Sakets Fabs Private Limited vs Kranti Automobiles Limited
2018 Latest Caselaw 5313 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                              Date of decision: 05.09.2018
+      CO.PET. 670/2014
       SAKETS FABS PRIVATE LIMITED            ..... Petitioner
                     Through  Mr.Vikas Goel and Mr.Kunal Dutt,
                              Advs.

                           versus

       KRANTI AUTOMOBILES LIMITED            ..... Respondent
                   Through   Mr.Kumar Sameer, Adv.

       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (ORAL)

1. This petition is filed under Sections 433(e), 434 and 439 of the Companies Act, 1956 seeking winding up of the respondent Company. It has been pleaded in the petition that the petitioner is a small scale industrial unit supplying automobile components to the respondent since April 2013. Various purchase orders were placed by the respondent pursuant to which the components were supplied from April 2013 to February 2014. Pursuant to each supply, an invoice was raised by the petitioner which has been duly acknowledged by the respondent. It is pleaded that the petitioner is maintaining books of accounts and as per the respondent's account maintained by the petitioner in its books, an amount of Rs.39,86,897.33/- is shown as outstanding. A legal notice was sent to the respondent on 26.06.2014. A reply was received on 07.07.2014 from the advocate of the respondent where the respondent have refused to pay the money raising

some issues.

2. I have heard learned counsel for the parties.

3. Learned counsel for the petitioner has pointed out that in all 115 invoices have been raised on the respondent. He points out to Annexure P-4 where each of the invoices has been duly received by the respondent by affixing signatures and the company stamp. He has also pointed out that the statutory notice was sent to the respondent on 26.06.2014. In the reply sent by the respondent on 07.07.2014, there is no denial regarding the receipt of the goods. A frivolous complaint is raised that the metal sheets supplied were coated with oil which has resulted in peeling of the paint. It is pleaded by the learned counsel for the petitioner that this plea is an afterthought.

4. Learned counsel for the respondent has reiterated that there is no afterthought in the defence taken by the respondent in the reply dated 07.07.2014 to the legal notice. He relies upon an e-mail dated 14.10.2013 received by the respondent complaining about the fading of colour of the vehicles. Reliance is placed upon a communication received on 09.01.2014 from Deva Auto City, a customer of the respondent Company.

5. I may only note that the goods were supplied to the respondent for the period from April 2013 to February 2014. There is no dispute regarding the supply of the goods. The complaint of the respondent is that the petitioner supplied oil coated sheets to the respondent and the respondent does not have any plant for removal of oil from the sheets. It is pleaded that in order to save expenses on storage, the petitioner has been indulging in this act of treating/coating the sheets with oil. It is pleaded that this resulted in the paint on the body of the metal components/sheets of three wheelers peeling off within three months causing huge damages to the customers of the

respondent. This plea has been taken for the first time when the reply to the legal notice was sent on 07.07.2014. The facts that emerge are that from April 2013 to February 2014, the respondent accepted delivery of goods without a whisper that there were some defects or the goods were not as per the purchase order. Having received and consumed the goods they failed to pay the dues. It is only subsequently after receipt of the legal notice from the petitioner for the payment of the outstanding dues which was sent on 26.06.2014 that the respondent has woken up to claim that there is some variation in the goods supplied which do not suit the business conditions of the respondent. There is no explanation why this plea was not taken when the goods were delivered. The defence which is sought to be raised cannot be said to be bona fide or prima facie valid.

6. No doubt the learned counsel for the respondent has relied upon the two communications to plead that they have received complaints about peeling of paint. However, these complaints are received from the alleged customers of the respondent and do not generate any confidence. In my opinion, the defence raised by the respondent cannot be said to be bonafide.

7. 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) CompLJ 481 (SC) where the Supreme Court held as follows:-

"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 fide and not spurious, speculative, 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."

8. Accordingly, I admit the present petition. The Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers „Statesman‟ (English) and „Veer Arjun‟ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing.

9. Petitioner shall deposit a sum Rs.75,000/- towards cost of the publication with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required. The Official Liquidator shall also endeavour to prepare a complete inventory of all the assets of the respondent-company when the same are taken over; and the premises in which they are kept shall be sealed by him. At the same time, he may also seek the assistance of a valuer to value all assets to facilitate the process of winding up. It will also be open to the

Official Liquidator to seek police help in the discharge of his duties, if he considers it appropriate to do so. The Official Liquidator to take all further steps that may be necessary in this regard to protect the premises and assets of the respondent-company. The OL will also seize the bank accounts of the respondent.

10. However, in the interest of justice, I suspend the above order for a period of six weeks to enable the respondent to pay to the petitioner the outstanding amount of Rs.39,86,879.33/-. In case the said amount is paid within six weeks from today, the aforesaid order shall stand revoked.

11. List on 12.11.2018.

JAYANT NATH, J SEPTEMBER 05, 2018 rb