Bombay High Court
National Small Industries Corporation ... vs Bassein Metals P. Ltd. on 11 October, 2007
Equivalent citations: [2008]143COMPCAS194(BOM)
Author: Anoop V. Mohta
Bench: Anoop V. Mohta
JUDGMENT Anoop V. Mohta, J.
1. The petitioner, a Government of India Enterprise, has invoked the provisions of Sections 433 and 434 of the Companies Act, 1956 (for short, "the Act"), as in spite of the service of statutory notice, the respondent-company failed to make the payment of Rs. 3,68,29,634.91 (rupees three crores sixty eight lakhs twenty nine thousand six hundred thirty four and ninety one paise only), amount due and payable with interest up to June 30, 2001. Therefore, present winding up petition dated August 2, 2001.
2. On November 9, 1992, the respondent-company entered into an agreement with the petitioner by availing Raw Material Assistant Scheme, for which assistance in the form of finance was to be made by the petitioner on parties introduced by the respondent-company.
3. An undertaking and a personal guarantee is executed by the respondent-company. The respondent-company had been availing of financial assistance. In response to the payment due some time in the year 1998 two cheques were issued in favour of the petitioner for a sum of Rs. 90,00,000 (rupees ninety lakhs only) and Rs. 1,77,80,849 (rupees one crore seventy seven lakhs eighty thousand eight hundred and forty nine only). Both are dishonoured. The proceedings under Section 138 of the Negotiable Instruments Act, 1881, are pending.
4. On October 21, 1999, the petitioner again called upon the respondent-company to make the payment. On March 31, 1999, a demand promissory note has been executed by the respondent in favour of the petitioner for a sum of Rs. 2,83,70,700.91 (rupees two crores eighty three lakhs seventy thousand seven hundred and ninety one paise only).
On July 3, 2001, the petitioner invoked the DP Note by winding up notice to call upon within 21 days. The respondent by reply dated July 4, 2001, asked for inspection of various documents and simply denied the payment and liability. There is no explanation whatsoever, raised and made in the reply. The fact remains on the date of petition that the respondent-company failed to make the payment, therefore, the present company petition.
5. The respondent-company resisted the petition by reply dated March 28, 2002. The petitioner by rejoinder dated April 4, 2002, reiterated the stand and the case as raised.
6. On April 19, 2002, as the facilities which were extended to the respondent by the petitioner-Corporation and as the respondent admittedly signed demand promissory note at the time of each supply of raw material, and as no payment has been made by the respondents, even under the letter of credit, the liability to make the payment remained unpaid. The primary responsibility of the respondent-company to make the payment in the facts and circumstances of the case, the respondent-company was not in a position to pay or deposit this amount and as the defence put up by the respondent first time in the reply in no way was said to be bona fide or substantial and therefore, admitted the petition. It was advertised accordingly. Affidavit of publication is the part of the record. The respondent waived the services.
7. After considering the material placed on record and as there is no change in the circumstances the fact remains till this date in view of the above admitted position, the respondent-company failed to make the payment and the averments therefore, has remained substantiated and as the respondent-company though raised defence which cannot be bona fide and without material, therefore the fact of non-payment and no capacity to make the payment and therefore, there is a sufficient cause made out by the petitioner for winding up of the respondent-company.
8. The authorities as cited by learned Counsel appearing for the respondents are totally distinct and distinguishable on the facts itself. The allegations of fraud against the petitioner though raised, just cannot be reiterated first time in the present proceedings. The defence so raised, in any way does not appear to be a bona fide and reasonable one and basically when the petitioner is a Government undertaking and since 1992 till this date requesting the respondent-company to make the payment. There was no such allegations of fraud raised at earlier point of time. On the contrary, except simple denial there was no positive case made with supporting material to substantiate their defence at any point of time.
9. In view of this, considering the amount involved and the fact that there is no payment made, which was claimed within limitation, I am inclined to grant the prayer clauses (a) and (b). However, the liberty is granted to the respondent-company to settle the matter within two months, failing which this order will take effect forthwith.
10. Certified copy is expedited.