MANGANESE ORE INDIA LIMITED NAGPUR Vs. SANDUR MANGANESE AND IRON ORES LIMITED YESHWANTNAGAR BELLARY DISTRICT

JUDGEMENT

(1.) THIS is a case wherein the petitioners have alleged that the respondents are indebted to them to a substantial extent and that despite various demands including through a statutory notice that the amount is still outstanding and that consequently, the petitioners are justified in applying for the winding-up of the respondent-company principally on the ground that it is incapable of paying its debts. Briefly stated, in paragraph 14 of the petition, the petitioners allege that an amount of Rs. 43,23,504/- was the outstanding debt and it is on this basis that they have presented this petition. The respondents have appeared through their learned Counsel and they have challenged the maintainability of this petition principally on two grounds, the first being that the service of statutory notice in the manner prescribed under the Companies Act is condition precedent for the presentation of winding up or more importantly, for the grant of the reliefs asked for as the presumption of commercial insolvency flows from non-compliance with the provisions of the statutory notice and secondly, on the ground that there are certain serious defects in the pleadings. A third point was also argued namely that there is a discrepancy with regard to the actual amount due as different figures have been set out at different times and that consequently, if there is uncertainty with regard to this important head, that the petition itself is liable to fail because the Court would not be in a position to hold that a prescribed amount constituted the unpaid liability.

(2.) I shall dispose of the third objection first because it emanates from the contention canvassed by the respondents' learned Counsel that there has to be a level of certainty with regard to the outstanding debt and 'he has placed reliance on a decision reported in 1990 (3) Co. L. J. 322. He has drawn my attention to the fact that as often happens, various fig-xires have been set out in the correspondence and in the calculations and he contends that there is no definite manner in which this Court will be able to hold that any of these figures truly represent the correct state of affairs and that consequently, the Court would have to conclude that it is impossible to quantify the debt exactly in which case the petition would have to fail. The petitioner's learned Counsel has drawn my attention to the decision of the Supreme Court in Mis, Afadhusiidan Gordhanclas and Company v Mad. hu Woollen Industries Private Lim- ited , wherein, the Supreme Court at para 21 has very clearly held that even if the Court has to adopt a sifting process, in order to arrive at a figure which represents the undisputed debt, that merely because there is some discrepancy or variation in respect of some of the other figures, that it is no ground on which the petition should fail. He has also drawn my attention to an earlier decision of this Court in Hegde and Golay Limited v State Bank of India, wherein, at para 28 once again the Court has gone into the aspect of whether a petition would still be maintainable if there is some dispute with regard to the precise amount due and specifically at para 21, the Court has concluded that even if through a process of elimination a substantial part of the debt is established that the cause of action would still survive.

(3.) IN fairness to the respondent's learned Counsel, I must concede that normally a Court would expect the petition to be very clear and very exact with regard to the correct quantum of the debt because this is not a civil suit and the Court does not embark upon the procedure of recording evidence and examining the documents and in this background, if there are variations, discrepancies or doubts, there may be situations in which a Court would dismiss the petition outright on the ground that it would be necessary to reconcile the exact position in the course of a regular trial or enquiry. At the same time, the Courts have taken cognisance of the attendant situation which is more akin to the realistic and practical view of the matter insofar as in the course of business transactions, there may be various additions, alterations and the like over a period of time and therefore, it would be open in a given situation for the respondent to demonstrate to the Court that the outstanding pleaded is not the correct one. The typical situation is where a payment has been made and which has not been accounted for or reflected and where certain credits have got to be adjusted and this is a matter of simple mathematics and to my mind would not be fatal to the petitioner. All that the Court has therefore got to adopt is a simple process of reconciliation and if through such a process it is possible to quantify the outstanding, then the petition would still survive. In the present case, I have looked at the nature of the objection pleaded under this head and I do not find any real difficulty in being able to quantify the exact and correct outstanding as per the record. This objection therefore does not survive.