Gkw Limited Vs. Nepc India Limited - Court Judgment

Excerpt:
- labour & services part time employee: [tarun chatterjee & h.s. bedi, jj] employee employed on part-time basis but under control and supervision of employer is a workman. he would be entitled to benefit of continuous service under section 25 and protection of section 25-f of i.d. act, 1947. a.c. arumugaperumal adityan, j.1. this appeal had arisen out of the order in c.p. no. 372 of 1997 on the file of the original side of this court. the appellant is the petitioner in c.p. no. 372 of 1997, which was filed under section 433(e) and (f) and 434 of the companies act 1956, to wind up the the respondent-company nepc india limited, 36, wallaja road, chennai.2. according to the appellant/petitioner the share capital of the respondent is rs. 20 crores divided into 2 crores equity shares of rs. 10/- each and the issued share capital of the respondent is rs. 16,19,37,000/- divided into 1,61,93,700 equity shares of rs. 10/- each. the objects of the respondent are to generate, accumulate, distribute, supply electricity and other power for the purpose of light, heat, motive power and for all other purposes for which electricity and other energy can be employed. as per the purchase order dated 18.02.1994, the respondent placed an order upon the petitioner for certain quantities of fasteners. between the period february 1994 and february 1996, the petitioner supplied the fasteners as ordered by the respondent and raised invoices in respect thereof, aggregating to rs. 1,30,95,769.21. the said fasteners were delivered to the respondent in good condition and they have also received the same, but have paid a sum of rs. 59,78,080.72 leaving a balance of rs. 71,17,688.49. the said balance amount has been acknowledged by the respondent through their letter dated 13.08.1996. inspite of repeated letters, the respondents were delaying the payments to clear the outstanding. after a long delay, the respondents issued two cheques bearing no. 953877 and no. 953878 drawn on canara bank dated 29.5.1996 for rs. 5,00,000/- each. both the cheques, on presentation were dishonoured by the bank on 5.6.1996 with an endorsement 'insufficient funds', and debiting an amount of rs. 1,300/- from the petitioner's account towards bank charges. as a gesture of goodwill the petitioner had handed over the above said two dishonoured cheques to the respondent-company, without resorting to criminal action under section 138 of the negotiable instruments act. the petitioner had once again raminded through various letters informing the respondent-company to discharge the outstanding debt of rs. 71,17,688.49. petitioner issued notice dated 26.07.1997 calling upon the respondent to pay a sum of rs. 71,17,688.49 along with interest at the rate of 24% pa. the said notice was statutory notice contemplated under section 433 and 434 of the companies act, 1956. in their letter dated 13.8.1997, the respondent has admitted its liability and informed that it was facing a liquidity crisis and undertook to clear off the debts within a period of one month. even thereafter, the respondent has failed to discharge the admitted debt with interest. hence, the petitioner submits that the respondent is unable to pay its debts and is deemed to be unable to pay its debts within the meaning of section 434 of the companies act, 1956 and the respondent company is liable to be wound up. the respondent-company is commercially insolvent and unable to pay its debts and on that ground also it is just and equitable that the respondent-company is liable to be wound up. the petitioner has also prayed for an interim order of injunction against the respondent restraining him from disposing of, alienating, encumbering, parting with possession of or creating any third party rights on or its assets and properties. hence, the petition to wind up the respondent-company under the companies act and also to appoint a liquidator to take charge of the assets, affairs, books of accounts, records, documents, papers, vouchers, bills, etc., and also for interim injunction.3. the respondent in their counter would state that only to harass the respondent the petition has been filed and the same is abuse of process of law. the amount claimed in the notice is unjust and dishonest claim. the respondent is a pioneer in manufacturing wine turbine generators in asia and is a running company owning assets and the assets far exceed the liablities. on this ground also the petition is liable to be dismissed. there are about 2 lakhs share holders in the respondent-company and about more than 500 employees are working in the respondent-company. the statutory notice required under law was not sent to the registered office of the respondent. the statutory notice dated 28.7.1997 sent by the petitioner to the respondent is not maintainable. the transaction between the petitioner and the respondent is under a running account and hence the company petition is not maintainable. there is a vast difference in the balance between the books of accounts maintained by the parties. the letter dated 25.3.1997 sent by the respondent to the petitioner and the letter dated 5.5.1997 sent by the respondent to the petitioner were deliberately suppressed by the petitioner. it has been made clear to the petitioner that the amount due under excise duty is not liable to be paid by the respondent since the fasteners supplied by the petitioner were exempted from excise duty. the wind mill itself is exempted from excise duty and all the parts required for the functioning of the wind mill are also exempted from excise duty. materials worth more than rs. 22 lakhs are lying on the stock of the respondent, which have to be accounted and taken back by the petitioner. the respondent has not admitted or acknowledged a sum of rs. 71,17,688.49 as the amount due to the petitioner in his letter dated 13.8.1996. the respondent has made payments subsequent to 13.8.1996. the respondent had sent a reply dated 5.5.1997 to the letter of the petitioner dated 25.3.1997 pointing out the vast difference in the balance shown in the accounts books of the petitioner. the notice dated 28.7.1997 was not sent to the registered office of the respondent and hence, there was no statutory notice as contemplated under law was given to this respondent before filing this company petition. the grounds stated in the petition for winding up the respondent-company are unsustainable and untenable under law. no liquadator need be appointed for the respondent-company. hence, the petition is liable to be dismissed with costs.4. the petitioner has filed a reply statement denying the contention of the respondent in the counter.5. the learned single judge, after giving due deliberations to the submissions made by the learned counsel on both sides, has ultimately come to the conclusion that the appellant/petitioner is not entitled to any relief under the company petition and accordingly dismissed the company petition without costs, which necessitated the petitioner/appellant to prefer this appeal.6. we have heard the learned counsel mr. p.r. seetharaman appearing for the appellant and the learned senior counsel mr. t.k. seshadri appearing for the respondent and considered their respective submissions.7. the learned counsel for the appellant would contend that after the dishonouring of the two cheques drawn by the respondent in favour of the appellant, the respondent had repaid the entire cheque amount and the amount payable was rs. 62,67,688.49 only and there was a compromise entered into between the parties and under the compromise the respondent had agreed to pay a lump sum of rs. 11,18,648.85 at the time of signing the memo of compromise and agreed to pay the balance amount of rs. 51,49,039.64 in three equal monthly installments of rs. 3,67,788.55 commencing from march 2001 and both the parties have signed in the memo of compromise and as per clause 6 of the memo of compromise, if the respondent is making any default in paying the instalments, he is liable to pay 24% pa interest from due dates. the grievance of the petitioner is that the learned single judge has failed to raise a proper issue for determination to the effect of compromise and failed to give a finding thereon and also as to the non-issuance of proper statutory notice under section 434(1)(a) of the companies act and under rule 96 of the companies (court) rules 1959.8. in the present case we are not inclined to deliberate at this stage on the issue whether the petition under section 433 and 434 is maintainable or not. we may only notice the supreme court decision, wherein the apex court has repeatedly expresed its displeasure at the conduct of a party who seeks to resile from the terms of a compromise voluntarily and knowingly entered into by him in the following decisions.in salkia businessmen's association v. howrah municipal corporation : air2001sc2790 , the apex court held as follows:the learned single judge as well as the division bench of the high court have not only over simplified the matter but seem to have gone on an errand, carried away by some need to balance hypothetical public interest, when the real and only question to be considered was as to whether the rspondent-authorities are bound by the orders passed by the court on the basis of the compromise memorandum, and whether the proposed move on their part did not constitute flagrant violation of the order of court - very much binding on both parties. the high court failed to do justice to its own orders. if courts are not to honour and implement their own orders, and encourage partly litigants - be they public authorities, to invent methods of their own to short circuit and give a go-bye to the obligations and liabilities incurred by them under orders of the court - the rule of law will certainly become a casualty in the process - a costly consequence to be jealously averred by all and at any rate by the highest courts in states in the country. it does not, in our view, require any extraordinary exercise to hold that the memorandum and terms of the compromise in this case became part of the orders of the high court itself when the earlier writ petition was finally disposed of on 13.2.1991 in the terms noticed supra notwithstanding that there was no verbatim reproduction of the same in the order. the orders passed in this regard admits of no doubt or give any scope for controversy. while so, it is beyond ones comprehension as to how it could have been viewed as a matter of mere contract between parties and under that pretext absolve itself of the responsibility to enforce it, except by doing violence to the terms thereof in letter and spirit. as long as the earlier order dated 13.2.1991 stood, it was not permissible to go behind the same to ascertain the substance of it or nature of compliance when the manner, mode and plea of compliance had already been stipulated with meticulous care and detail in the order itself. the said decision was also not made to depend upon any contingencies beyond the control of parties in the earlier proceedings.in somdutt v. govind ram air 2000 sc 1638 the apex court laid down as follows:it is not in dispute that the premises in question were in the occupation of bishandas, the father of govind ram (respondent). by virtue of the compromise which was entered into in 1981 before the appellate court, the son of the tenant who was already in possession was allowed to continue for a period of 10 years. even if there be a creation of tenancy, the compromise between the parties including govind ram was that govind ram would vacate the premises on 31st december, 1990. it is on that basis that the compromise was arrived at and the order passed by the appellant court. apart from anything else,govind ram is clearly estopped from filing any application objecting to the execution of the decree. on this ground alone, govind ram has to be non-suited.in bakshiram v. brij lal the supreme court has held as follows:law has to promote justice. the courts of equity and justice cannot uphold such an unfair stand. the respondent cannot be permitted to reprobate to his advantage. the binding effect of the compromise decree could not be taken away as it was to operate after death of the donor. may be a person with a better right, for instance, the sister of the last male holder, could sue the appellants and claim the property being nearer but that could not dilute the effect of the compromise decree, even though in nature of declaratory decree nor it could cloth the alienee with any right to resist the claim of the remote reversioner for recovery of possession on the ground that the next reversioner being alive the suit was not maintainable. the recovery of possession by the appellants could even be for the benefit of all the reversioners including the next reversioner, but it certainly did not adversely affect the suit filed by them for recovery of possession against a third person. when the succession opened on the death of the donor, it would have been governed by the law in force. his sister being nearer than the appellants could claim by virtue of the decree that the right and interest of alienor devolved on her. but if she did not, it could not recoil against the appellants and in favour of a stranger.9. in these circumstances we are of the considered view that the learned company judge should have either accepted the compromise making it as a part of the final order (decree) or could have refused to accept the said compromise with a reasonable ground for not accepting the same and in such case only he could have proceeded on merits to decide whether winding up was necessary or not. in this connection we may state that this court has noted the oral submissions made by the parties that number of winding up proceedings have been preferred against the company and in many of them such compromise petitions have been filed. for the said reason we are not deliberated on the question whether the winding up is necessary or not, which required determination by the learned company judge.10. in fine, the appeal is allowed and the matter is remanded to the learned single judge for fresh determination taking into consideration the compromise petition filed by the parties and then to dispose of the matter in accordance with law.