1. The present petition has been filed by the petitioner for an appropriate order of winding up of the respondent-Company-Arfees Industries Limited under the provisions of the Companies Act, 1956 (hereinafter referred to as the 'Act').
2. It is the case of the petitioner that an amount of Rs.14,02,243/- inclusive of interest as on 31.12.2006 with further running interest at the rate of 24% per annum till realisation, is due and payable by the respondent-Company to the petitioner for the job work done by the petitioner as per agreement 03.03.2006 between the petitioner and the respondent-Company.
3. The record of the petition reveals that the petitioner entered into an agreement with the respondent-company for undertaking job work for the conversion of the respondent's material of PTA and MEG into polyester chips which were delivered to the respondent-company from time to time. It is case of the petitioner that the job work was carried out by the petitioner as per the requirements of the respondent-company and accordingly, quantity of polyester chips were delivered to the respondent-company. It is the case of the petitioner that it is not in dispute that the respondent-company has received and utilised the final product i.e. polyester chips. It is the case of the petitioner that as per the agreement, periodical invoices were raised and accordingly, three invoices were raised by the petitioner for the period from 05.03.2006 to 15.03.2006. It is the case of the petitioner that the respondent-company issued four cheques bearing Nos.068152,068153,068154 and 068169 total aggregating to Rs.11,82,968/- drawn on Andhara Bank, Nanpura, Surat against the entire outstanding amounts. It is the case of the petitioner that at the oral request made by the respondent, those four cheques were not presented for realiasation and were returned back to the respondent-company. Again, fresh cheque bearing No.68608 dated 07.05.2006 for the entire amount of Rs.11,82,968/- was issued and at the request of the respondent-company, the said cheque was not presented. It is the case of the petitioner that the respondent-company thereafter, issued two fresh cheques bearing Nos.68628 and 68629 drawn on Allahabad Bank for the amount of Rs.6,00,000/- and 5,82,968/- respectively aggregating Rs.11,82,968/-. It is the case of the petitioner that the said cheques were presented by the petitioner in the Bank. However, both the cheques were returned with a remark 'Exceeds Arrangement'. The petitioner has also further relied upon TDS certificate dated 27.04.2006 issued by the company evidencing its liability to make payment as per the invoices.
4. It is the case of the petitioner that as the cheques were returned as aforesaid, the petitioner addressed a statutory notice dated 02.01.2007 claiming an amount of Rs.11,82,968/- and further amount of Rs.2,19,275/- as interest at the rate of 24% per annum upto 31.12.2006 total aggregating Rs.14,02,243/-. It is also evident from the said statutory notice that the petitioner also raised claim of running interest at the rate of 24% till realisation. It bornes out from the record that the said statutory notice was served upon the respondent-company and it was returned back by the Postal Department with an endorsement 'left'. It is also the case of the petitioner that on 04.04.2006, one Surat Textile Mills Limited addressed a letter which is also evidencing the purchase of raw material by the respondent-company.
5. It appears from the record that the petitioner thereafter, filed the present petition wherein, this Court (Coram: M.R. Shah, J.) vide order dated 04.05.2007 was pleased to issue notice, making it returnable on 22.06.2007.
6. In response to the notice issued by this Court, the respondent-company has filed affidavit-in-reply. It transpires from the affidavit-in-reply that the respondent-company has denied that sum of Rs.14,02,243/-
inclusive of interest as on 31.12.2006 with further running interest at the rate of 24% per annum is still due and payable. The respondent-company also relied upon the documents as well as the reply given to the statutory notice through its advocate dated 12.02.2007. The respondent-company has admitted that it has placed orders and purchased the materials. However, the respondent-company has inter alia contended that the cheques issued by it were not in satisfaction of debts but by way of a security and has taken the contention that all the entries are paper entries. However, in paragraph No.13 of the affidavit-in-reply, while dealing with the contents of paragraph No.16 of the petition, the respondent-company contended that the payment of Rs.14,02,243/- is not towards part payment and it is full and final payment for the goods actually ordered and received by the respondent-company from the petitioner-company.
7. The present petition was admitted on 07.09.2009 along with Company Petition No.95 of 2007 filed against the respondent-company by aforesaid Surat Textile Mills Limited wherein, this Court (Coram: Jayant Patel, J.) was pleased to pass the following order:-
"It has been stated on behalf of the respondent company by Mr. Ketan Shah for Mr. Tushar Mehta that one of the Company Petitions No. 200 of 2007 for winding up of the respondent company has already been admitted on 22nd August, 2008.
Hence, Admit.
Office to place all the three matters on Board on 10th September, 2009."
8. It further transpires that thereafter, the present petition along with Company Petition No.95 of 2007 was listed for hearing on 31.01.2011 wherein, this Court (Coram: Anant S. Dave, J.) was pleased to pass the following order:-
"Heard the learned Advocates for the parties.
In this petition, the petitioner-company has made the following prayers :
"17.A) The Company Arfees Industries Limited, be wound up by this Hon'ble Court under the provisions of the Companies Act, 1956;
(B) That the Official Liquidator attached to this Hon'ble Court be appointed as the Liquidator of Arfees Industries Limited, the Company above named with all necessary powers under the provisions of the Companies Act, 1956;
[C] Pending hearing and final disposal of the petition the Company be restrained from alienating, dealing with and/or disposing off its properties.
(D) Pending the hearing and final disposal of the petition, the Official Liquidator attached to thhis Hon'ble Court be appointed as Provisional Liquidator of Arfees Industries Limited, together with all its assets, property, stock in trade, outstanding, book debts, receivable, papers, documents, vouchers, etc. with all the powers under the Companies Act, 1956;"
The matters were admitted by this Court on 7.9.2009 (Coram: Hon'ble Mr Justice Jayant Patel) by passing the following order:
"It has been stated on behalf of the respondent company by Mr Ketan Shah for Mr Tushar Mehta that one of the Company Petitions No.200 of 2007 for winding up of the respondent company has already been admitted on 22nd August, 2008.
Hence, Admit.
Office to place all the three matters on Board on 10th September, 2009."
2. Since the matters are admitted and looking to the facts and circumstances the provisions of section 433 of the Companies Act are attracted, the following order is passed:
3. The hearing of the petitions for winding up are finally fixed on 8th March, 2011. The advertisement about hearing of the petitions is to be published in two daily newspapers one in English and one in Gujarati namely, "Indian Express" and "Divya Bhaskar" both of Surat Edition. Publication of the notice in the Government Gazette may be dispensed with."
9. As per order dated 31.01.2011, an advertisement about hearing of the petitions was published in 'Indian Express' English daily and 'Divya Bhaskar' Gujarati daily both Surat Edition on 05.02.2011. The authorised person of the petitioner-company has filed affidavit of publication of notice along with the newspaper cuttings of the advertisement published in 'Indian Express' and 'Divya Bhaskar' both Surat Edition on 05.02.2011.
10. Considering the facts and circumstances of the petition, the defence of the respondent-company is without any substance and is not a defence in good faith. Except the denial and contention that the entries are paper entries, the respondent-company has not been able to put any defence which requires consideration. On consideration of the contentions put forward by the learned counsel for the parties and considering the documents produced in the present petition, the petitioner has made out sufficient grounds for winding up of the respondent-company under Section 433(e) of the Act. Ms.Minoo Shah, learned counsel appearing for the petitioner-company relying upon the averments made in the petition and the documents on record, submitted that the respondent-company has committed defaults when the cheques issued by it were dishonoured on presentation and in spite of repeated requests and assurances, no payment is made. The contention raised by the respondent-company that the cheques were issued as a matter of security is without any evidence and is hardly believable. It is contended on behalf of the petitioner-company that the respondent has neglected to pay the dues of the petitioner and that the respondent-company has lost its financial substratum and is required to be wound up. Mr.Ketan Shah, learned counsel appearing for the respondent-company has not been able to negative the contentions raised by Ms.Minoo Shah, learned counsel for the petitioner. The respondent-company has not even come up with a case that the respondent-company is a profit making company. Thus, it appears that the respondent-company has lost its financial substratum and is not in a position to pay dues to its creditors inclusive of the petitioner-company.
11. As stated above, the advertisement of hearing was published in two newspapers i.e. 'Indian Express' English daily and 'Divya Bhaskar' Gujarati daily both Surat Edition on 05.02.2011. However, in response to the said publication, no one has come forward to oppose the winding up petition.
12. In view of the above, the respondent-company is required to be wound up as it has failed to discharge its liabilities.
13. Accordingly, the respondent-company is ordered to be wound up. The Official Liquidator attached to this Court is appointed as Liquidator of the respondent-company i.e. Arfees Industries Ltd. The Official Liquidator is directed to take possession of the property both movable and immovable of the respondent-company along with its bank accounts, cash and account books etc. The Official Liquidator shall submit his report within a period of three months. If required, the Official Liquidator can take service of the official valuer for the purpose of preparation of the possession note etc.
14. The petition stands disposed of accordingly.
(R.M.CHHAYA, J.) Hitesh Top