138 of the NI Act, demanded amounts of`20,08,692/-, `27,47,607/-, `28,45,540/- and `21,54,306/- on account ofthe dishonour of the cheques for the respective amounts. The respondentreplied to the said notices, by its separate replies dated 20.03.2012 andraised the issue of inferior quality of goods being supplied by the petitionerand non-adjustment of debit notes for an amount aggregating to`20,20,431/- (`5,31,259/- dated 09.09.2011, `8,31,814/- dated 04.02.2012and `6,57,358/- dated 18.12.2011). It is submitted by the petitioner that, asthe respondent failed to pay the said amounts within the time specified inthe notices, the petitioner initiated proceedings under section 138 of the NIAct and filed Criminal Complaints being Complaint No.190/1 (with respectto the notice for `20,08,692/-), Complaint No.194/1 (with respect to thenotice for `27,47,607/-), Complaint No.195/1 (with respect to the notice for`28,45,540/-) and Complaint No.196/1 (with respect to the notice for`21,54,306/-).

3.3 Subsequently, the petitioner also sent a statutory notice dated11.05.2012, under section 434(1)(a) of the Act, demanding the amount of`1,03,18,917/- along with late payment charges of `1,66,19,726/- till31.01.2012. The said statutory notice elicited no response from therespondent company. Thereafter, the petitioner filed the present winding uppetition on the ground that the respondent company was deemed to beunable to pay its debts as the respondent had failed to pay the amount of`1,03,18,917/- along with late payment charges, which were alleged to beadmittedly due, despite service of the statutory notice.

To read the full judgement, please find the attached file.



Attached File:

 

http://lobis.nic.in/dhc/VIB/judgement/05-05-2014/VIB05052014CP3732012.pdf

http://lobis.nic.in/dhc/VIB/judgement/05-05-2014/VIB05052014CP3752012.pdf

 

Hetvi Sheth
on 12 May 2014
Published in LAW
Views : 3891






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