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Madhya Pradesh High Court

H.R.Construction Pvt.Ltd. vs T.D.M.Infrastructure & Ors. on 24 September, 2014

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                            Company Petition No.9/2004




24.9.2014.
                   Shri Abhishek Arjaria, learned counsel for petitioner.
                   Shri Anshuman Singh, learned counsel for respondents.

Leave is being sought for by the respondents to file return; however, taking into consideration the fact that despite of opportunity granted on 23.7.2014, 4.8.2014 and 19.8.2014, no leave can be granted as the right to file return has been closed vide order dated 8.9.2014.

In view whereof, I.A. No.13069/2014 an application seeking modification of order dated 8.9.2014 stands rejected.

Petitioner claims winding up of respondent-Company under the provisions of Section 433(e), 434 and 439 of the Companies Act, 1956 [for short '1956 Act'] and for appointment of an official liquidator to take possession of the assets of the company.

Relevant facts giving rise for the claim briefly are that respondent no.1, a company registered under the 1956 Act, had entered into a contract with the State of Madhya Pradesh for the purpose of construction of road within geographical boundaries of the State of M.P., one of which being Sagar- Damoh-Jabalpur BOT Road Project.

That, the petitioner and respondent no.1 entered into a contract to carry out Sagar-Damoh-Jabalpur BOT Road Project between Jabalpur and Katangi [chO+000 to CH 40+000(40 Km]. The work included total works including earthworks, widening and strengthening work, WBM Grade 2 and 3 as well as the BT works.

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It is the contention of the petitioner that in pursuance to the issuance of work order the petitioner did certain work and raised a bill for payment of `29,22,244/- on 23.9.2003, of which some payments were released to the tune of `10 lacs yet, the entire bill was not cleared. And, in the meantime, the petitioner incurred loss of `20 lacs because of hot mix plant and other machineries lying idle. On these facts and alleging loss due to negligence of the respondent-company, present company petition has been filed.

Section 433 of 1956 Act envisages the circumstances in which company may be wound up by Tribunal, one of which as enumerated under clause (e) is "if the company is unable to pay its debts". Similarly, sub-section (1) of Section 434 of 1956 Act provides that :-

434. Company when deemed unable to pay its debts.- (1) A company shall be deemed to be unable to pay its debts--

(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding one lakh rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor;

(b) if execution or other process issued on a decree or order of any court or Tribunal in favour of a creditor of the company is returned unsatisfied in :: 3 ::

whole or in part; or

(c) if it is proved to the satisfaction of the Tribunal that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Tribunal shall take into account the contingent and prospective liabilities of the company."

Thus, unless established that a company has incurred a debt that an occasion arises for winding up. A 'debt' is a definite sum coupled with an acknowledgment; in absence whereof, any sum claimed will not ipso facto be a debt as would give rise for an action under Sections 433(e), 434 and 439 of the 1956 Act.

In the case at hand, as borne out from contention that a dispute has arisen in respect of payment under the Contract Agreement JBL/TDM/HRC/07-10/03. And, a demand raised for settlement of dues may give rise for a cause for arbitration or a suit for recovery but the same, in the considered opinion of this Court, cannot be construed as a debt and the inability of the company to pay it as would give rise for a cause under Sections 433(e), 434 and 439 of 1956 Act.

In view whereof, the relief as sought for cannot be granted.

Consequently, petition being devoid of substance, is dismissed. No costs.

                                                   (SANJAY YADAV)
vinod                                                  JUDGE