Kalra Iron Stores vs Faridabad Fabricators P. Ltd. ...
1991 Latest Caselaw 413 Del

JUDGMENT

Y.K. Sabharwal J.

1. Though the petitioning creditors in the two winding-up petitions are different, the facts alleged in both the petitions are almost similar; the petitioners seek winding up of the same company, namely, Faridabad Fabricators Pvt. Ltd. This order will dispose of both the petitions. Briefly, the facts pleaded in C.P. No. 138 of 1988 are :

The petitioner is engaged in the business of supplying all kinds of rods, angles, flats, etc. The registered office of the respondent-company is situate at 182, A. G. C. R. Enclave, I. P. Extension II. New Delhi. The petitioner entered into an agreement and understanding for supply of iron and steel material to the respondent company. The stipulations were that the payment would be made by the respondent company within 90 days of the receipt of the bills raised by the petitioner and that interest at 18 per cent. shall be charged on the amount of the bills which remain unpaid. The bills will be paid by account payee cheques only. In pursuance of the said undertaking, the petitioner supplied to the respondent-company various consignments from September 6, 1986, to September 16, 1986, which have been duly received and endorsed by the respondent-company. As a proof of the receipt of the material, From ST-15 was also executed by the respondent-company. A statement of accounts was prepared on the said bills showing a total outstanding of Rs. 61,450 in favor of the petitioner which has been duly acknowledge by the respondent-company. Against the bills, account payee cheques issued by the respondent-company in the sum of Rs. 61,450.20 were dishonoured. The details of the cheques are :

 Ch. No.        Date           Amount         Banker's  name
337188      24.10.1986     16,000.00     Syndicate Bank, Faridabad
337189      29.10.1986     16,000.00               "
337190      03.11.1986     16,039.20               "
-         10.11.1986     13,411.00               "
                           ---------
                           61,450.20
                           --------- 
 

2. The respondent-company, in spite of various representations, did not make the payment and thus the petitioner served upon the respondent-company a statutory notice for winding up dated August 24, 1988, asking it to pay to the petitioner a sum of Rs. 61,450 along with interest calculated at the rate of 18 per cent. per annum within a period of three weeks from the receipt of the notice. The respondent-company is indebted to the petitioner for Rs. 82,662 which includes the principal amount of Rs. 61,450 and interest amount of Rs. 21,212 as on September 15, 1988 at the rate of 18 per cent. per annum. The respondent-company has all along been admitting the liability and there is no bona fide dispute regarding the indebtedness of the company and that, in spite of the reminders including the statutory notice, the company has neglected and failed to pay the said sum and it is just and equitable to pass an order for the winding up of the company.

3. The facts pleaded in C.P. No. 139 of 1988 are almost similar. The only difference is that the principal amount alleged is Rs. 1,54,894.40 besides interest of Rs. 53,281.36 as on September 15, 1988 at the rate of 18 per cent. per annum thus, making a total of Rs. 2,08,175.76. The particulars of the cheques alleged to have been issued by the respondent-company in this petition are these :

 Ch. No.         Date        Amount                 Banker's name
337149        19.11.1986    16,025.00         Syndicate Bank, Faridabad
337141        02.12.1986    13,580.00                   "
337142        29.11.1986    13,000.00                   "
337130        11.12.1986    11,707.50                   "
337168        10.12.1986    11,000.00                   "
337127        29.11.1986    14,879.00                   "
337143        27.11.1986    15,410.00                   "
337148        11.12.1986    15,000.00                   "
337149        13.12.1986    14,743.00                   "
337169        26.12.1986    11,491.00                   "
337131        08.12.1986    11,000.00                   "
337167        22.12.1986    13,230.00                   "
337166        16.12.1986    13,000.00                   "
337170        20.12.1986    10,440.00                   "
337171        31.12.1986    10,440.00                   " 
 

4. Both the petitioners, along with the petitions, placed on record copies of the bills and the challans. The petitioners have also placed on record Forms ST-15 alleged to have been given by the respondent-company besides the dishonoured cheques and the memo issued by the bank on the dishonour of the cheques as also a copy of the notice dated August 23, 1988. It was explained by counsel for the petitioners that, on account of a typographical error in the petitions, the date of the notice has been mentioned as August 24, 1988, though in fact it is August 23, 1988. It may also be stated that the petitioners have not placed on record the statements of account which are alleged to have been acknowledged by the respondent-company as per the averments made in both the petitions. The petitioners also did not place on record along with the petitions any proof in support of the averments that it served statutory notices for winding-up on the respondent-company.

5. In answer to show cause, the respondent-company has, inter alia, pleaded that : (1) no notice was received by the respondent company and no proof has been enclosed of service of notice and as such the presumption of deemed insolvency of the company under section 434(1)(a) cannot be raised; (2) there is no averment in the petition to the effect that the company is unable to pay its debts as required by section 433(e)(3) no goods were supplied and none were actually received by the company and the petition has been filed in connivance with Sh. Navjeevan Sood, ex-managing director of the company, who took away with him the cheque book and rubber stamp of the company and was in a position to issue cheques even though he had left the company.

6. There is no dispute between the parties that Navjeevan Sood left the company on December 18, 1986, and thereafter the company has been managed by the present management after taking over from Mr. Sood.

7. The first question to be determined is whether the petitioner is entitled to invoke the deemed inability of the respondent company under section 434(1)(a) of the Companies Act. For invoking the said provisions, it was incumbent upon the petitioner to serve on the respondent company, by causing it to be delivered at its registered office, by registered post or otherwise, notices of demand requiring the company to pay the sum due to the petitioners. The petitioners have alleged in the petitions that they served upon the respondent company statutory notices for winding up. No proof, however, was filed in token of service of notice in spite of the fact that the service of the notice was seriously disputed by the respondent company. During the hearing of arguments, counsel for the petitioners conceded that notices had not been served on the respondent company. Learned counsel, however, contended that the respondent company was avoiding service of the notices. Assuming the respondent company was avoiding to take deliver of the registered envelopes there were other methods open to the petitioner to serve the company. There is nothing on record that any other mode was adopted. In any case, the averments in the petitions, that statutory notices were served on the respondent company are incorrect. Furthermore, the requirement of section 434(1)(a) is that the notice is to be delivered at the registered office of the company. During the course of arguments in C.P. No. 138 of 1988 the petitioner placed on record a postal envelope said to have been sent by the petitioner the respondent-company. The address given on the said postal envelope is not that of registered office of the respondent-company but the address given is that of Faridabad. Similarly, a postal envelope was also filed on the record of C.P. No. 139 of 1988. On the said envelope though the address given is that of the registered office of the respondent company the endorsement made on that envelope shows that it was also not served on the respondent company. The endorsement is that in spite of a number of visits the premises were found locked. It stands established that even this registered envelope was not served on the respondent company and the averment about service of the statutory notice on the respondent in C.P. No. 139 of 1988 is incorrect. As the consequences of failure to comply with the notice of demand sent under section 434(1)(a) are of far-reaching effect leading to the presumption that the company is unable to pay its debts, the provisions is required to be strictly construed and a creditor for relying upon the deemed inability of a company has to strictly comply with the requirements of service of the notice of demand in terms of section 434(1)(a). The facts noticed above show that the petitioner have failed to comply with the provisions of section 434(1)(a) and thus they are not entitled to invoke the presumption of deemed inability against the respondent company.

8. Even without invoking the deemed liability of a company to pay its debts, a creditor can seek winding up of a company under section 433(e) read with section 434(1)(c) on the ground that the company is unable to pay its debts. The petitioner have not specifically pleaded that the company is unable to pay its debts. The petitioners have not stated as to what are the contingent and prospective liabilities of the company. Assuming that the petitioners have pleaded sufficient facts to show that the company is unable to pay its debts, I will now examine the documents placed on record by the petitioner and in the light of the said documents consider whether the disputes raised by the respondent company are bona fide or not. As noticed above, the petitioners have not placed on record the statements of account or acknowledgments thereof by the respondent company though pleaded in the petitions. The four cheques, subject-matter of C.P. No. 138 of 1988, alleged to have been issued by the respondent company are dated October 24, 1986, October 29, 1986, November 3, 1986, and November 10, 1986. The two bills under which it is alleged that the material was supplied to the respondent company are dated September 13, 1986, and September 16, 1986. According to the case of the petitioner, payment was required to be made by the respondent-company within 90 days of the receipt of the bills. If that was so, why the cheques were given before expiry of 90 days, is one of the disputes raised by the respondent company which shall have to be examined. Another question to be examined would be why cheques were issued before 90 days when sufficient funds were not available in the bank account. Furthermore, the memo of the bank returning two of the aforesaid cheques is dated November 30, 1987, and it appears from the endorsement of the said cheques that they were presented to the bank on November 30, 1987, i.e., more than a year after the date of the issue of the cheques. This is another aspect which requires adjudication. In the light of these facts it has to be held that the plea of the respondent company that Navjeevan Sood left the company on December 18, 1986, and took away with him the cheque book and rubber stamp of the company and issued the cheques in question without delivery of goods is of substance and has been raised in good faith and that being so, the petitioner cannot invoke the winding up jurisdiction of this court. The plea of the respondent cannot be held to be mala fide simply on the basis of dates on Form ST-15. The respondent company has denied that it issued the said ST-15 Forms. The said ST-15 Forms were issued by the Sales Tax Department on October 4, 1986, although the date of the signatures by the respondent company is mentioned as June 2, 1987. The said ST-15 Forms have also to be seen in the light of the facts and the circumstances noticed above. Further, though the respondent company has pleaded that it never received the goods and also that the price mentioned in the bills is three times the prevalent market price the petitioners have not placed on record any documents to prima facie controvert the said pleas. Though the amount of the bills, dates of the cheques and the dates of the ST-15 Forms in C.P. 139 of 1988, are different the primary facts being common, the result in both the petitions has to be same. As a consequence of the aforesaid discussion, in my view, the respondent company has been of the aforesaid discussion, in my view, the respondent company has been able to raise bona fide disputes in regard to the claims made in these petitions.

9. The petitions are, accordingly, dismissed leaving the parties to bear their own costs.