Nutan Art Corporation vs Kingston Electronics Pvt. ...
1992 Latest Caselaw 390 Del

JUDGMENT

J.K. Mehra, J.

(1) This is a petition for winding up instituted by the petitioner against the respondent M/s Kingston Electronics Pvt. Limited. The claim of the petitioner is based on the amounts claimed as due and payable by the respondent for displaying the advertisements of their products on various hoarding sites situated at Ahmedabad belonging to the petitioner-corporation. It is stated in the petition that the respondent company has been transacting business with the petitioner-corporation from May 1986 and various bills were raised by the petitioner-corporation against the respondent company totalling a sum of Rs. 1,71,600.00 . details whereof have been filed along with the petition as Annexure-A thereto.

(2) Certain payments had been received from time to time by the petitioner and on 21st November 1986 the petitioner called upon the respondent to pay the amount of Rs. 83500.00 which was the amount due at that time. The respondent company issued 3 cheque for Rs. 5000/ on 17th October 1986 which was returned with the memo dated 21st November 1986 with the remarks "account closed". On 24th November 1986, further letter was sent by the petitioner to the respondent company giving the details of the outstanding. According to the petitioner, it had received a sum of Rs. 90,000.00 at She and of the period ending 31st March 1987 leaving a balance of Rs., 81,600.00 as due and payable by the respondent company to the petitioner. It is stated that by 30th April a total sum of Rs. 87,100.00 had fallen due and payable by the respondent to the petitioner and that the respondent company promised that they would clear the dues of the petitioner in Installments of Rs. 10000.00 each. Thereafter another bank draft of Rs. 5000.00 was received apart from the cheque for Rs. 10000.00 leaving an unpaid balance of Rs. 72,100.00 . When the petitioner failed to realise this amount it issued a notice under section 434 of the Companies Act on 24th December 1988. The said notice remained unreplied. The Respondent also did not take any steps to pay or secure or compound the debt of the petitioner within the stipulated period of 3 weeks as contemplated in section 434 of the Companies Act. The petitioner had also filed into the court true copy of their ledger duly attested by Its Chartered Accountant and the carbon copies of all their bills from their record. The petition is also accompanied by a statement of account certified to be correct by the Chartered Accountant of the respondent company clearly showing that a balance due as Rs. 77.100.00 up to 20th May 1987. Subsequent thereto, a bank draft of Rs. 5000.00 was received in September 1987. A copy of the ledger account of the respondent company has also been filed which corroborates the debit balance mentioned above. It is further alleged in the petition that the Managing Director of respondent Mr. Nagpal came to the residence of the proprietor of the petitioner corporation and requested him to wait turn a period of six months within which due will be cleared. But the said promise has also not been fulfillled.

(3) This Court had issued a notice to the Respondent Company to show cause as to why the petition should not be admitted. In reply, the respondents have taken a very peculiar stand stating that the Executive Director at Ahmedabad Mr. Jai Singh Hitkari, who is the brother-in-law of the director of the respondent, had colluded with the petitioner and raised the debits against Respondent for making wrongful gains.

(4) Mr. Dhir, counsel for the respondent, at the time of hearing conceded that the company's accounts at Ahmedabad do reflect that the amounts claimed by the petitioner as due, but states that those are all cooked up and fictitious entries and do not reflect the correct position and are the result of the said collusion between their former executive director the said Shri Jai Singh Hitkari and the petitioner.

(5) He has also challenged the right of the petitioner to present the present petitioner on the plea that it is not a partnership firm registered under the Partnership Acs. and as such the present petition is barred under the provisions of Section 69 of the Partnership Act. This contention has been taken in a very light-hearted manner because along with the rejoinder the petitioner had produced the photocopy of Form-G issued by the Registrar of Firms regarding the registration of the petitioner as a partnership firm under the Partnership Act.

(5) On the question of the collusion of said Shri Jai Singh Hitkari with the petitioner and his playing the fraud on the company as alleged, I asked Mr. Dhir to produce any correspondence with said Shri Jai Singh Hitkari and also documents wherefrom such allegations could be substantiated. I further asked Mr. Dhir as to whether the respondent company had initiated any action against the said Shri Jai Singh Hitkari, criminal or civil, in respect of the alleged collusion or cheating or the fraud as was being alleged, in the course of arguments about raising of bogus bills. Mr. Dhir fairly conceded that no action had been taken against Mr. jai Singh Hitkari as he happened to be the brother-in-law of Mr. S.S. Nagpal, the Managing Director of the respondent company, but he states that all sing for a company which has suffered a wrong at the hands of one of its senior officers of the rank of Executive Director to not to take any action against such officer. Such conduct on the part of the company implies that the company had condoned such defaults or these allegations are without any substance and have been made with the sole object of defeating the petitioner's claim. Mr. Dhir has also not been able to explain as to why the notice under Section 434 of the Companies Act was not replied to. Not a single document has been placed on record wherefrom it appears that Mr. Hitkari had exceeded his powers or he had been accused by the Respondent of having acted in collusion with the petitioner. Till date even a notice has not been given to Mr. Hitkari. In the circumstances, the plea of the petitioner that the dispute raised is mala fide and without any substance appears to be well founded. The petitioner has duly produced copies of its own account books as well as those of the respondent company which seem to tally. The petitioner has also produced the original office copies of the bills raised from time to time. In reply to para 15 where there is a specific allegation that Mr. Nagpal visited the residence of the proprietor of the petitioner corporation and requested for six months time, there is only a bald and vague denial of these allegations and these have not been specifically dealt with. No such plea or dispute was ever raised in response to the notice under Section 434 of the Companies Act also which lends further support to the fact that the disputes now sought to be raised in reply to the show cause notice are neither genuine nor bonafide and are in the nature of after thoughts.

(6) Both sides have cited verious authorities in support of their respective contentions. All such authorities lay down the well known principle that where there is a bonafide dispute regarding the claim of the petitioner, the petition for winding up should not-been entertained. In the present case, none of the rulings cited by Mr. Dhir helps him since I have already held above that the dispute sought to be raised is not bonafide.

(7) Held Further that the dispute raised by the respondent company is not bonafide. This petition is admitted. A citation may issue for publication in "Daily Statesman" and "Hindustan (Hindi)" and in Delhi Gazette for 14th October 1992. It is further directed that the citation shall not be published, in case the respondent company pays the dues of the petitioner within six weeks from the date hereof.