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M/S JAGGI BROTHERS. versus M/S SIMBHAOLI SUGAR MILLS LTD. AND ANOTHER

High Court of Judicature at Allahabad

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M/S Jaggi Brothers. v. M/S Simbhaoli Sugar Mills Ltd. And Another - COMPANY PETITION No. 1 of 2005 [2006] RD-AH 9612 (16 May 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court No. 9

1. COMPANY PETITION NO. 1 OF 2005

M/s Jaggi Brothers, a partnership firm

registered office at 102, K.N. Modi Complex

Modi Nagar, District Ghaziabad

- Petitioner-company

Versus

M/s Simbhaoli Sugar Mills Limited

P.O. Simbhaoli, District Ghaziabad

U.P. - Respondent-company

Connected with

2. COMPANY PETITION NO. 10 OF 2005

M/s Jaggi Brothers, a partnership firm

registered office at 102, K.N. Modi Complex

Modi Nagar, District Ghaziabad

- Petitioner-company

Versus

Chilwaria Sugar Ltd., with its registered office

at Chilwaria, District Bahraich

U.P. - Respondent company

Hon'ble Sunil Ambwani, J.

1. Heard Shri Arun Kumar Gupta, learned counsel for petitioner-company and Shri Yashwant Verma, learned counsel for respondent-company.

2. These two creditor's winding up petitions have been  filed for non-payment of Rs. 3,74,481.97 inspite of statutory notice dated 8.10.2004 under Section 433 (e) and 434 (i) (a) of Companies Act 1956 given to M/s Simbhaoli Sugar Mills Ltd. And M/s Chilwaria Sugars Mills Ltd. The Company Petition No. 1 of 2005 was filed against both the Companies. However,

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subsequently the petitioner company, on its application, deleted  Chilwaria Sugars Ltd arrayed as respondent No. 2 in Company Petition No. 1 of 2005 and filed fresh Company Petition against Chilwaria Sugars Ltd.

3. During the pendency of the proceedings Chilwaria Sugar Mills Ltd has paid Rs. 2, 85, 910/- by demand draft dated 7.11.2005 to the petitioner company. The amount was paid in Court on 7.11.2005. It is contended by Shri Yashwant Verma appearing for M/s Simbhaoli Sugar Mills Ltd that the entire admitted liability in the account of the respondent company has been paid. He submits that for remaining amount, neither the bills were received nor any demand was raised by the petitioner company.

4. It is contended by Shri Arun Kumar Gupta that M/s Simbhaoli  Sugars Mills Ltd.- the respondent company in Company Petition No. 1 of 2005 placed a work order on 4.1.1996 for installation of certain machinery at its Chilwaria unit. The work was carried out but the  entire payment was not made.  On 26.2.2001, there was outstanding balance of Rs. 3, 43, 910.00. As against this the petitioner company only received the payment of Rs. 25000/- each on 22.2.2001 and 27.9.2001 and Rs. 10,000/- on 24.4.2002. According to the petitioner company, the balance outstanding  on 23.9.2004 was Rs. 3, 74, 481.97.

5. Shri Yashwant Verma submits that Chilwaria Sugar Mill is a division of M/s Simbhaoli Sugar Mills Ltd and Chilwaria

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Sugar Mill has no legal entity. The respondent company has paid off the entire outstanding liability. The petitioner company neither sent bill nor raised any  demand for balance amount of Rs. 91,571.97.

6. Shri Arun Kumar Gupta has not filed the certificate of incorporation of Chilwaria Sugars Mills to support his submission. The petitioner company did not care to verify whether the Chilwaria Sugars Ltd is a separate company, before it amended Company Petition No. 1 of 2005 by deleting Chilwaria Sugars Ltd as respondent no. 2 and filed a fresh company petition to wind up Chilwaria Sugars Ltd. The Chilwaria Sugar Ltd is only a division of M/s Simbhaoli Sugars Mills Ltd and thus Company Petition No. 10 of 2005 to wind up Chilwaria Sugar Ltd is wholly misconceived.

7. M/s Simbhaoli Sugar Mills Limited was established in 1933. It has  sugar plants at Simbhaoli in western U.P. and  at Chilwaria, Bahraich in eastern U.P., with the  combined crushing capacity of 11,300 TCD. Simbhaoli has been assigned a command area of 80,000 hectares  and Chilwaria has a command of 200,000 hectares. The company has gross turnover of Rs. 50942.91 lacs and is paying Rs. 11923.34 lacs as excise duty. The company is carrying out its business activity with profits.

8. In Mediqup Systems Pvt. Ltd, vs. Proxima Medical System G.M.B.H., AIR 2005 Supreme Court 4175 the Supreme Court has reiterated the rules regarding the disposal of winding up petition based on disputed   claims.   Relying      upon

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Madhusudun Gordhandas and Co. v. Madhu Woollen Industries Pvt. Ltd (1972) 42 Com Cases 125 the Apex Court held that the principle on which Company Court acts are:

(i)that the defence of the company is in good faith and one of substance;

(ii)the defence is likely to succeed in point of law; and

(iii)the company adduces, prima facie proof of the facts on which the defence depends.

9. In the present case, the balance amount is disputed. The petitioner company has not made its stand clear with regard to whether it claims the amount as against Simbhaoli Sugar Mills Ltd and its division. Once it is established that Chilwaria Sugar Mill is only a division of M/s Simbhaoli Sugars Mill Ltd, the demand notice is found to be defective. Even otherwise this Court cannot adjudicate the dispute with regard to the remaining liability. I find that the defence of the respondent company has been taken in good faith and one of substance.

10. Both the Company Petitions are accordingly dismissed, with observations  that the Court has not adjudicated on the balance amount and that it will be open to the petitioner-company to take such remedies as may be open to them in law, if the amount is still due,  subject to the law  limitation.

Dt. 16.5.2006  

RKP/-


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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