I.S. Tiwana, J.@mdashThis petition is under Sections 433/434 read with Section 439 of the Companies Act, 1956, for the winding up of the respondent-company as, according to the petitioner, it is not in a position to clear off its debts and to meet other liabilities. The case in a nutshell is that the company owes Rs. 7,55,760.40 to the petitioner-firm on account of the price of the material/goods supplied to it.
2. As per the practice of business prevalent between the parties, the petitioner-firm would send quotations of the material to be purchased by the company and, in turn, the company would send the purchase orders mentioning the price of the material/goods along with the terms of payment. On receipt of these orders, the petitioner would supply the articles ordered along with a duplicate copy of the challan. The said challan used to be signed by the competent official of the stores department of the company on receipt of the goods. Later, the payment used to be remitted by the company to the petitioner. At times, in case of urgency, the company would even collect the material or goods from the petitioner without any formal purchase order or a challan but the bills concerning these supplies were always duly signed by the official of the company. On the basis of the book entries, a statement of account (annexure P-2) has been prepared for the year 1986-87 and as per the same, the abovesaid amount is standing due to the petitioner. In spite of repeated requests, he failed to clear off its accounts. Instead, in reply to the notice, annexure P-90, the company sent a telegram dated November 23, 1988, disputing the claim of the petitioner on the ground that it had been prepared fictitiously with a view to harm the reputation of the company. Besides this, a few other amounts, the details of which are mentioned in paragraphs 10 to 13 of the petition, are also due to the petitioner from the companion account of various goods supplied subsequent to April 1, 1987, and due to miscalculations or mistakes committed in certain bills issued by it. Qua these amounts which, according to the petitioner, are disputed amounts, it reserves its right to recover the same through appropriate proceedings in a proper forum.
3. As against this, the respondent-company, while admitting its business dealings with the petitioner firm, maintains that the quality of the goods supplied by the petitioner and the market rate mentioned in the bills issued on its behalf had to be checked on receipt of the goods by the respondent and the bills used to be paid later in due course. It is further maintained on its behalf that whenever the goods were not up to the standard or the petitioner had mentioned a higher rate than the market rate of the goods supplied, the petitioner would take back its goods, cancel the bills and rectify the accounts. As per the running account of the company, an amount of Rs. 3,62,830.49 was due and payable to the petitioner-firm. The respondent not only expressed its readiness and willingness to pay this amount but has actually paid the same through different cheques to the petitioner during the course of these proceedings. While denying the rest of the claim of the petitioner, it is highlighted on behalf of the respondent that either the goods supplied by the petitioner were not up to the prescribed standard or the rate sought to be charged was highly excessive or was over and above the market rate. A few instances have been specified in paragraph 3 of the written statement to show that the petitioner-firm had either rectified the bills or had failed to submit the correct bills. As a matter of fact, some such mistakes have even been admitted in the petition itself. Therefore, the company refuses to accept its liability to pay the above-noted amounts as claimed by the petitioner.
4. One of the claims of the petitioner is that, on account of the failure of the company to supply Form ''C'' in order to claim the concessional rates of sales tax on the goods supplied to the company for the years 1986-87, 1987-88 and 1988-89, the petitioner is entitled to recover Rs. 1,67,570.78. Reply to this claim of the petitioner is that "the respondent is always ready and willing to supply all ''C'' Forms for those bills where payments are being made and bills accepted. But the petitioner is not prepared to accept piecemeal ''C'' Forms and wants ''C'' Forms also" for the bills where the amounts are disputed. It is further highlighted on its behalf that the respondent is a company with a share capital of rupees fifty crores and during the year ending March 31, 1989, it had a turnover of Rs. 110 crores. Its cash credit limits with various banks are to the tune of Rs. 28 crores. In the light of these facts, it is clear that the company is not financially broke. To support this financial status, the company even produced a certificate from the Allahabad Bank saying that they are always ready and "willing to pay any amount that may be required to be paid" and can stand guarantee for the same. In order to fortify its plea that it is a company of substance, it has tagged its annual report for the year 1987 as annexure P-1 to the written statement.
5. Having considered the various submissions of learned counsel for the parties in the light of their respective pleadings, I am of the view that the petitioner deserves to be non-suited, as there is hardly any material to show that the company is unable to pay its debts or that the dispute raised by the company to the claim petition is devoid of bona fides. As has been pointed out above, the respondent-company has not only cleared off its liabilities to the tune of Rs. 3,62,830.49 during the pendency of these proceedings but has even produced a certificate from the Allahabad Bank to say that the bank was "willing to pay any amount that may be required to be paid" by the company and that it can stand guarantee for the same. I am, therefore, satisfied that the petitioner has miserably failed to show that the respondent-company is commercially insolvent, that is to say, that its assets are such and its existing liabilities are such as to make it reasonably certain that the existing and probable assets would be insufficient to meet the existing, liabilities. Further, I am equally of the opinion that the defence raised by the company in disputing the claim of the petitioner cannot be said to be devoid of bona fides. Therefore, this petition is dismissed.
