Jyoti Limited vs M/S. Uee Electrical Engineers ...
1999 Latest Caselaw 981 Del

ORDER

Dr. M.K. Sharma, J.

1. By this order I propose to dispose of the application filed by the respondent seeking for modification of the order passed by this court on 18th January, 1999 in C.A. No. 1887/98.

2. The petitioner filed a petition, in this court under Sections 433(e), 434 and 439 of the Indian Companies Act, 1956 against the respondent praying for winding up of the respondent company on the allegation that the respondent is unable to pay its debts. During the pendency of the aforesaid petition the petitioner filed an application under Rule 9 of the Companies (Court) Rules, 1959 which was registered as C.A. No. 1887/98. By order dated 18.1.99 this court passed an order on the aforesaid application directing the respondent company to deposit in court a sum of Rs. 50 lacs within two weeks therefrom. Seeking modification of the said order this application has been filed contending, inter alia, that no amount is due and payable by the respondent for the fact that the petitioner is yet to rectify the discrepancies in the material supplied, as sought for by the Delhi Jal Board.

3. I heard the learned counsel appearing for the petitioner as also the counsel appearing for the respondent.

4. It was submitted by the counsel appearing for the respondent that the respondent was not able to pay the amount in terms of the order of the court as the petitioner did not remove the discrepancies pointed out by the Delhi Jal Board. It was also submitted that so long the aforesaid discrepancies as pointed out by the Delhi Jal Board are not rectified, no payment is being made by the Delhi Jal board and thus payment to the tune of about Rs. one crore of the respondent is held up with the Delhi Jal Board. It was further submitted by Mr. Rohtagi, appearing for the respondent that due to the aforesaid financial constraint because of withholding its dues by the Delhi Jal Board due to the petitioner not rectifying the defects, the respondent is not in a position to deposit the amount in terms of the order passed by this court on 18.1.1999 and accordingly the said order is required to be modified.

5. I have also heard the learned counsel appearing for the petitioner. He submitted that the application for winding up of the company was filed was in view of the expressed inability of the respondent to pay its debts to the petitioner. He also submitted that the four cheques issued by the respondent were dishonoured and that even thereafter the cheque issued by the respondent to the tune of Rs. 58 lacs also dishonoured when presented to the bank. He also submitted hat it is an admitted position that the respondent received from the Delhi Jal Board Rs. 50 lacs towards supplies made by the petitioner to the Delhi Jal Board through respondent which is corroborated by the various documents placed on record and accordingly it was contended that the respondent is unable to pay its debts and therefore, no modification of the said order is required and called for.

6. During the course of arguments, however, counsel for the respondent stated that the respondent undertakes to make payment of Rs. 25 lacs and is also ready and willing to furnish security for the balance amount of Rs. 25 lacs provided a direction is issued and the petitioner also takes necessary action to rectify the defects in terms of the order passed by this court on 18.1.99.

7. In the light of the submissions of the learned counsel appearing for the parties. I find that an amount of Rs. 50 lacs was received by the respondent from the Delhi Jal Board against the execution of work for Pragati Vihar Sewage Pumping Station for which the petitioner supplied equipments worth approximately Rs. 60 lacs. I have also noticed that the Delhi Jal Board has pointed out certain defects in the said equipments and there is an obligation of the petitioner to send its representative along with the respondent to inspect the equipments in the presence of the officials of the Delhi Jal Board without prejudice to the rights and contentions of the parties in the present case. In the event of there being any defect in the equipments and machineries supplied by the petitioner the same shall be rectified by the petitioner. However, pending such action the following directions are issued such action the following directions are issued in terms of the undertaking and agreement.

8. In terms of the aforesaid undertaking given by the counsel appearing for the respondent on instructions from the representative of the respondent who was also present in court on the date when the application was argued, I issued a direction to the respondent to deposit an amount of Rs. 25 lacs within three weeks from today in the Registry of this court and on deposit of the aforesaid amount the said amount shall be released in favour of the petitioner on furnishing sufficient security to the satisfaction of Registrar of this court. For the balance amount of Rs. 25 lacs, the respondent shall furnish sufficient security to the satisfaction of the Registrar of this court for restitution. The representative(s) of the petitioner shall accompany the representative(s) of the respondent to the office of Delhi Jal Board inspect the equipments and shall rectify the defects , if any, in the said equipments so as to enable the respondent to receive the amount withheld, if any, for the defects in the said equip-

ments. In terms of the aforesaid order, the application stands disposed of.

C.P. No. 416/1998

Refortify on 10th December, 1999.