HALEN BROTHERS Vs. MODI THREADS LTD.

JUDGEMENT

(1.) THIS company petition filed under Section 433(e) and (f) of the Companies Act, 1956, seeks an order to wind up M/s. Modi Tele Fibres Ltd., Modi Nagar, Ghaziabad, U.P. (previously known as Modi Threads Ltd., Hem Kunt Tower, 1st Floor, Nehru Place, New Delhi), (hereinafter referred to as "the respondent -company").

(2.) IN the counter -affidavit the transactions and supplies are admitted. However, in paragraph 10 it is contended that substantial part of consignment supplied by the petitioner was of very inferior and bad quality and as such the petitioner -company was requested to take back the consignment. In paragraph 13 it is reiterated that the goods of the value of Rs. 59,979 were supplied as per specification. Apart from this no other goods were accepted by the answering respondent as the same were sub -standard and not according to specifications and as such no amount, much less the amount of Rs. 12,14,505 is due and payable by the answering respondent. In paragraph 19 it is contended that the goods referred in pages 16 and 17 were returned because of the inferior quality and being sub -standard. The receipt of notice has also been denied.

(3.) THE proceedings before the BIFR establish that the respondent -company has completely lost its substratum. Shri B.K. Deb, AGM, Punjab National Bank made submissions before the BIFR that the accounts of the company did not reflect true and fair picture of the company. The company was deceiving everybody and the bank doubted the integrity of the company. The ulterior motive of the company was to get itself registered with the BIFR and to enjoy the umbrella of protection available under the Act. The company did not even pay a sum of Rs. 2 lakhs for SIP, until the BIFR insisted for making the payment. These proceedings clearly show that the net worth of the respondent -company was negative and that it has completely become insolvent and was not financially viable any more in the year 2000 when the reference was rejected. It has not brought any material on record to show any improvement in its financial condition.