G BABU Vs. L S MILLS LIMITED

JUDGEMENT

(1.) THIS Original Side Appeal has been filed against the order, dated 28.3.2014, made in C.P.No.183 of 2011.

(2.) IT has been stated that the appellant is the sole proprietor carrying on business in supplying of cotton, cotton bales and allied products to the spinning mills, under the name and style of K.G.Cotton Company, having its regional office at Coimbatore. The respondent company had been incorporated on 28.4.1983, and it has been functioning under the name and style of L.S.Mills Limitted. The respondent company has been purchasing cotton from the appellant company. While so, the respondent company had committed default in making its payment, in respect of the cotton supplied by the appellant company. As on 20.1.2011, a sum of Rs.29,60,795/ - remained due and payable to the appellant company, by the respondent company.

(3.) IT has been further stated that a statutory notice, dated 8.8.2011, had been sent on behalf of the appellant company, calling upon the respondent company to clear its debt, within a period of three weeks from the receipt of the said notice, with interest on the sum of Rs.29,60,795/ -, at the rate of 18% per annum, failing which the appellant company would initiate winding up proceedings against the respondent company. The said notice had been served on the respondent company, on 10.8.2011. It has been further stated that the respondent company had acted fraudulently by raising a false claim that the appellant company had failed to supply 200 bales of cotton due to which the respondent company had to purchase cotton bales from one M/s.Shri Rajendra Ginning Factory and it had incurred a loss, by doing so, to the tune of Rs.26,89,980/ - and that the respondent company was ready to settle the balance amount by making a payment of Rs.2,70,815/ -. In such circumstances, the appellant company had been constrained to file a winding up petition against the respondent company in C.P.No.183 of 2011 and C.A.No.805 of 2011 under Section 433(e) of the Companies Act, 1956.