- (1.) Alleging inability of M/s. Shiv Mahima Ispat Private Limited (hereinafter 'the respondent company') to pay its debt in due course of business despite a statutory notice and hence being deemed to be insolvent, the petitioner company Steel Authority of India Limited (SAIL) seeks the respondent company's winding up in this petition under Sections 433(e) and (f), 434 and 439 of the Companies Act, 1956 (hereinafter 'the Act of 1956').
(2.) Briefly stated the facts are that through a Memorandum of Understanding (MOU) dated 17-4-2012 the respondent company agreed to purchase 1208.01 metric tonnes of HR coils from the petitioner company (hereinafter 'the petitioner'). Pursuant thereto in December, 2012 the petitioner dispatched HR coils from its Bokaro Steel Plant to destination Kanakpura, Jaipur as designated by the respondent company by rail between December 25 and 26, 2012 through invoices Nos.50765-67, 50775, 50836 dated 25-12-2012 and 51078-81, 51085, 51088-89, 51104-06, 51109, 51111-12, 51147, 51196 dated 26-12-2012. The respondent company was required to make full payment against the aggregate value of the invoices, which it did vide cheque No.025154 dated 3-1-2013 for a sum of Rs.4,82,72,269/- drawn on YES Bank Jaipur favouring the petitioner. The invoices aforesaid and railway receipts (RR) were then endorsed in the respondent company's name and goods thereunder appropriated by it. The aforesaid Cheque towards sale consideration of the goods purchased was however dishonoured on 5-1- 2013 for the reason "Exceeds Arrangement". The petitioner in the circumstances on or about 7-1-2013 required the respondent company to make full payment of the cheque amount for the goods supplied along with interest at the rate of 24% per annum by RTGS/ Bank transfer to its account. In response, the respondent company through its written communication dated 10-1-2013 attributed the dishonour of its cheque to "some issues with its bankers" but assured that the due amount of Rs.4,82,72,269/- would be paid through RTGS/ pay order upto 20-1-2013. That was however not done despite repeated entreaties by the petitioner. In the circumstances legal notice dated 18-1-2013 was dispatched by the petitioner through its counsel to the respondent company and its directors under Section 138 of the Negotiable Instruments Act, 1881 requiring it to make payment of the amount under the dishonoured cheque. Further a notice dated 23-1-2013 under Sections 433(e)& (f), 434 and 439 of the Act of 1956 followed and was served at the respondent company's registered office. Yet the respondent company failed to pay the outstanding due debt to the petitioner. The petitioner in the circumstances appears to have filed a money suit for recovery of the due amount of Rs.4,82,72,269/- before the Additional District Judge No.6, Jaipur.
(3.) The case of the petitioner in the winding up petition subsequently filed is that the amount due and payable to it for goods supplied and still largely retained by the respondent company is an undisputed debt, which it was under a legal duty to pay but failed despite a statutory notice. This neglect to pay the due debt has rendered it "deemed insolvent" and liable to be wound up under Section 433(e) of the Act of 1956. It has also been submitted that under the circumstances it is also just and equitable in the general interest of the body of creditors of the respondent company to wind it up, such that under the protection of limited liability of the Act of 1956, the respondent company does not continue to avail credit and run up debt likely not to be paid with the detrimental consequences for the unsuspecting creditors as also smooth trade and commerce--the life blood of an economy.;