Emecon Controls Pvt Ltd vs.m/s Psa Nitrogen Limited & Ors - Court Judgment

SooperKanoon Citationsooperkanoon.com/1213585
CourtDelhi High Court
Decided OnMar-15-2018
AppellantEmecon Controls Pvt Ltd
RespondentM/S Psa Nitrogen Limited & Ors
Excerpt:
$~cp-72 in the high court of delhi at new delhi * % date of decision:15. 03.2018 + co.pet. 198/2013 emecon controls pvt ltd m/s psa nitrogen limited & ors through mr.vibhor garg, adv. versus ........ petitioner ..... respondent through mr.vikas agarwal, ms.shruti pande and mr.amit, advs. coram: hon'ble mr. justice jayant nath jayant nath, j.(oral) 1. this petition is filed for winding up under section 433(e) and 434(1)(a) & (c) of the companies act, 1956 seeking winding up of the respondent company. the case of the petitioner is that the respondent company placed various purchase orders with the petitioner company for the purchase of pressure transmitters, flow transmitters etc. which were duly received by them to their satisfaction on different occasions.... petitioner also points out to three invoices dated 16.08.2012, 10.09.2012 and 11.09.2012 respectively totalling rs.3,10,467/- payment of which has not been made by the respondents. reliance is also placed on various e-mails including the email dated 28.09.2012 where the respondents have admitted that they would clear the outstanding payments in favour of the petitioner co.pet.198/2013 page 1 company. further, to show their bona fide a copy of an unsigned cheque of rs.1,94,959/- was attached with the said e-mail as a part payment for the invoices raised by the petitioner company and an assurance was given that the said cheque will be signed once the authorised signatory resumes his office. it is also pleaded that the respondents have not supplied c-forms to the petitioner for the invoice issued in the year 2011-12 and 2012-13.2. the respondents have filed their reply. in the reply various defences have been taken. the respondents does not deny that the petitioner company supplied goods in respect of the bills mentioned, however, it is stated that the goods were not supplied according to the satisfaction of the respondent company and there were manufacturing defects. it is also stated that there is a dispute regarding the prices charged by the petitioner company. it is further pleaded that unsigned cheque was not sent in view of the manufacturing defect in the material supplied and difference in the rate charged. regarding c-form it is the case of the respondents that they never refused to supply the c-forms.3. i have heard learned counsel for the parties. learned counsel for the petitioner has stressed that there are clear admissions on record to show that the respondents have not paid a sum of rs.3,10,467/- and has not supplied the c-forms. he, however, points out that pursuant to a contempt petition filed by the petitioner the respondents had paid a sum of rs.2 lacs plus it also supplied the c- forms for the year 2011-12. he submits that now there is a balance of rs.1,10,467/- which remains unpaid from the principle amount co.pet.198/2013 page 2 and in addition he submits that the c-forms for the year 2012-13 have not been supplied on account of which the petitioner company has already incurred tax and interest liability of rs.1,08,000/- which the respondents are now liable to pay. he relies upon the application filed by the respondent company being ca18402016 where he points out that the photocopies of the c-forms have been placed on record and the originals have not been supplied to the petitioner. he also pleads that photocopies are incomplete as the copy of the back side of the c-form has not been supplied which contain details of the invoices which were supplied.4. learned counsel for the respondents has reiterated the contentions of the reply. he has pointed out that even in the invoices which were filed by the petitioner specially the invoice no.01.94 dated 10.9.2012 the respondents have noted that the material has been received but a cable and two indicators have not been received and will be delivered on the next day. he has also stressed that the rates were never agreed upon. he submits that there was an admission on the part of the respondents that a sum of rs.1,94,959/- was due and payable and hence a sum of rs.2 lac has been paid to the petitioner. on c-forms he has taken the same defence.5. in a petition for winding up in case a debt is due under section 433(e) of the companies act a company is liable to be would up when it is unable to pay its debts. the settled legal position is that the debts on the face of the record should be payable by the respondent company. where the respondent company raises a bona fide dispute no winding up petition would lie. the court has not to dwell deep co.pet.198/2013 page 3 into the facts and adjudicate and come to a conclusion that an amount is due and payable to the petitioner. it is not the function of the company court to enter into an adjudication of disputed facts which should have been the subject matter of a civil suit/court. reference in this context may be had to the judgement of the supreme court in iba health (i) pvt. ltd. vs. info-drive systems sdn.bhd., (2010) (4) complj481(sc) where the supreme court held as follows:-"spurious, speculative, fide and not “17. the question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding-up for discharge of that liability?. in such a situation, is there not a duty on the company court to examine whether the company has a genuine dispute to the claimed debt?. a dispute would be substantial and genuine if it is bona illusory or misconceived. the company court, at that stage, is not expected to hold a full trial of the matter. it must decide whether the grounds appear to be substantial. the grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. it is settled law that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding-up procedure. the company court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding-up petition as a means of forcing the company to pay a bona fide disputed debt.” a division bench of the allahabad high court in ultimate advertising and marketing vs g.b. laboratories ltd., kanpur, air1998aii320 held as follows:-"co.pet.198/2013 page 4 “7. in case the debt is admitted or liability to pay is not denied, there is no difficulty and the company judge can pass suitable order for winding up of the respondent company if such company fails to pay the amount. the difficulty arises when the claim is disputed by the respondent-company. the company judge in that situation has to examine whether the dispute is boanfide or it is only a pretext to deny its liability. if the learned judge finds that there is a boan fide dispute, it will not relegate itself to a court adjudicating the rights of the parties as in a regular suit. hence, where there is a bona fide dispute it is not for the company court to adjudicate the rights of the parties as in a regular suit.6. in the present case there are two surviving aspects on which the winding up petition has been filed. one is pending claim for a sum of rs.1,10,467/- and the second is the outstanding c-forms for the year 2011-12.7. as far as the c-forms are concerned, there is a clear admission in the reply filed by the respondents that the c-forms are due. in paragraph 6 and 7 of the reply the respondent states as follows:-"“6.1 say in reply to para no.6 that the respondent are ready to supply the due c forms. the respondent are therefore not liable to pay any tax liability. 7.1 say that the para no 7 of the petition is wrong as stated . the respondent never refused to supply the c forms . the claim for the payment was disputed .8. in the light of this clear admission on the part of the respondents the c-forms were liable to be delivered to the co.pet.198/2013 page 5 respondents for which no steps have been taken by the respondent. this is despite orders having been passed by this court on 3.3.2014 where this court had noted the submission of the respondents that if the c-forms are liable to be given by the respondents the same shall be done. on 13.5.2014 a direction was passed by this court directing the respondents to comply with the earlier order dated 3.3.2014 and pay to the petitioner the agreed sum of rs.2 lacs in addition to the c- forms.9. these orders have not been challenged. no doubt the respondents have paid a sum of rs. 2 lakh to the petitioner. the complete c- forms, however, have still not been delivered. the petitioner now states that in nov, 2017 appropriate assessment has been completed and the petitioner company has been fastened with a liability of rs. 1,08,000/- on account of non-filing of the c-forms. accordingly, in my opinion, the respondents remains liable to pay a sum of rs.1,08,000/- on account of non-supply of c-forms to the petitioner for the period 2012-13.10. learned counsel for the respondents has strongly disputed this liability of rs.1,08,000/- saying that he challenges this stated liability. i see no merit in the plea. despite several orders of this court the respondent has failed to supply the said c-forms. alongwith ca18402013 the respondent had also placed on record photocopies of c-forms. despite this, the original c-forms have not been handed over to the petitioner . consequent liability would obviously will fall on the respondent.11. coming to the next claim of the petitioner, namely, a claim for co.pet.198/2013 page 6 a sum of rs.1,10,467/- on account of goods supplied. i may note that on 27.3.2017 learned counsel for the respondent had offered to deposit a sum of rs.1,10,000/- without prejudice to their rights and contentions by way of a pay order in favour of the registrar general of this court. the said amount stands deposited.12. as far as the claim for the sum of rs.1,10,467/- is concerned, in my opinion, the respondent has raised a bona fide dispute. there are no clear evidence on record which would warrant an inference that the respondent company is unable to pay a debt due.13. learned counsel for the petitioner has vehemently stated that all the invoices are admitted. the respondent’s purchase orders are also on record. he also pleads that the delivery challans and delivery acknowledgments are also on record. based on these facts he pleads that the respondents are liable to pay the amount for the five invoices and has wrongly only made a rough payment of three invoices of rs.2 lacs and have not made the payment of the last two bills which is roughly rs.1,10,467/-.14. the respondents have disputed the liability saying that some of the goods were not delivered as noted in one of the delivery challans. it has also been pleaded that the rates have never been finalised as is sought to be claimed in the invoices. on the face of the facts on record, it is not possible to conclude that any debt is due to the petitioner. in my opinion the debt is bonafidely disputed by the respondent. it is settled legal position there where is a genuine dispute on the debt claimed no winding up petition would lie. a company court retains discretion and is not expected to co.pet.198/2013 page 7 hold a full trial of the matter. in the facts of this case in my opinion the present winding up petition for the claim of rs.1,10,0000 would not lie.15. i accordingly, in the interest of justice, direct that on the petitioner filing an affidavit stating that on account of the assessment by the statutory authorities, a liability of rs, 1,08,000/- has been imposed on the petitioner due to non receipt of c-form which the respondent was to supply, the sum of rs.1,10,000/- deposited in court by the respondent be released alongwith accumulated interest to the petitioner which will be in full and final settlement of the dues claimed on account of non-receipt of the c-forms. needless to add it would be open to the petitioner to take steps in a civil court as per law if according to the petitioner some amount is still due and payable.16. petition accordingly stands disposed of. all pending applications, if any, also stand disposed of. march15 2018 n jayant nath, j co.pet.198/2013 page 8
Judgment:

$~CP-72 IN THE HIGH COURT OF DELHI AT NEW DELHI * % Date of decision:

15. 03.2018 + CO.PET. 198/2013 EMECON CONTROLS PVT LTD M/S PSA NITROGEN LIMITED & ORS Through Mr.Vibhor Garg, Adv. versus ........ Petitioner

..... Respondent Through Mr.Vikas Agarwal, Ms.Shruti Pande and Mr.Amit, Advs. CORAM: HON'BLE MR. JUSTICE JAYANT NATH JAYANT NATH, J.

(ORAL) 1. This petition is filed for winding up under section 433(e) and 434(1)(a) & (c) of The Companies Act, 1956 seeking winding up of the respondent company. The case of the petitioner is that the respondent company placed various Purchase Orders with the petitioner company for the purchase of Pressure Transmitters, Flow Transmitters etc. which were duly received by them to their satisfaction on different occasions.... Petitioner

also points out to three invoices dated 16.08.2012, 10.09.2012 and 11.09.2012 respectively totalling Rs.3,10,467/- payment of which has not been made by the respondents. Reliance is also placed on various e-mails including the email dated 28.09.2012 where the respondents have admitted that they would clear the outstanding payments in favour of the petitioner Co.Pet.198/2013 Page 1 company. Further, to show their bona fide a copy of an unsigned cheque of Rs.1,94,959/- was attached with the said e-mail as a part payment for the invoices raised by the petitioner company and an assurance was given that the said cheque will be signed once the authorised signatory resumes his office. It is also pleaded that the respondents have not supplied C-Forms to the petitioner for the invoice issued in the year 2011-12 and 2012-13.

2. The respondents have filed their reply. In the reply various defences have been taken. The respondents does not deny that the petitioner company supplied goods in respect of the bills mentioned, However, it is stated that the goods were not supplied according to the satisfaction of the respondent company and there were manufacturing defects. It is also stated that there is a dispute regarding the prices charged by the petitioner company. It is further pleaded that unsigned cheque was not sent in view of the manufacturing defect in the material supplied and difference in the rate charged. Regarding C-Form it is the case of the respondents that they never refused to supply the C-Forms.

3. I have heard learned counsel for the parties. Learned counsel for the petitioner has stressed that there are clear admissions on record to show that the respondents have not paid a sum of Rs.3,10,467/- and has not supplied the C-Forms. He, however, points out that pursuant to a contempt petition filed by the petitioner the respondents had paid a sum of Rs.2 lacs plus it also supplied the C- Forms for the year 2011-12. He submits that now there is a balance of Rs.1,10,467/- which remains unpaid from the principle amount Co.Pet.198/2013 Page 2 and in addition he submits that the C-Forms for the year 2012-13 have not been supplied on account of which the petitioner company has already incurred tax and interest liability of Rs.1,08,000/- which the respondents are now liable to pay. He relies upon the application filed by the respondent company being CA18402016 where he points out that the photocopies of the C-Forms have been placed on record and the originals have not been supplied to the petitioner. He also pleads that photocopies are incomplete as the copy of the back side of the C-Form has not been supplied which contain details of the invoices which were supplied.

4. Learned counsel for the respondents has reiterated the contentions of the reply. He has pointed out that even in the invoices which were filed by the petitioner specially the invoice No.01.94 dated 10.9.2012 the respondents have noted that the material has been received but a cable and two indicators have not been received and will be delivered on the next day. He has also stressed that the rates were never agreed upon. He submits that there was an admission on the part of the respondents that a sum of Rs.1,94,959/- was due and payable and hence a sum of Rs.2 lac has been paid to the petitioner. On C-Forms he has taken the same defence.

5. In a petition for winding up in case a debt is due under section 433(e) of the Companies Act a company is liable to be would up when it is unable to pay its debts. The settled legal position is that the debts on the face of the record should be payable by the respondent company. Where the respondent company raises a bona fide dispute no winding up petition would lie. The Court has not to dwell deep Co.Pet.198/2013 Page 3 into the facts and adjudicate and come to a conclusion that an amount is due and payable to the petitioner. It is not the function of the Company Court to enter into an adjudication of disputed facts which should have been the subject matter of a Civil Suit/Court. Reference in this context may be had to the judgement of the Supreme Court in IBA Health (I) Pvt. Ltd. vs. Info-Drive Systems Sdn.Bhd., (2010) (4) CompLJ481(SC) where the Supreme Court held as follows:-

"spurious, speculative, fide and not “17. The question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding-up for discharge of that liability?. In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt?. A dispute would be substantial and genuine if it is bona illusory or misconceived. The Company Court, at that stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. It is settled law that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding-up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding-up petition as a means of forcing the company to pay a bona fide disputed debt.” A Division Bench of the Allahabad High Court in Ultimate Advertising and Marketing Vs G.B. Laboratories Ltd., Kanpur, AIR1998AII320 held as follows:-

"Co.Pet.198/2013 Page 4 “7. In case the debt is admitted or liability to pay is not denied, there is no difficulty and the Company Judge can pass suitable order for winding up of the respondent company if such company fails to pay the amount. The difficulty arises when the claim is disputed by the respondent-company. The Company Judge in that situation has to examine whether the dispute is boanfide or it is only a pretext to deny its liability. If the learned Judge finds that there is a boan fide dispute, it will not relegate Itself to a Court adjudicating the rights of the parties as in a regular suit. Hence, where there is a bona fide dispute it is not for the company court to adjudicate the rights of the parties as in a regular suit.

6. In the present case there are two surviving aspects on which the winding up petition has been filed. One is pending claim for a sum of Rs.1,10,467/- and the second is the outstanding C-Forms for the year 2011-12.

7. As far as the C-Forms are concerned, there is a clear admission in the reply filed by the respondents that the C-Forms are due. In paragraph 6 and 7 of the reply the respondent states as follows:-

"“6.1 say in reply to para no.6 that the respondent are ready to supply the due C Forms. The respondent are therefore not liable to pay any tax liability. 7.1 say that the para no 7 of the petition is wrong as stated . The respondent never refused to supply the C forms . The claim for the payment was disputed .

8. In the light of this clear admission on the part of the respondents the C-Forms were liable to be delivered to the Co.Pet.198/2013 Page 5 respondents for which no steps have been taken by the respondent. This is despite orders having been passed by this Court on 3.3.2014 where this court had noted the submission of the respondents that if the C-Forms are liable to be given by the respondents the same shall be done. On 13.5.2014 a direction was passed by this court directing the respondents to comply with the earlier order dated 3.3.2014 and pay to the petitioner the agreed sum of Rs.2 lacs in addition to the C- Forms.

9. These orders have not been challenged. No doubt the respondents have paid a sum of Rs. 2 Lakh to the petitioner. The complete C- Forms, however, have still not been delivered. The petitioner now states that in Nov, 2017 appropriate assessment has been completed and the petitioner company has been fastened with a liability of Rs. 1,08,000/- on account of non-filing of the C-forms. Accordingly, in my opinion, the respondents remains liable to pay a sum of Rs.1,08,000/- on account of non-supply of C-Forms to the petitioner for the period 2012-13.

10. Learned counsel for the respondents has strongly disputed this liability of Rs.1,08,000/- saying that he challenges this stated liability. I see no merit in the plea. Despite several orders of this court the respondent has failed to supply the said C-Forms. Alongwith CA18402013 the respondent had also placed on record photocopies of C-Forms. Despite this, the original C-Forms have not been handed over to the petitioner . Consequent liability would obviously will fall on the respondent.

11. Coming to the next claim of the petitioner, namely, a claim for Co.Pet.198/2013 Page 6 a sum of Rs.1,10,467/- on account of goods supplied. I may note that on 27.3.2017 learned counsel for the respondent had offered to deposit a sum of Rs.1,10,000/- without prejudice to their rights and contentions by way of a pay order in favour of the Registrar General of this Court. The said amount stands deposited.

12. As far as the claim for the sum of Rs.1,10,467/- is concerned, in my opinion, the respondent has raised a bona fide dispute. There are no clear evidence on record which would warrant an inference that the respondent company is unable to pay a debt due.

13. Learned counsel for the petitioner has vehemently stated that all the invoices are admitted. The respondent’s purchase orders are also on record. He also pleads that the delivery challans and delivery acknowledgments are also on record. Based on these facts he pleads that the respondents are liable to pay the amount for the five invoices and has wrongly only made a rough payment of three invoices of Rs.2 lacs and have not made the payment of the last two bills which is roughly Rs.1,10,467/-.

14. The respondents have disputed the liability saying that some of the goods were not delivered as noted in one of the delivery challans. It has also been pleaded that the rates have never been finalised as is sought to be claimed in the invoices. On the face of the facts on record, it is not possible to conclude that any debt is due to the petitioner. In my opinion the debt is bonafidely disputed by the respondent. It is settled legal position there where is a genuine dispute on the debt claimed no winding up petition would lie. A Company Court retains discretion and is not expected to Co.Pet.198/2013 Page 7 hold a full trial of the matter. In the facts of this case in my opinion the present winding up petition for the claim of Rs.1,10,0000 would not lie.

15. I accordingly, in the interest of justice, direct that on the petitioner filing an affidavit stating that on account of the assessment by the statutory authorities, a liability of Rs, 1,08,000/- has been imposed on the petitioner due to non receipt of C-form which the respondent was to supply, the sum of Rs.1,10,000/- deposited in court by the Respondent be released alongwith accumulated interest to the petitioner which will be in full and final settlement of the dues claimed on account of non-receipt of the C-Forms. Needless to add it would be open to the petitioner to take steps in a civil court as per law if according to the petitioner some amount is still due and payable.

16. Petition accordingly stands disposed of. All pending applications, if any, also stand disposed of. MARCH15 2018 n JAYANT NATH, J Co.Pet.198/2013 Page 8