NEWFINDS INDIA Vs. VORION CHEMICALS AND DISTILLERIES LIMITED

JUDGEMENT

(1.) THIS is a petition under sections 433 (e), 434 (1) (a) and 439 (1) (b) of the Companies Act (hereinafter referred to as "the Act")for winding up the respondent-company. The allegations in the petition are, shortly, as follows: The respondent-company (Vorion Chemicals and Distilleries ltd.) having its registered office at No. 114, Mowbrays Road, Royapettah, madras-14, is a public limited company, established for processing Chemicals and other materials for industrial and agricultural purposes among other objects set out in the memorandum of association. The company was incorporated on december 26, 1966, and the company is due and owing to the petitioner-creditor a sum of Rs. 43, 343. 90, being the value of goods supplied for formulation and repacking and delivery to the customers of the petitioning-creditor, which the respondent-company failed to do. A lawyer's notice was issued on September 28, 1973, calling upon the respondent-company to pay the said sum of Rs. 43, 343. 90. The petitioner further understands that the company is heavily indebted to the tune of Rs. 40, 000 to various other parties. Even though the subscribed capital is Rs. 7, 33, 382. 50, calls unpaid by the directors and their groups beyond the stautory period came to Rs. 2, 33, 982. Hence, this petition.

(2.) IN the counter-affidavit of the respondent, filed by one of the directors, who is also the joint managing director of the company, it is denied that the respondent-company is due and owing the petitioner any sum as claimed in the petition, much less the amount of Rs. 43, 343. 90. It is further denied that the petitioner delivered to the respondent any goods for formulation, repacking and delivery to the customers of the petitioning-company. Even before the notice dated 28th September, 1972, in reply to the notice dated 31st August, 1972, it was stated by the counsel for the respondent as follows: "the allegations in paragraph 3 of your notice that your client entrusted BHC, Steattite and other stocks with M/s. Vorion industries and Chemicals Ltd. is absolutely false. If proper accounting is to be taken regarding the various transactions between your client on the one hand and our clients, Mr. P. Govindasamy, Mrs. Raji Rangachari and M/s. Vorion industries and Chemicals, on the other hand, they will reveal that, as on date, huge amounts are payable by your client to our clients. All the monies were paid for the entire stocks by M/s. Gee Aar Traders, of course under your client's firm's name known as "newfinds (INdia)".

(3.) SECTION 433 (e) of the Companies Act states that the company may be wound up by the court if the company is unable to pay its debts. As to when a company shall be deemed to be unable to pay its debts, section 434 proceeds to state that if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor.