OFU LYNX LTD Vs. SIMON CARVES INDIA LTD

JUDGEMENT

(1.) This is an application by Ofu Lynx Limited (hereinafter referred to as the company) for an order that the petition for winding-up of the company pre-sented by the respondent Simon Carves India Limited also a company (and hereinafter referred to as the respondent) be dismissed and/or stayed permanently.

(2.) The respondent claims to be a Creditor of the company for a sum of Rupees 8,32,400.43 paise, The respondent had caused a notice to be served on the company under Section 434 of the Companies Act, 1956 demanding payment of the said sum of Rs. 8,32,400.43 paise together with interest. On the expiry of the prescribed period of three weeks the respondent has presented, the petition for the winding-no of the company on the allegation that the company is unable to pay its debts. After the petition presented by the respondent for the winding-up of the company has been admitted by this Court, the company has made this application for an order that the said petition presented by the respondent be dismissed or permanently stayed. The company has obtained an interim order of stay of further proceedings of the said petition for winding-up.

(3.) The main ground oa which the company has made this application is that the winding-up petition presented by the respondent is an abuse of the process of this Court and is not maintainable, as there is no debt due and payable by the company to the respondent. It is contended on behalf of the company that the claim made by the respondent is seriously in dispute and there is a bona fide dispute with regard to the claim of the respondent. It is the contention of the company that as there is a genu-ine dispute with regard to the claim of the company and the alleged debt of the company is disputed bona fide by the company, the petition for the winding-up of the company cannot be entertained. It has also been contended that the respondent has presented the winding-up petition mala fide with the intention of humiliating the company which is a rival of the respondent in its trade. Mr. S. C. Sen, learned Counsel appearing in support of this application has submitted that the alleged claim of the plaintiff arises in respect of works of construction done on the basis of contracts between the parties. He has submitted that although on the basis of the value mentioned in the contracts between the company and the respondent the company has to pay a sum of about Rupees 12 Lakhs in respect of the works covered by the contracts between the parties, the company has already paid about Rupees 13 Lakhs to the respondent. It is his submission that the claim for the further sum of Rs. 8,32,400,43 paise is absurd, excessive and exorbitant and the company has no liability to pay the said sum or any portion thereof to the respondent. He has argued that in any event the sum claimed by the respondent is disputed bona fide by the company and so long as the claim of the company is not properly established in appropriate proceedings it cannot be said that there is any debt due to the respondent and that there has been any failure or neglect on the part of the company to pay any debt due and payable to the respondent. He has drawn my attention to the contracts which were entered into between the parties and he has contended that the very nature of the contracts indicates that there is every likelihood of honest disputes and differences arising between the parties in the matter of execution of the same; and it is his contention that as disputes and differences are embedded in the contracts and contemplated by the parties themselves, the contracts provide the method as to how such disputes and differences are to be resolved by arbitration. Mr. Sen has argued that in the instant case there is a dispute with regard to the quality of works done, the quantity of works done, the rates on the basis of which bills have been made out, apart from the question of non-completion or the work by the respondent and the loss and damage suffered by the company in consequence thereof. He has argued that in the instant case out of the claim of over Rupees 8 lakhs made by the respondent, over Rupees 5 lakhs is alleged by the respondent to be payable in respect of extra works done. It is the argument of Mr. Sen that the entire claim of over Rupees 5 lakhs in respect of extra works done is disputed and there can really be no doubt with regard to the existence of a bona fide dispute of a very serious nature with regard to the same. It is Mr, Sen's contention that a claim made by the respondent on its own calculation end basis of any sum for alleged extra works done does not make the claim a valid one and does not cast any, liability upon the company to meet the same. With regard to the claim of the respondent for the remaining sum of over Rupees 3 lakhs on the basis of the bills submitted, Mr. Sen has argued that the said claim made by the respondent is bona fide disputed by the company, Mr. Sen argues that the nature of the disputes and the particulars thereof have been fully set out in the affidavit and in the annexures thereto. Mr. Sen contends that it cannot be said that the disputes which have been raised by the company, giving necessary particulars in details, are mala fide or manufactured for the purpose of resisting the claim of the respondent. Mr. Sen submits that there is no admitted claim of the respondent and the fact that the company had not raised these disputes when the respondent had been making demands, does not go to show that there were no disputes or that the claim of the respondent was being admitted by the company. He has commented that when the letters demanding payment were being written to the company by the respondent, there was normal business relationship between the parties and the company was expecting that cordial business relationship between the parties would continue till the end and the entire works would be done and the whole transaction would be completed to the satisfaction of the parties. Mr. Sen has drawn my attention to the letter dated the 8th o July, 1967 from the company to Mr. P. S. Vanchi, Dy. Managing Director of the respondent and points out that even at that point of time the company has stated that "Your bills are under verification and we are ascertaining the payments due to you". Mr. Sen has also pointed out that in reply to the statutory notice served on the company, the company has clearly and categorically raised the disputes with regard to the claim made. It is Mr. Sen's contention that whether there is any bona fide dispute to the claim of the respondent has to be judged on the merits of the case now before the Court. Mr. Sen in fact has sought to argue that in case of any land of a claim arising out of any building contract or a contract involving works of construction, there is always room for bona fide disputes between the parties and unless all such disputes are properly and satisfactorily resolved, there cannot be any debt due or payable in respect of such works of construction done and it is Mr. Sen's contention that in any such cases, a winding-up petition for any such alleged claim, should not be encouraged by Court. Mr. Sen, therefore, submits that the debt alleged by the respondent is disputed bona fide and therefore no order for winding-up of the company should be made.