ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED Vs. M/S. IHP-MEIL-KEEP-BRCPL-TAIPPL(JV)

JUDGEMENT

(1.) This appeal under Clause 15 of the Letters Patent is directed against the order dated 26.08.2014 passed by the learned Company Judge in Company Petition No.235 of 2012 whereby, the said petition filed for winding up of the Andhra Pradesh Industrial Infrastructure Corporation Limited (for brevity, 'the APIIC'), was admitted and advertisement thereof was permitted to be carried out in the event the APIIC failed to deposit the sum of Rs.8,18,36,584/- to the credit of the company petition within a time frame. Aggrieved thereby, the APIIC preferred this appeal.

(2.) By order dated 06.11.2014, the appeal was admitted and interim stay of operation of the order under appeal was granted for a period of six weeks. The said stay was extended until further orders on 18.12014. Application No.7 of 2015 was filed by the respondent, the petitioner in C.P.No.235 of 2012, to vacate the interim order dated 06.11.2014. Thereupon, this Court was informed on 206.2015 that the APIIC was attempting to make payment of the admitted amount due and the case was accordingly adjourned. Again, on 07.12015, the learned Advocate General appearing for the APIIC sought time to secure instructions as to deposit of the money due to the respondent. On a similar plea, the case was again adjourned on 29.12015. However, as no amicable settlement materialized between the parties and comprehensive arguments were advanced by both sides, the appeal is taken up for final disposal.

(3.) The APIIC, a company incorporated under the provisions of the Companies Act, 1956 (for brevity, 'the Act of 1956'), with its registered office at Parishrama Bhavan, Fateh Maidan Road, Hyderabad, invited tenders for implementing the 'Somasila Drinking Water Supply Scheme', whereby drinking water supply to Kadapa was proposed to be augmented. As the tender conditions permitted participation of joint ventures, the company petitioner joint venture was formed under agreement dated 28.07.2008 and it submitted its bid which was found to be the lowest and the APIIC accordingly awarded the contract in its favour. The company petitioner entered into an agreement with the APIIC on 24.09.2008. Under this agreement, the company petitioner was to undertake manufacturing, supplying, lowering, laying, jointing, testing and commissioning of 2200 millimetre dia MS pumping main with cement mortar factory in-lining and out-coating and other appurtenance from the proposed intake well near old Madhavaram on the foreshore of Somasila Reservoir to the proposed sump at Kanumalonipally on Kadapa-Rajampet Highway, including maintenance and operation for a period of 24 months (defect liability period) under Package-I. The approximate value of the work to be done was Rs.267,38,71,778/-. The stipulated period for completing the project was 12 months. The company petitioner furnished five bank guarantees equivalent to 2?% of the contract value valid till completion of the original defect liability period. The company petitioner also submitted bank guarantees for a mobilization advance of Rs.26,75,03,538/-, but the APIIC failed to remit the mobilization advance, resulting in expiry of these bank guarantees. However, as the APIIC assured the company petitioner that prompt payment of bills would be made, it was persuaded to commence the work without a mobilization advance and executed work of the value of more than Rs.15.00 crore against supply of pipes and Rs.25.00 lakh against execution of civil work. According to the company petitioner, as per Clause 68 of the agreement, Running Account (RA) bills raised by it for the work executed were to be paid within 14 days from the date when such bills were raised. The company petitioner claimed that it submitted two RA bills for a net amount of Rs.13,39,04,368/- on 27.02.2009 and 22.05.2009. These bills were certified by the Zonal Manager, APIIC, Kadapa, on 27.02.2009 and 22.05.2009 respectively. However, the APIIC made only part-payment and released in all a sum of Rs.5,20,67,784/-, leaving a balance of Rs.8,18,36,584/-. The company petitioner claimed that despite several efforts and attempts on its part to secure the balance amount, the APIIC failed to discharge the same. Reliance was placed upon the letter dated nil-7-2011 of the Zonal Manager, APIIC, Kadapa, admitting liability in this regard. The company petitioner claimed that though it maintained good progress in execution of the work, officials of the APIIC asked it to stop and not to proceed further in December, 2009. The company petitioner claimed that due to this sudden stoppage of payments and the work, its men and machinery were left idle and it was constrained to leave the work midway. The Managing Director of the APIIC addressed letter dated 18.01.2012 to the company petitioner acknowledging and confirming liability as to the amount outstanding and informing it that upon receipt of funds from the Government, the bills would be cleared and a decision would be taken on the subject scheme. Statutory notice dated 11.09.2012 was issued to the APIIC under Section 434 of the Act of 1956 calling upon it to pay the outstanding balance of Rs.8,18,36,584/- within 21 days. The APIIC, having received the said notice, did not choose to either pay the amount or respond thereto. Thereupon, the company petitioner approached this Court under Sections 433 and 434 of the Act of 1956 praying for winding up of the APIIC.