Interarch Building Products P Ltd vs Caparo Engineering India Ltd
2018 Latest Caselaw 5684 Del

$~CP-16
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                             Date of decision: 19.09.2018
+      CO.PET. 359/2013
       INTERARCH BUILDING PRODUCTS P LTD..... Petitioner
                    Through  Mr.Sanjiv Bahl, Adv.


               versus
       CAPARO ENGINEERING INDIA LTD       ..... Respondent
                      Through Mr.Siddharth Yadav, Adv.

       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (ORAL)

1. This petition is filed under section 433/434 and 439 of the Companies Act, 1956 seeking winding up of the respondent company. The case of the petitioner is that after detailed discussions respondent placed a letter of intent dated 22.1.2008 for supply of pre-engineered solid web portal building system for Singur. Similarly, another purchase order was placed by the respondent vide letter of intent dated 22.1.2008 followed by purchase order dated 27.1.2008 for supply of pre-engineered solid web portals building system for Jamshedpur. It is pleaded that the petitioner during the course of execution of the two orders submitted running bills from time to time. The total bills for the supply of Singur order came to be Rs.4,27,39,497/- against which a balance amount of Rs.25,30,656 remains unpaid. Similarly, it is pleaded that the total bills for the Jamshedpur Project came to Rs.4,99,67,836/- against which the respondent paid a sum of

Rs.4,55,34,037/- leaving a balance of Rs.44,33,799/-. It is pleaded that after several reminders the respondents have vide email dated 5.12.2009 sent the statement of account confirming the admitted liability of a balance amount of Rs.36,30,656/- for the Singur Project. Similarly, for the Jamshedpur project an email was sent on 6.1.2010 attached with the Statement of Account admitting liability of Rs.24,91,354/-. Legal notice was sent to the respondent on 27.9.2012. As no response was received the present winding up petition has been filed.

2. I have heard learned counsel for the parties. Learned counsel for the petitioner has vehemently relied upon the communications received from the respondent regarding the Singur and Jamshedpur Accounts whereby the said respondent has acknowledged the debt as noted above.

Learned counsel further submits that as an afterthought the respondents have generated some communications where they claim that there were some defects in the quality of the work done by the petitioners. However, he submits that a perusal of the communications would show that they all pertain to the Jamshedpur Project and there is no grievance stated in any of these communications regarding the Singur Project. He submits that as far as Singur Project is concerned a sum of Rs.25,30,656/- undoubtedly remains unpaid.

3. Learned counsel for the respondent has taken me through various emails including email dated 23.6.2010, 28.12.2010, 20.6.2011 and 16.7.2012 and a Show Cause Notice dated 27.9.2012 to plead that there were genuine bona fide disputes regarding the claim of the petitioner. He submits that the work done by the petitioner was incomplete on account of which the respondent suffered damages. Hence, he submits that no amounts

are due and payable. Reliance was placed on the communication dated 27.9.2012.

Reliance is also placed on judgment of this court in Nakshatra Steel Sales & Services Ltd. vs. M/s.Radlay Metal Products (P) Ltd., 2014 V AD (Delhi) 661.

4. I may deal with the pleas regarding the Singur Project as it has been pleaded that there are no complaints regarding the work done for the same. Regarding the Jamshedpur Project though there is an acknowledgement by the respondent acknowledging the dues, however, in view of the subsequent communications, it was very fairly pleaded by the learned counsel for the petitioner that the dues of the Jamshedpur Project may not be gone into for the purpose of adjudication of the present winding up petition.

5. I may only note that in paragraph 12 of the petition a categorical statement is made that a sum of Rs.25,30,656/- remains unpaid for Singur Project. Paragraph 12 of the petition reads as follows:-

"12.That the total amount of the bills against supply of PEB building bearing contract no. CEIPL-Singur/LOI/08-09 which is an order for Singur project, came to Rs. 4,27,39,497/- against which, the respondent paid a sum of Rs. 4,02,08,841/- on account, thus, leaving a balance of Rs. 25,30,656/-."

6. In reply to para 12 the respondent stated as follows:-

"11-13 Contents of para nos.11 to 13 of the Petition are matter of record, however, it is submitted that the submissions mentioned in the Preliminary Objections / Submissions and the contents of the emails exchanged between the Parties may kindly be referred to, which are not being repeated herein for the sake of brevity."

7. Hence, the contents of paragraph 12 have not categorically been

denied by the respondent. Reference is made to the preliminary objections. As per the preliminary objections it has been pleaded by the respondent that the petitioner was unable to complete the supply of pre-engineering building within the time agreed. Reliance is placed on various emails pertaining to completion of project. Reliance is also placed on photographs taken of the site pleading that the work done was incomplete.

8. I may also note that vide communication dated 15.4.2011 the petitioner has written to the respondent pointing out that a sum of Rs.25,30,656/- is due from the respondent for the said project. The respondents have sent statement of their accounts where as on 5.12.2009 they admit an outstanding due of Rs.36,30,656/-.

9. A conjoint reading of this statement of account and the reply filed by the respondent prima facie shows that an outstanding balance of Rs.36,30,656/- remains for the Singur project as on 05.12.2009. This is presently Rs.25,30,656/-.

10. I may now also look at the emails relied upon by the respondent to claim that the outstanding work has not been fully completed. I may note that these emails which have been relied upon by the learned counsel for the respondent all pertain to the period after the acknowledgement sent on December, 2009 whereby the respondent had confirmed the outstanding dues payable to the petitioner for the Singur and Jamshedpur Plants. However, in the interest of justice, I may look at some of those emails. Reference may be had to the emails written by the respondent dated 22.06.2010, 23.6.2010, 28.12.2010, 20.6.2011 and 16.07.2012.

"The petitioner on 22.06.2010 wrote as follows:

"22.06.2010 Dear Mr.Shahu,

This has reference to your order for Pre-Engineered Building at Jamshedpur.

The Building is completed & handed over to your and you are using the building since last one year. Therefore payment upto completion is due as per terms."

In reply, the respondent on 23.06.2010 wrote as follows:-

"Dear Mr Tiwari Please find enclosed herewith the status of your pending job and payments as per PO terms and condition.

Inspite of several requests made by us for completing the job, your response was very poor and intention was only to get your pending amount.

Because of your improper/incomplete job done, we have faced huge problems and which has also resulted into financial loss to Caparo, which has been communicated to you time to time.

I request you that instead of only writing mails for your pending payment, you need to visit the site and complete the job as per PO by 30th June, 2010.

Failing of which Caparo will get the job done by some other agency and the amount will be debited to Interarch.

Any further mail by you without completing the job will not be entertained by any Caparo personals.

Regards Prakash Sahu"

Similarly, on 28.12.2010 the respondent also wrote as follows:-

"Dear Mr Tiwari, Request you to go through the attached mails which are self explanatory and will certainly help to refresh your memories.

I am sorry to say that in spite of several reminders, till date no one from side has turned up for completing the job at Jamshedpur.

Please let me know as per our PO dated 27. 01.2008 and para f, why the LD clause will not be applicable to you."

On 20.06.2011 the petitioner wrote as follows:-

"Subject: Re: Request for release of long due outstanding payment against your order for Pre-engineered Building at Jamshedpur

Dear sir This have reference to your mail in connection release of final payment against the work done by you at our CEIPL site.

In this context we would like to inform you that after issuance of pending work completion certificate to you, same rain water leakage from roof/downtake line and from water gutter ware observed.

Therefore you are requested to look into the matter and repair the same at the earliest.

In view of the above we are unable to release your final payment till the completion of the work in all respects.

On 16.07.2012 the respondent again wrote as follows:-

"Dear Mr Tiwary,

Kindly recall your visit to Jamshedpur about 6/7 months back, all the shortcomings were shown to you with respect to quality of job, you agreed to revert with your action plan for completion of same, we are yet to hear from you. Kindly respond so that case can be settled and closed."

11. A perusal of the above emails shows that there is no reference to any dispute pertaining to alleged defects in Singur plant. There are some minor defects mentioned for the plant of Jamshedpur but not a whisper of anything wrong done at the Singur Plant. In my opinion, there is merit in the submission made by the learned counsel for the petitioner that there is no dispute about the dues payable to the petitioner about the Singur Plant.

12. In my opinion, keeping in view the clear admission as contained in the communication dated 5.12.2009 and the pleadings and reply filed by the respondents to para 12 of the winding up petition it is manifest that the stated amount remains unpaid. The attempt of the respondents to claim that there is a bona fide dispute regarding the payment payable for the singur project appears to lack bona fide as in all the communications that have taken place after 5.12.2009 there is no reference to any deficit work regarding the Singur project.

13. 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."

14. In my opinion, there is no bona fide dispute raised by the respondent. 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.

15. 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 all the bank accounts of the respondent.

16. In the interest of justice, an opportunity is granted to the respondent to pay the dues of the petitioner. The aforesaid order appointing the OL as the Provisional Liquidator is kept in abeyance for four weeks. In case the respondents pay Rs.25,30,656/- to the petitioner within four weeks, the order of winding up shall stand revoked.

17. List on 24.01.2019.

JAYANT NATH, J.

SEPTEMBER 19, 2018/n