B VISWANATHAN Vs. SESHASAYEE PAPER AND BOARDS LIMITED

JUDGEMENT

(1.) THIS is a petition under sections 433(e) and (f), 434(1)(a) and 439(1)(a) and (b) of the Companies Act, 1956, for winding up of the respondent-company. It is stated in the petition that the respondent is justly and duly indebted to the petitioner in a sum of Rs. 1, 36, 525 being the amount due on account of failure in supplying seven tonnes of paper in spite of receiving money in advance for ten tonnes, compensation for loss due to breach of contract and expenditure caused by the respondent to the petitioner. According to the petitioner, he approached the respondent for supply of ten tonnes of 10 kg. poster paper and paid an advance of Rs. 1, 78, 200 on June 21, 1989. The said money was paid by means of a demand draft drawn on the Bank of Baroda, Vellore branch, in favour of the respondent. It is the further case of the petitioner that the company supplied only three tonnes of paper and failed to supply the remaining seven tonnes. The value of three tonnes of paper is only Rs. 53, 070 excluding tax. On account of the non-supply of seven tonnes of paper by the respondent, the petitioner could not fulfil his obligation towards his customer, one Royal Agencies, with whom the petitioner had entered into a contract for the supply of ten tonnes of paper.

(2.) THE petitioner states that he had incurred a loss of Rs. 10, 395 due to the breach of contract committed by the respondent. A notice of demand was issued through an advocate by the petitioner on September 9, 1989, for which the respondent sent an evasive reply. This notice was issued under section 434 of the Companies Act. In the above circumstances, the petitioner prays for the winding up of the respondent-company.

(3.) THOUGH the petition refers to section 433(f) of the Companies Act, learned counsel for the petitioner, confined his case only to sub-section (e) of section 433 of the Companies Act, hereinafter referred to as "the Act". Therefore, the present petition is based on the ground that the respondent is unable to pay its debts. According to the respondent, there is a bona fide dispute about the debt.