Madhya Pradesh High Court
M/S Airen Associates vs H.E.G. Ltd. on 18 January, 2018
THE HIGH COURT OF MADHYA PRADESH
COMP-13-1999
sh
(M/S AIREN ASSOCIATES Vs H.E.G. LTD.)
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Jabalpur, Dated : 18-01-2018
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In this company petition filed under Sections 433, 434 and 439
Pr
of Companies Act, 1956, the petitioners have prayed for a
direction for winding up of respondent-company so that the
a hy petitionersâ debts/dues can be satisfied.
2. The admitted facts between the parties are that the ad petitioners and respondent entered into an agreement dated M 28.09.1995 (Annexure-P/IV). The case of the petitioners is that the petitioners completed the entire work as per the agreement of and, therefore, the certificate dated 27.06.1997 (Annexure-P/V) rt was issued by HEG Limited. This certificate makes it clear that ou the entire work has been completed.
3. Shri Awasthi, learned counsel for the petitioners submits C that although work was completed, the respondents made h partial payment out of the complete amount. Aggrieved, the ig petitioners sent a legal notice dated 27.11.1998 (Annexure- H P/VII) asking the other side to make the complete payment of debts/dues to the petitioners. The petitioners placed reliance on the reply dated 24.12.1998 (Annexure-P/VIII) and contended that Para 8 to 11 of company petition shows as to how debt is due in favour of the petitioners and respondent is bound to pay the same. It is submitted that the word âdebtâ should be given a wide meaning in view of the Full Bench Judgment of this Court in Company Petition No.10/2015 (Jonathan Allen Vs. Zoom Developers Private Limited) decided on 24.08.2015.
4. Shri Awasthi, learned counsel for the petitioners further contended that a specific averments of Para 8 to 11 were not satisfactorily refuted by the other side and same is the case sh with the averments of legal notice 27.11.1998 (Annexure-P/VII). Hence, it is a case of deemed admission of claim of petitioner e ad on the part of the respondents. Lastly, by taking this Court to Sections 433 (e) and 434 of the Companies Act, it is contended Pr that it is a fit case for issuing necessary directions for winding a up of the respondent-company in order to settle the claims of hy the present petitioners.
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5. Per contra, the stand of the company is that the certificate dated 27.06.1997 was issued to the petitioners on their request M as the petitioners wanted to show their credentials elsewhere.
of A careful reading of this certificate shows that certificate of completion was regarding major building and major foundation rt and the said certificate nowhere certifies that the entire work ou was completed. The certificate was issued with the recital âto C whomsoever it may concernâ. The completion certificate as h per the procedure prevailing are issued in the name of ig Contractor specifically. Thus, the said certificate, by no stretch H of imagination, can be said to be the completion certificate certifying completion of entire work.
6. Shri Aditya Adhikari, learned Senior Advocate for the respondent drew the attention of this Court on the reply to the notice dated 24.12.1998 (Annexure-P/VIII) and read out Para 6 of the additional return in which averments of Para 7 & 8 of the return have been refuted. Learned senior counsel submits that the final bill was submitted on 26.06.1997. This is a matter of common knowledge that final bill so submitted by the Contractor requires examination at various levels and it takes time. Thus, on the next date i.e. 27.06..1997, it could not have been certified that the entire work has been completed. He sh further submits that the amount of Rs.2,23,55,486.27 was paid to the petitioners on 30.07.1998. The petitioners accepted the e ad said amount without any protest/objection or demur. Thus, later on, they cannot turn around and claim that some amount is still Pr due. More so, when the document on which heavy reliance is a placed in Para 8 of the petition does not support the claim of hy the petitioners.
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7. Lastly, it is submitted that in view of diametrically opposite stand taken by the parties in their respective legal notices, it is M clear that there exists a factual dispute and the dispute relating of to claim of amount for which arbitration is the appropriate remedy. The agreement contains an arbitration clause and rt interestingly the petitioners themselves sent a letter which is ou reflected in Para 5 of the reply dated 27.11.1998. The C petitioners themselves claimed for appointment of an Arbitrator h vide their letter dated 31.08.1998. In nutshell, it is submitted ig that this matter is not tenable under the various provisions of H the Companies Act.
8. No other point is pressed by learned counsel for the parties.
9. I have heard learned counsel for the parties and perused the record.
10. The entire claim of the petitioners is based on the pleadings in Para 8 of the petition. The said pleadings are denied by other side. It is apposite to examine those pleadings in juxtaposition and accordingly the same are reproduced in the shape of a chart, which reads as under:
Para 8 of the petition Reply to Para 7 & 8 in additional return Denied. It is submitted that there were several disputes with regards to the billing made by the petitioner with regard to the construction work. The certificate dated 27.06.1997 (Annexure-P/5) is not a completion certificate sh of the project. It is a letter issued at the request of the petitioner as he wanted to show his credentials elsewhere.
The so-called certificate of completion states that all major buildings and major foundation was completed in e record time but does nowhere says that the entire work was completed. Thus, for this reason also it cannot be ad treated as a completion certificate as claimed by the petitioner.
There is another reason why this certificate cannot be a Pr completion certificate of the contract because it contains the recital âTo whomsoever it may concernâ. Completion certificate are always issued in the name of the contractor, specifically.
Therefor, such a certificate cannot be treated as a a completion certificate at all. A commendation certificate addressed to whomsoever it may concern can never be hy construed as a completion certificate. In civil contracts, completion is always subject of measurements being carried out by the principles. The th terms of the LOI dated 5 May 1995 are very clear in this ad regard. Reference is made to clause 2. It contains two parts. The fixed price is Rs.1,86,82,805=00 and the variable price is subject to evaluation. M It is submitted that on 27.06.1997, when the letter was issued at the request of the petitioner, there was no evaluation of the works which were a part of the tender. The final bill was submitted on 26.06.1997, as per the petitioner, and the work could not have been evaluated in of The petitioners thereafter, after completion of the scheduled work, 1 day. Thus, the letter dated 27.06.1997 is not a letter of regularly submitted the running bills and amounts were released by the completion and the reliance placed by the petitioner on it respondents from time to time, though each time several reminders were is totally misplaced.
required before the payment was forthcoming and even till date not all the The letter dated 30th July 1998 is not a letter sanctioning a rt amount recoverable under the running bills have been recovered fully. The sum of Rs.2,51,05,452=57 as alleged by the petitioner, as petitioner on 26th June, 1997 raised a final bill amounting to the letter does not define any amount to prove that the Rs.2,51,06,349.12 towards the work done pursuant to the said agreement.
ou approved amount by HEG is either of Rs.2,23,55,486=27 The respondents on 30.07.1998 passed the final bill after 13 months, or Rs.2,51,05,452=57 or something else. Thus, there was amounting to Rs.2,51,06,349.12. Out of the said total amount only an no admitted or passed amount of Rs.2,51,05,452=57 as amount of Rs.2,23,55,486.27 has been recovered and an amount of claimed by the petitioner.
Rs.42,45,873.74 (which is inclusive of the amount due towards the final bill C In fact, the amount of Rs.2,23,55,486=27 is the amount dated 30.07.1998 and amount withheld on account of security deposit and which has already been paid to the petitioner. The performance guarantee) is still due payable by the respondents to the petitionerâs claim of Rs.2,51,05,452=57 is untenable. petitioner firm. A copy of the final bill dated 30.07.1998 is marked and Any other amount (s) claimed by the petitionerâs are h enclosed here as Annexre-P/6.
disputed amounts.
The intention of the petitioner is malafied, which can be ig substantiated by the fact that the payment already made, receipted and acknowledged by him is Rs.2,23,55,486= 27 together with what is now being claimed by him as H unpaid Rs.42,43,873=74 comes to Rs.2,65,99.360=01, which is much above the so called claim gross bill amount of Rs.2,51,05,452=57, which in any case is not admitted by the answering respondent. Also, the net amount payable to any contractor is subject to statutory deductions on account of taxes mandated by law. It is specifically submitted that the petitioner is not entitled to any amounts that have been withheld on account of security deposit and performance guarantee and same is due to the fact that the petitioner only did incomplete work. Also, the petitioner did not intentionally submit the performance guarantee (as stipulated in the LOI terms) as the respondents raised concerns on quality of work done and also non-completion/execution of total contract. The withholding of the aforesaid amount is in terms of the LOI.
Thus it is humbly submitted that there is no amount of Rs.42,43,873.74 outstanding as claimed by the petitioner. The amount of Rs.2,51,06,349=12 claimed by the petitioner on the basis of an unsigned document referring to letter No.4499 is erroneous. As stated above, the amounts of the appended bill to the letter No.4499 were different and were subject to discussion on 3.08.1998 and could have only been finalized after taking into account the discount and other deductions, which was never settled. The payment of Rs.2,23,55,486=27 was accepted by the petitioner without any demur or protest.
11. A careful and comparative reading of the pleadings of the parties in relation to the claim shows that the parties are at sh loggerheads on the question of quantification of amount. The petitionersâ contention in Para 8 is that the final bill is e ad amounting to Rs.2,51,06,349.12 out of which the respondents have paid Rs.2,23,55,486.27. Thus as per Annexure-P/6 i.e. final Pr bill, the remaining amount i.e. Rs.42,45,873.74 is due. During a the course of argument, on repeated query from the Bench, hy learned counsel for the petitioners is unable to show as to how ad the said amount is quantified, derived and worked out in Para 8 of the petition on the basis of alleged final bill (Annexure-P/VI).
M At the cost of repetition, the petitioners could not substantiate of the said claim of Rs.42,45,873.74 on the basis of documentary evidence (final bill) dated 30.07.1998. The respondents in their rt reply to legal notice and in their additional return have ou categorically denied the said claim. In view of the fact that the C petitioner could not substantiate the claim and claim is h categorically denied, the question of any deemed admission by ig the respondent does not arise. Shri Awasthi although raised a H legal issue whether such non-payment arising out of final bill will fall within the ambit of âdebtsâ or not, in this case, I am not inclined to deal with this question because the petitioners have failed to establish that any such claim is either admitted or flowing from final bill. Thus, this question will remain open to be decided in appropriate case. Since the petitioners have miserably failed to establish that any debt was payable, Section 433 (3) is not attracted.
12. In view of the aforesaid, this company petition cannot be entertained. However, this order will not come in the way of the petitioners to avail any other remedy including the remedy of arbitration (if available) in accordance with law. The sh company petition is devoid of substance and is hereby dismissed with aforesaid observations.
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(SUJOY PAUL)
Pr JUDGE
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Biswal
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Digitally signed by SHIBA NARAYAN
BISWAL
Date: 2018.01.19 16:10:50 +05'30' rt ou C h ig H