KARPARA PROJECT ENGINEERING SURAT Vs. BALLARPUR INDUSTRIES LTD

JUDGEMENT

(1.) Present company petition under section 434 of companies Act, 1956 is filed by petitioner M/s Karpara Project Engineering, the partnership firm (petitioner Firm hereafter) against the Company by name ballarpur Industries Ltd. registered under the provisions of Companies Act, 1956. Said Company is having its registered office within jurisdiction of this (Nagpur) Bench of Bombay High Court and is referred to as respondent company hereafter.

(2.) After hearing arguments of learned counsel representing the petitioner firm and the respondent Company, I find that facts leading to filing of present application are not very much in dispute. Petitioner Firm carries on business of erection, testing, commissioning, installation, dismantling, reconstruction or re-assembly of power plants, boilers etc. They had undertaken job of dismantling existing boiler and erection of new recovery boiler for respondent Company at their Sewa unit in Gangapur, Joypore, Orissa. They state that job has been carried out satisfactorily and completed in August, 1994 but their dues of Rs. 41,50,192/-only with interest on it have not been paid by respondent-Company. Hence they filed Civil Suit 623 of 1997 before Hon'ble High Court, Madras claiming Rs. 62,66,790/-only with interest and by the judgment dated 17-7-2001 got decree for Rs 92,89,721. 59/- only with interest at 18% per annum on Rs. 41,50,192/-from 17-7-2001 till realisation and costs of Rs. 1,56,206/ -. As said amount was not paid in spite of repeated requests, petitioner sent notices through their advocates on 30-8-2004 and 5-12-2004 and called upon respondent to pay the amount within statutory period of 21 days warning that otherwise legal action for winding up would be initiated. As there was no payment and Company neglected to pay, petitioners forwarded notice through advocate on 27-9-2005 again calling upon Company to make the payment and clarified that otherwise they would be initiating winding up proceedings. Respondent Company through its reply dated 14-10-2005 denied the claim of petitioner though they admitted passing of decree against them. They pointed out that they filed 2 applications and 2 appeals against said decree. Hence according to petitioner Firm respondent Company is unable to pay its debts and is deemed to be unable to pay the same necessitating passing of appropriate orders for its winding up. Application also mentioned that present management of Company is frittering away and dealing with its assets in a manner and with a view to wrongfully and illegally deprive petitioner Firm of their just and rightful dues. It is also pleaded that liabilities of respondent company far exceed its real and available assets and said assets are insufficient to meet the liabilities of respondent. It is also pleaded that Official Liquidator therefore needs to be appointed as interim Liquidator immediately. In its reply affidavit respondent Company has accepted the fact of passing of decree by Madras High Court but has stated that it is ex parte decree and they have preferred Appeal 39 of 2005 against it and on 22-3-2005 High Court has issued notice to present petitioner. It is stated that amount is not due and also disputed one. They point out that advocate appointed by them before Madras high Court could not attend the case because of paralytic stroke and judge hearing the matter refused to grant adjournment which ultimately resulted in passing of ex parte decree against them. It is their defence that as per job order petitioner was supposed to complete the work by October, 1993 but it has been completed in August, 1994. They further state that petitioner submitted bills for rs. 44. 50 Lakhs which were approved for Rs. 44. 25 Lakhs and respondent paid 40 lakhs to petitioner and debited sum of Rs. 4. 49 Lakhs towards cost of consumables supplied to petitioner by respondent. Amount of Rs. 2. 18 lakhs was paid directly to one of the vendors as radiographic charges at the instance of petitioner. According to respondent amount of Rs. 2. 42 lakhs has been paid over and above the amount initially agreed between parties. They further state that 10% of the entire amount i. e. Rs. 5 lakhs was payable to petitioner on their furnishing performance guarantee which they never furnished. They also point out that they are making profits every year running into several Crores and hence no inference as required by section 434 of Companies Act can be drawn in the matter. Petitioner has filed rejoinder and stated that in appeal filed by respondent no stay has been granted by Madras High Court. They point out that respondent was served with summons of Civil Suit filed before Madras High Court but chose not to participate in proceedings. They also point out that Madras High Court has refused to set aside ex parte decree. To this rejoinder, respondent Company has again filed reply reiterating its earlier stand.

(3.) I have heard Advocate A. S. Chandurkar for petitioner Firm and advocate Sunil Manohar for respondent Company in this background.