SHARMA, J. - (1.) THE petitioner, a technical consultant, has approached this court with the following prayer:- (i) THE respondent company Umang Boards Pvt. Ltd. , be wound up by the court under the provisions of the Company Act, 1956. (ii) A liquidator be appointed to take over the charge of the Company. (iii) Payment of Rs. 11,00,000/- along with interest @ 18% p. a. from August, 2002 be made to the petitioner.
(2.) UPON failure to honour the consultation fee the petitioner gave a statutory notice to the respondent company (for short `company') under section 434 of the Companies Act, 1956 (for short `the Act'), demanding due payment towards principal amount with interest but the respondent company failed to make payment within statutory period, as a result of which the petitioner was led to file instant company petition for winding up under Section 439 with 433 (e) of the Act. It is averred in the petition that the company approached the petitioner for providing technical consultation in order to set up the Insulation Board project at Kaladera, Rajasthan and an agreement was executed on July 13, 2000 wherein it was agreed upon between petitioner and company that the petitioner would be entitled to consolation fees of 3% of the total project cost which would be paid 25% after commissioning of the plant and the balance 15% after commercial production but the company failed to abide by agreed schedule and only made payment of Rs. 4,00,000/- and sum of Rs. 11,00,000/- remained outstanding. The company disputed the debts claimed by the petitioner and pleaded that the winding up petition has been filed as a cloak to hide the breach and dereliction committed by the petitioner himself. Besides disputing the debt, the Company stated in the reply that it is financially solvent and is a profiteering company having net assets more than the liabilities. It is further contended that despite payment of Rs. 4 lacs towards his fee, the petitioner betrayed the trust and committed professional misconduct by not making the plant fully operational with satisfactory commercial production in as much as the consultancy services provided by the petitioner was not upto the mark, further it was instructed to one unit i. e. Pre-compressed press Board only. The quality of press Board was not as per specification and that incurred claim for damages and reimbursement by the purchasers of the product, one amongst them being Kirlosker Power Equipment Ltd. Because of poor and inferior commercial production of the press Board the Kirlosker PE Ltd. Withheld the payment Rs. 7,35,393/- and issued debit note on January 29, 2001. The Company further stated that the equipments recommended by the petitioner were not as a requirement of the plant and the company had to replace them incurring extra payment of Rs. 3. 5 lacs. The petitioner being not entitled to any payment from the company cannot pleaded that the company failed and neglected to pay the amount or is deemed to be unable to pay its debts. In support of the contentions various documents have been filed by the company. The petitioner firm filed rejoinder to the reply reiterating the facts stated in winding up petition. I have given my thoughtful consideration to the arguments advanced before me by learned counsel for the parties and scanned the documents placed on record.
(3.) THE circumstances under which the court is justified in ordering winding up of the company have been considered by the Hon'ble Supreme Court in various decisions. In Mediquip Systems vs. Proxima Medical System (2005) 7 SCC 42, the Apex Court propounded as under:- (Para 18) "this court is a catena of decisions has held that an order under Section 433 (e) of the Companies Act, is discretionary. There must be a debt due and the company must be unable to pay the same. A debt under this section must be a determined or a definite sum of money payable immediately or at a future date and that the inability referred to in the expression "unable to pay its debts in Section 433 (e) of the Comparies Act should be taken in the commercial sense and that the machinery for winding up will not be allowed to be utilised merely as a means for realising debts due from a company. " In M/s. Madhusudan Gordhandas vs. Madhu Woollen Industries (1971) 3 SCC 632, their Lordships of the Supreme Court indicated in paras 20 and 21 thus:- " 20. Two rules are well settled. First, if the debt is bona fide dispute and the defence is a substantial one, the court will not wind up the company. The court had dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. See London and Paris Banking Corporation (1874) LR 19 Eq 444), Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been properly was not allowed. See Re. Brighton Club and Horfold Hotel Co. Ltd. (1865) 35 Beav 204 ). 21. Where the debt is undisputed the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt, see Re. A Company (94 SJ 369 ). Where however there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantify the debt precisely see Re. Tweeds Garages Ltd. (1962 Ch 406 ). The principles which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends. " ;