FALCON GULF CERAMICS LTD Vs. INDUSTRIAL DESIGNS BUREAU

JUDGEMENT

(1.) A petition, under S. 434 of the Companies Act (hereinafter to be referred to as 'the Act'), was filed by industrial Designs Bureau for winding up of Falcon Gulf Ceramic Limited. The respondent entered into a Consultancy Services Contract with the appellant-company for layout, drawings, engineering, tender-invitation and supervision of construction of its factory, office and connected buildings of their project in Plot No. 223 to 226, Matsya Industrial Area, Desula, Alwar. The appellant-company was registered under the Companies Act vide Certificate of Incorporation No. 3461 of 1985-86 dated 29-11-1985 as a public company limited by shares. On the basis of tenders received, the work for the construction of the factory, office and buildings connected with the project of the company at Alwar was awarded on 15-6-1987 to M/s. Nucon India Pvt. Ltd., a Construction Contractor. The work under consultancy services contract stood completed on 14-5-1991. Prior to submission of the final bill for consultancy work, the credit balance of the respondent with the appellant-company was Rs.1,76,646.41 which had been outstanding since 31-1-1990.

(2.) The respondent gave a notice under S. 434 of the Act dated 19-5-1991 claiming the aforesaid amount. The notice was received by the appellant-company on 25-5-1991. The company wrote in reply after the receipt of the notice under S. 434 of the Act that "the Company has been incurring losses from its inception and hence, the cash flow of the Company is under heavy strain". It is added that "although efforts are afoot to arrest the losses, no significant break through has been achieved". The respondent despite the repeated request could not receive the amount due to it from the appellant-company which was as stated above in the sum of Rs. 1,76,646.41 filed the petition giving rise to the present appeal under S. 434 of the Act claiming that the appellant-company be wound up compulsorily.

(3.) When the petition bearing No. 12/ 1991 was presented in this Court, Hon'ble Mr. Justice M. B. Sharma, who was the learned Company Judge, passed the following order on 12-7-1991