winding up petition against company if fails to pay outstanding dues

By | August 8, 2015
(Last Updated On: August 8, 2015)

Question : Whether winding up petition against  the company can admitted in case company fails to pay outstanding dues ?

Company act 2013 winding up petition

Sponsored Book Click to Buy

 Whether since in e-mails respondent-company had acknowledged to pay outstanding dues to petitioner-company but had failed to pay same, respondent was unable to discharge admitted liability and, thus, winding up petition against it was to be admitted


Venus Petrochemicals (Bombay) (P.) Ltd.


Vannix Industries (P.) Ltd.


CP NO. 93 OF 2013
CA NOS. 285 TO 288 OF 2013

                                                                                     MAY  18, 2015

Section 271 of the Companies Act, 2013/Section 433 of the Companies Act, 1956


■           The petitioner-company had supplied to respondent-company chemical materials known as Mosstanol-L and Mosstanol-120.

■           The entire material was duly received and accepted by the respondent-company without any objection and the material was duly supplied but the respondent-company has only paid a sum through cheque and, therefore, an amount was still outstanding.

■           The petitioner had sent telephonic reminders and as well as e-mail to the respondent-company and the said e-mail had been duly replied by the respondent-company, whereby they had acknowledge to pay outstanding amount and, therefore, it was alleged that respondent-company had admitted to pay the outstanding liability.

■           The legal notice was sent to the respondent-company through registered post, which was replied by the respondent-company, wherein, for the first time they raised dispute that the material supplied by the petitioner-company when sold by them to the clients for use, submitted the complaints and, thus, the respondent-company lost potential business, much less, goodwill and reputation.

■           The petitioner filed petition under sections 433(e), 434 and 439 for winding up of the respondent-company.

■           The respondent-company submitted that the petition was not maintainable in the eyes of law as no cause of action has accrued in favour of the petitioner-company, much less, the relief sought in the instant petition was not supported by any documentary evidence, therefore, the petition deserved to be dismissed.

■           It further submitted that petitioner-company misrepresented the respondent-company inasmuch as that the respondent-company had placed an order for Mosstanol-L (substitute of IPA) and for Mosstanol-120 (substitute of Butanol) and in fact the respondent-company had placed an order for Butanol and IPA but the petitioner-company assured that Mosstanol-L and Mosstanol-120 were the substitute of Butanol and IPA.

■           It further submitted that on representation of petitioner-company, the respondent-company has used aforementioned material in the painting industry in a span of 3-4 months, but the respondent-company started getting the complaint from the market/dealers regarding the quality or material and the petitioner-company through various e-mails informed about the defective material.


■           On perusal of the purchase order placed by the respondent-company to the petitioner, it is evident that the material Mosstanol-L and Mosstanol-120 was ordered, though on the subject it has been mentioned as ‘supply of IPA/Butanol’. In every purchase order, the respondent-company placed the order with regard to supply of Mosstanol-L or Mosstanol-120 or sometimes together with the same subject as extracted above. [Para 14]

■           It is hard to believe that the respondent-company was misrepresented and was compelled to purchase the substitute instead of IPA and Butanol, inasmuch as that purchase order filed in the year 2007 onwards is in same fashion and similar to the one extracted above. In every purchase order, the respondent-company has ordered for Mosstanol-L and Mosstanol-120. It is basically the nomenclature being used in the ‘subject IPA/Butanol’ being Mosstanol-L and Mosstanol-120 substitute and respondent-company had been using such material since time immemorial. Had respondent-company being misrepresented, there would not be occasion for the respondent-company to perpetually placed an order of the aforementioned material, i.e., Mosstanol-L and Mosstanol-120. [Para 15]

■           The respondent-company in order to establish as to whether the material supplied by the petitioner-company was defective or not, enjoined upon obligation to place on record the copy of the complaints received by their clients, which had used the material by manufacturing, i.e., the end product, much less, the debit notes. E-mail would also leave no manner of doubt that plea of alleged complaint was taken half heartedly. [Para 16]

■           It appears that the respondent-company had taken the plea of alleged defective material only to defray the payment of outstanding dues and the said e-mails were accompanied by any copy of the alleged complaints, much less, any type of plea taken by the respondent-company that the material as defective and in fact it is only a ploy not to make the payment. [Para 18]

■           In the instant case in view of categoric admission of the respondent-company suffered in the year 2013, the Court is made to believe that the respondent-company has admitted the liability to pay the debt. [Para 19]

■           In the e-mails written by the respondent-company to the petitioner-company, the respondent-company acknowledge to pay the outstanding dues by generating money by taking loan from the bank and even in the one of the e-mails, the respondent-company had admitted, that 40 tonnes material lying with them, they intend to sell it and generate capital. [Para 20]

■           On perusal of the e-mails, it is irresistibly concluded that the respondent-company had failed to pay the admitted liability. In view of the categoric admission of the respondent-company, the court is made to believe that the respondent-company is unable to discharge the admitted liability and, thus, the present petition is liable to be admitted. [Para 21]

■           Accordingly, the present petition is admitted. [Para 22]


Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source
New Books Released on Tax , GST and law

Leave a Reply

Your email address will not be published. Required fields are marked *