Karnataka High Court
Shakti Prakash Metal Finishers Private ... vs Hindustan Machine Tools Limited (Hmt ... on 2 November, 2001
Equivalent citations: ILR2002KAR19, 2001(6)KARLJ467, 2002 AIR - KANT. H. C. R. 171, 2002 AIR - KANT. H. C. R. 68, (2001) 6 KANT LJ 467 (2002) 108 COMCAS 310, (2002) 108 COMCAS 310
Author: V.G. Sabhahit
Bench: V.G. Sabhahit
JUDGMENT
1. This O.S.A. is filed against the order of the learned Company Judge dated 24-11-2000 passed in Co. P. No. 8 of 1998 whereby the learned Company Judge has declined to issue a direction for winding up of the company. However, the learned Company Judge left it open to the appellant to file a suit in regard to the disputed amount in accordance with law.
2. In the instant case the appellant claimed payment of bills for the work executed along with interest and notice was issued for payment of interest and also additional penal interest. No reply was sent. However, it is stated that on earlier reply to notice confirming the actual due and denying the liability to pay any interest, the company did not pay the amount and therefore filed this petition for winding up.
3. The learned Counsel for the respondent-company has stated that the company has deposited more than the bills claimed and also made sufficient payments during the pendency of proceedings. The learned Single Judge on consideration found that it is seen that payment made by the first respondent during the pendency of the writ exceeded the amount claimed by the petitioner and for the claim of interest which has been denied by the respondent, directed to file a suit in regard to the said disputed amount in accordance with law as stated above.
4. The main grievance of the learned Counsel for the appellant is that the appellant is a small-scale industry, and once it has entered into a contract, with the respondents, the appellant is entitled to interest and the learned Company Judge has lost sight of paragraph 7 of the petition. The learned Company Judge has erred in observing that no averment was made in the petition to show that the conditions prescribed for applicability of the Act apply to the supplies by the appellant to HMT and therefore it is entitled to get winding up on the basis of the interest amount claimed.
5. On the other hand, learned Counsel for the company submits that they have deposited the amount of Rs. 16,49,260.31 ps. and the appellant has withdrawn the same without prejudice to his rights.
6. We have heard the learned Counsel for the appellants and the learned Counsel for the respondents and perused the material on record.
7. On consideration, we find that as per the averments there is a contract between the appellant and the respondents and the same has to be dealt with as per the terms of the agreement. Any violation of the terms of the contract cannot ipso facto come within the purview of Section 433 of the Companies Act for winding up of the company. It is also seen that it is not the legislative intention that Company Court should be converted itself into an ordinary Civil Court and proceed to hold a trial at the instance of individual claiming to be a creditor of the company on the basis of a contract. Under the circumstances, no direction as prayed for can be issued. It is also seen that non-payment of bill amount under a contractual agreement cannot be said to be an admitted debt. even when it is disputed. That apart, debt is something which is borrowed by a person on settled terms and conditions and settled rate of interest and it can also be resettled between the parties. Be that as it may. In any view of the matter and in the facts of the given case, it cannot be said that company is unable to pay its debt and Section 433 cannot be invoked. As discussed, we do not find any error or illegality in the order of the learned Single Judge so as to call for any interference. This writ appeal is dismissed.