J.C. Engineers P. Ltd. vs Kay Iron Works P. Ltd. and Another

M.M. Kumar, J.—The instant appeal has been filed u/s 483 of the Companies Act, 1956 (for brevity "the Act") challenging the order dated March 31, 2005, passed by the company judge disposing of the winding up petition filed by the appellant without granting the relief of winding up. A further prayer has also been made for setting aside the order dated May 12, 2005, passed by the learned single judge whereby the application for recalling the order dated March 31, 2005, has also been dismissed.

The appellant had approached the company judge with a prayer for winding up of the respondent-company alleging that the respondent-company is unable to pay its debt. The appellant has made a claim for Rs. 7,10,159.71, which was, allegedly not being paid. The learned single judge recorded a finding that the aforesaid claim of the appellant has been disputed on the ground that the goods supplied by the appellant were defective and a debit note was issued to the appellant in respect of the aforesaid amount and offer was made to return the goods. However, the liability to pay a sum of Rs. 47,019.71 was conceded and the respondents offered to pay the aforesaid amount in full and final settlement. The respondent-company had agreed and paid the amount of Rs. 47,019.71 within a period of one month from the date of passing of the order eventually without any conditions. The fact with regard to payment has not been received without prejudice to its other claim.

We have heard learned Counsel for the parties at a considerable length and are of the view that it is not a case of admitted liability. The goods supplied by the appellant were rejected by the respondents allegedly in pursuance of some stipulations between the parties. It cannot be concluded by any stretch of imagination that the amount claimed by the appellant is an admitted amount. Even otherwise, the respondents are a running solvent unit and it cannot be concluded that they are unable to pay their debt. In such a situation, no order for winding up could be passed.

For the reasons aforementioned, this appeal fails and the same is dismissed.

However, we make it clear that the appellant shall be at liberty to avail any other remedy for realisation of its dues, if any, in accordance with law.