M ELIAS PRIVATE TLD Vs. RAJ MOHINI JHAMB

JUDGEMENT

(1.) THIS appeal is directed against the order passed by the Company Court on an application presented by the respondent for winding up the appellant company on account of its inability to pay its debts. By that order the court directed permanent stay of winding up proceeding on payment of the disputed amount to the solicitor of the petitioning creditor. The relevant facts, as stated in the petition in short, are as follows. The petitioning creditor, who is the respondent before us had been a supplier of petroleum and allied products as also of motor accessories to the company in terms of a written agreement dated November 30, 1965 on credit. She also carried out repairs to its motor vehicles. The bills in respect of such supplies and repairs were submitted in the usual course to the Company which duly accepted the same. A sum of rs. 8000/- was paid by the Company on november 11, 1971 which was duly credited in the account and confirmed by the respondent on February 17, 1972. The Company from time to time made payments and after crediting all payments a sum of Rs. 11738. 99p. became due and payable by the Company to the respondent. The Company failed and neglected to pay the same or any part thereof inspite of demands. On or about March 20, 1972 the Company represented that it was in temporary financial difficulties and would pay, the dues shortly. To show its bonafides the company made over possession of its lorry WBL-894 at the respondent's petrol pump, thereby creating, with the respondent's concurrence, a security on, the same by way of pledge or hypothecation. In breach of the under-taking the company on March 23, 1972 sought to obtain possession of the said truck by sending a post-dated cheque for Rs. 3000/-which was dishonoured. The Company however wrongfully started criminal proceeding against the respondent employees under sections 341/403 /427, of the Indian Penal Code and a search warrant was issued for the vehicle. The criminal proceeding, as it transpires, was ultimately quashed by this Court. The possession of the lorry was given back to the Company.

(2.) THE respondent on April 4, 1972 issued a notice of demand under section 434 of the Companies Act through her solicitor Khaitan and Co. demanding payment of the aforesaid sum with interest. In the said notice the particulars (viz. No. of the bills dates and amounts)constituting the Company's debt to the petitioner were set out. The Company in its reply of April 24, 1972 disputed all allegations made in the notice. It was said, the Company was busy with the criminal complaint filed on March 29, 1972 against the employees of the respondent and would revert to the same in course of the week. The application, it appears, was filed thereafter on or about May 29, 1972 praying that tie company be wound up by this Court under the provisions of the Companies act, 1956.

(3.) AFTER the petition was admitted and before direction for advertisement was issued the Company filed an affidavit in-opposition with leave of Court contending that the application should he dismissed and no direction for advertisement should be issued as the proceeding was an abuse of the process of Court it was stated in the said affidavit that the respondent wrongfully disputed payments amounting to Rs. 8000/- made by cheques by the Company earlier which however was ultimately admitted by the respondent as late as February 17, 1975 the Company not only made payments duly but at times advanced huge amount there were mistakes and discrepancies in the bills submitted by the respondent who did not co-operate with the Company "in straightening the accounts' amicably. On February 23, 1972 the respondent informed that a sum of rs. 9604-22 was outstanding as on december 31, 1971 and further a bill for rs. 2384. 96 was also unpaid. Inspite of requests and personal contacts no particulars were furnished for scrutiny. The company paid a further sum of Rs. 2500 /-, as it appears, after its cheque for the amount was dishonoured. The Company had always been ready to settle the accounts which however was made impossible by the respondent. The Company disputed the claim made by the respondent. On March 20, 1972 the respondent asked for confirmation of the balance of rs. 14,267. 54 in the account as on february 28, 1972 and on the same day in the morning when the Company lorry WBL 894 called at the respondent's petrol station for petrol, the vehicle was wrongfully taken possession of by the respondent and was detained. The Company, to settle the matter amicably, offered to pay Rs. 3000/- and on the respondent's agreeing, sent a cheque for the amount and asked for reconciliation of the account. As the respondent in breach of the agreement refused to release the lorry while retaining the cheque, the Company stopped payment of the cheque, and failing in its efforts to settle the whole dispute, initiated the criminal proceeding referred to above. The material allegations in the petition were denied and it was reiterated that there was a serious and bonafide dispute between the parties regarding the claim. The application, it was submitted, was an abuse of the process of court and should be dismissed.