Gujarat High Court
M/S.Mouldtech Industries vs M/S.Mekaster Engineering Ltd on 6 July, 2017
Author: R.M.Chhaya
Bench: R.M.Chhaya
O/COMP/436/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY PETITION NO. 436 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.M.CHHAYA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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M/S.MOULDTECH INDUSTRIES....Petitioner(s)
Versus
M/S.MEKASTER ENGINEERING LTD.....Respondent(s)
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Appearance:
MR. NITIN Y DIVATE, ADVOCATE for the Petitioner(s) No. 1
ADVOCATE NOTICE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA
Date : 06/07/2017
ORAL JUDGMENT
1. Heard Mr.Nitin Divate, learned counsel for the petitioner. Though served, no one appears for the respondent.
2. By way of this petition under Sections 433, 434 and 439 of the Companies Act, 1956, the petitioner has prayed for winding up of the Company known as "M/s. Mekaster Engineering Ltd.
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O/COMP/436/2015 JUDGMENT
3. Learned counsel for the petitioner has relied upon the contentions raised in this petition and has contended that the respondent Company has lost its financial substratum and has become t commercial insolvent and is not a running concern and therefore, the company is liable to be wound up as prayed for.
4. It is the case of the petitioner that, the petitioner is engaged in the business of supply of different types of ferrous casting and therefore, the respondent Company made a request to supply S.G.Iron casting as per the order and requirement of the respondent Company's order dated 24.09.2007 and pursuant to the same, the petitioner time and again supplied the goods to the respondent Company and in fact, the respondent Company supplied necessary raw materials from time to time as per their requirement of finish products and requested the petitioner to use the same for supply of the finished goods on conversion basis. It is further case of the petitioner that, the job work was carried out by the petitioner as per the requirements of the respondent Company and accordingly, the goods were supplied to the respondent Company from time to time. No dispute at all has been raised by the respondent Company and in fact, the respondent Company is already utilized the final products supplied by the petitioner. As it appears from the record and as contended by the petitioner, time and again the invoices were raised by the petitioner, which are forming part of the record, however, the respondent Company did not make the payment and even did not respond to the same. Therefore, the petitioner issued a statutory notice at its registered office as well as at the Corporate office at Delhi, which was received by Page 2 of 6 HC-NIC Page 2 of 6 Created On Sun Jul 23 15:56:13 IST 2017 O/COMP/436/2015 JUDGMENT the respondent Company. However, no response was given by the respondent Company. The petitioner has also relied upon the delivery receipts given by the transporter and has relied upon the challan issued by the respondent Company. It is, therefore, the case of the petitioner that, the respondent Company has neglected to make payment as demanded and raised in the statutory notice and therefore, it has become commercial insolvent and therefore, the respondent Company is liable to be wound up.
5. It deserves to be noted that Notice came to be issued by this Court (Coram : Hon'ble Ms. Justice Abhilasha Kumari) vide order dated 18.02.2016 and even though, it was served upon the respondent Company, the respondent Company has preferred not to appear before this Court. Thereafter, further order came to be passed on 25.04.2016 with a view to give opportunity to the respondent Company. Even after giving such opportunity, the respondent Company preferred not to appear and therefore, by detailed order dated 03.05.2016, this Court (Coram : Hon'ble Ms.Justice Abhilasha Kumari) was pleased to admit the matter and has passed the following order:-
"1. This petition has been preferred under Sections 433 and 434 of the Companies Act, 1956, with a prayer to wind-up the respondent-Company and appoint the Official Liquidator attached to this Court as the Liquidator of the said Company.
2. It is the case of the petitioner that it is engaged in the business of the supply of different types of Ferrous Casting. During the course of business, the respondent-Company has supplied the necessary raw- material to the petitioner from time to time and the petitioner has used the same and supplied finished goods on conversion basis to the respondent-Company. The Job Work was carried out by the petitioner as per the requirements of the respondent-Company and, accordingly, the goods, S.G.Iron Casting, were delivered to the respondent-Company from time to time. It is stated that according to the petitioner, there is no dispute that Page 3 of 6 HC-NIC Page 3 of 6 Created On Sun Jul 23 15:56:13 IST 2017 O/COMP/436/2015 JUDGMENT the respondent-Company has received the goods and utilized the final product, namely Ferrous Casting, supplied by the petitioner. As per the normal business terms, the petitioner was entitled to raise periodical invoices for the job charges for conversion and the respondent-Company was duty bound to make the payment immediately either by Demand Drafts or Cheques issued at par payable at Ahmedabad in favour of the petitioner on the next day. However, after the petitioner raised invoices for the Job Work and sent them to the respondent-Company, no payment was made by the respondent-Company. The petitioner has time and again requested the respondent-Company to make the payment of the outstanding dues amounting to Rs.6,66,132/-, plus interest. The petitioner has sent a statutory notice to the respondent-Company on 15.07.2015, which has been received by the respondent-Company as per the status of the Postal Department, annexed at running page 39 of the petition. However, the respondent-Company has not given the reply to the said notice nor has it disputed the claim of the petitioner or the quality of the goods supplied. Hence, the petitioner has approached this Court by way of this petition.
3. Notice was issued in the petition on 18.02.2016. On 25.04.2016, this Court has recorded that as per the endorsement on the Board, the respondent has been served but none appeared on its behalf on that day. The same was the position on 15.03.2016 and 05.04.2016. A last opportunity was granted to the respondent-Company in order to appear and defend the petition, failing which the Court would hear the matter on merits and pass an appropriate order. The situation is the same today as, in spite of service of Notice, none has appeared on behalf of the respondent.
4. This Court has heard Mr.Nitin Y.Divate, learned advocate for the petitioner. It is submitted by him that the dues of the petitioner have not been disputed by the respondent-Company and an amount of Rs.6,66,132/- towards the principal amount plus interest is due and outstanding, which amount has not been disputed by the respondent. It is further submitted that no dispute has been raised by the respondent regarding the quality of the goods or the Job Work done by the petitioner. It, therefore, appears that the petitioner is unable to pay the outstanding dues of the petitioner and appears to have lost its financial substratum.
5. This Court has heard learned advocate for the petitioner and perused the averments made in the petition as well as the documents on record.
6. There is nothing on record to indicate that any dispute has been raised by the respondent-Company regarding either the dues of the petitioner or the quality of the goods supplied by the petitioner. In spite of several opportunities, the respondent-Company has not appeared before the Court to defend the petition. Considering the above aspects, this Court would prima-facie consider that the respondent is unable Page 4 of 6 HC-NIC Page 4 of 6 Created On Sun Jul 23 15:56:13 IST 2017 O/COMP/436/2015 JUDGMENT to pay its dues and it could be possible that it has lost its financial substratum.
7. In view of the above, the following order is passed:
The petition is admitted.
The Registry is directed to notify the petition for final hearing on 15.06.2016.
In order to give a last opportunity to the respondent- Company to make the payment of the outstanding dues of the petitioner, the publication of the admission of the petition is deferred till the next date of hearing.
8. If the respondent-Company does not pay the outstanding dues of the petitioner by the next date of hearing, the Court would be constrained to pass an order of publication.
9. The order, whether the Official Liquidator attached to this Court would be required to be appointed as the Provisional Liquidator of the respondent-Company would also be made on the next date of hearing."
6. As stated hereinabove, this Court gave one more chance to the respondent Company, but as no one appeared for and on behalf of the respondent Company, this Court vide order dated 15.06.2016, passed an order of advertisement in two daily newspapers namely "Vadodara Samachar", and "Indian Express".
7. The affidavit dated 19.07.2016 filed by the petitioner Company indicates that the said order is complied with by the petitioner.
8. Learned counsel for the petitioner contended that even though repeated reminders were given and even statutory notice came to be issued to the respondent- Company, the respondent-Company has not made any payment towards outstanding dues. He, therefore, contended that the respondent-Company is not a going concern and is unable to pay its debt and has lost its financial substratum and therefore, this Court may allow the Page 5 of 6 HC-NIC Page 5 of 6 Created On Sun Jul 23 15:56:13 IST 2017 O/COMP/436/2015 JUDGMENT petition and pass the order of winding up of the respondent-Company, as prayed for in the petition.
9. Considering the aforesaid aspect and on examining the record, it clearly transpires that though several reminders were given and even statutory notice has been issued to the respondent-Company, the respondent-Company has neglected to pay the same and has not even responded to the statutory notice issued by the petitioner and therefore, the respondent-Company has lost its financial substratum and it has become commercially insolvent. Hence, it would be just and proper to direct that the respondent-Company be wound up. Accordingly, the respondent-Company "M/s. Mekaster Engineering Ltd., is hereby ordered to be wound up. The Official Liquidator attached to this Court is hereby appointed as Official Liquidator of the respondent-Company and the Official Liquidator is directed to take over the possession of the entire assets of the respondent-Company i.e movable, immovable as well as Bank Accounts etc. The Official Liquidator is further directed to do the needful for winding up of the respondent-Company as provided under the Act and shall submit necessary report before this Court.
The petition is allowed accordingly.
(R.M.CHHAYA, J.) Suchit Page 6 of 6 HC-NIC Page 6 of 6 Created On Sun Jul 23 15:56:13 IST 2017