Punjab-Haryana High Court
D.C.M. Financial Services Ltd. vs Prithipal Singh Construction Co. on 16 December, 1999
Author: Swatanter Kumar
Bench: Swatanter Kumar
JUDGMENT Swatanter Kumar, J.
1. 1. D.C.M. Financial Services Ltd. (petitioner-company) has filed the present petition under Sections 433(e), 434(1)(a) and 439 of the Companies Act, 1956 ('the Act') praying for ordering the winding up against Prithipal Singh Construction Co. ('the respondent-company) and for appointment of the official liquidator as liquidator of the respondent-company.
2. The respondent-company is stated to have approached the petitioner-company as it was desirous of taking on hire an equipment, plant and machinery, i.e., Escorts Daewoo Excavator Model Solar 220LC-III. The equipment costs nearly Rs. 37,00,000. The parties held meeting, negotiated and thereafter, it was agreed that the petitioner-company will accede to the request of the respondent-company and would provide the said equipment on hire-purchase basis, vide invoice dated 10-7-1996, Annexure P-5 to the petition. The said equipment was purchased and given on hire-purchase agreement to the respondent-company. The hire-purchase agreement was entered into on 11-7-1996, vide Annexure P-6. The hire-purchase charges were to be paid in instalment and as per the terms and conditions contained in the hire-purchase agreement, rate of interest, default clause, etc., were also specified therein. It is stated in the petition that the respondent-company failed to maintain the financial discipline of payment and post-dated cheques issued by the respondent-company were dishonoured on presentation. Despite notice, payments were not made. As per the books and account of the petitioner-company, a sum of Rs. 15,01,017 was due as on 30-11-1998. A registered notice dated 12-12-1998 was served upon the respondent-company to satisfy the requirement of the statutory notice prescribed under Section 433 of the Act. Despite notice, no payment was made, thus, resulting in the filing of the present petition.
3. Notice to show-cause why petition be not admitted was issued vide order dated 4-6-1999. Despite service of the notice, nobody appeared on behalf of the respondent-company on 6-8-1999 and the case was adjourned to 20-8-1999. On 20-8-1999, the court passed the following order:
This is a petition filed under Section 433 read with Sections 434 and 439 for winding up of the respondent-company (Prithipal Singh Construction Company Pvt. Ltd., Mohali). It is claimed that the respondent-company is not in a position to pay debt amounting to Rs. 16,32,098.
4. Notice of the petition had been issued on 6-8-1999, this Court recorded that the respondents are served but there was no appearance on their behalf. The position once again is the same. In the absence of any appearance, it is deemed that the assertions claimed are not disputed. The petition is admitted. It be published in the Indian Express (Chandigarh Edition) and Dainik Tribune and also in the Punjab Government Gazette. However, it is made clear that if there is any creditor, he should move this Court before the next date of hearing.
List it on 8-10-1999.
After publication in terms of the above order, the case was listed on 8-10-1999. Again nobody appeared on behalf of the respondent-company and the case was adjourned to 19-11-1999, when the arguments were heard.
5. As is clear from the above facts, that the petition of the petitioner-company is based upon documentary evidence, besides hire-purchase agreement, Annexure P-6 executed between the parties and the dishonor of cheques. It was for the respondent-company to appear before the court and show that it had a bona fide defence to the petition. The company failed to appear and contest the petition before admission and even now nobody appeared on behalf of the respondent-company. The only noticeable point which appears from the record is, whether arbitration agreement (clause 10.11) contained in the hire-purchase agreement and the jurisdiction being vested in the court at Calcutta under clause 10.12 can operate as a bar to the allowing of present petition or not ? Both the above-said clauses are no more res integra and stand fully settled. A Division Bench of this Court in the case of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [1999] 97 Comp. Cas. 675 (P & H), has already held that an arbitration clause does not ipso facto oust the jurisdiction of competent court to entertain and decide the company petition. Furthermore, there is nothing on record to show that the registered office of the respondent-company is situated beyond the jurisdiction of this Court. The petitioner-company has specifically contended that the registered office of the respondent-company is situated at 2076, Phase-7, S.A.S. Nagar, Mohali District, Ropar, Punjab, as such, this Court also would have the territorial jurisdiction to entertain and decide the present petition.
For the aforestated reason, I have no hesitation in allowing this petition finally and order the winding up of the respondent-company.
6. Consequently, the present company petition is allowed. The respondent-company is ordered to be wound up in accordance with law. The official liquidator attached to this Court is hereby appointed the official liquidator of the respondent-company. He shall take over the books of account, assets, properties of the company forthwith.
7. The order of winding up would be published in Indian Express, Dainik Tribune and the Official Gazette of the State of Punjab in accordance with law.