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Globe Detective Agency P. Ltd. Vs. Subbiah Machine Tools P. Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKarnataka High Court
Decided On
Case NumberCompany Petition No. 12 of 1983
Judge
Reported in[1985]58CompCas271(Kar); 1984(2)KarLJ207
ActsCompanies Act, 1956 - Sections 433
AppellantGlobe Detective Agency P. Ltd.
RespondentSubbiah Machine Tools P. Ltd. and ors.
Appellant AdvocateS.P. Khanna, Adv.
Respondent AdvocateS.N. Murthy, Adv.
Excerpt:
.....and counter-allegations are made as well as claims and counter-claims involving disputed questions of fact. 4. an extract of the balance-sheet is produced and i am unable to see that the respondent company is in such a bad position that this court can infer that it is incapable of paying its dues in the sum of rs......double the amount agreed to be paid on a monthly basis to the petitioner company. in that behalf, reply notice shows that the counter-claim made by the respondent company would render the petitioner company liable to pay a sum of rs. 4,500 as evidenced by the statements contained in para. 9 of the reply notice at annexure-g. in these circumstances, it denied any further liability on the part of the respondent company. that reply notice of the respondent company has been issued with the rejoinder dated december 7, 1982, by the counsel for the petitioner which also forms part of annexure-g. 3. in other words, certain allegations and counter-allegations are made as well as claims and counter-claims involving disputed questions of fact. the substance of defence is that the respondent.....
Judgment:

Chandrakantaraj Urs, J.

1. This is a petition presented by M/s. Globe Detective Agency P. Ltd., a company incorporated under the Companies Act, 1956 (hereinafter referred to as 'the Act'), under section 433(e) and (f) praying this Hon'ble court to wind up respondent No. 1, Sri Subbiah Machine Tools P. Ltd., also a company incorporated under the Act. Respondents Nos. 2 to 7 are its directors. The sum and substance of the petitioner's case is that by letter dated September 17, 1981, the petitioner company came to be appointed for making arrangements for security guards at the factory premises of the first respondent company. The security arrangements came into effect from January 23, 1981, and the security arrangements made would cost a monthly payment of Rs. 2,950 to the respondent company. The security unit provided by the petitioner company consisted of five security guards, one reliever and one head guard, total being seven persons in all. After this arrangement, there appears to have been some differences between the petitioner company and the respondent company, and the respondent company, despite the security arrangement entered into, has suffered thefts in its factory premises allegedly due to the negligence of the guards. In that behalf, there has been some correspondence between the petitioner company and the respondent company to which I will advert later in the course of this order.

2. The services of the petitioner company for security arrangements came to be terminated with effect form July 10, 1982, as per the letter of the respondent company dated July 5, 1982. Thereafter, the petitioner company presented a bill for Rs. 4,450.60 towards arrears of security charges agreed to be paid at the rate earlier mentioned together with the balances of earlier bills and other claims as set out in their bill. The respondents by their letters, true copies of which are annexed to the petition, denied their liability. Thereafter, a statutory notice was issued by the petitioner company as per annexure F to the petition through its counsel. In that notice, a sum of Rs. 4,450.60 together with the notice charges were demanded to be paid. Respondent company got a reply issued to the statutory notice through its counsel and that reply bears the date October 4, 1982. In the reply, it is contended that the guards employed by the petitioner company were from the very beginning negligent in their duties and on October 21, 1981, a visit made by a superior official of the petitioner company evidenced that negligence and he had administered a warning to the guards to be more vigilant. It is further stated in the reply that the security guards employed by the petitioner company took away the key bunch of the factory premises resulting in loss of machine hours in one shift on February 24, 1982. The respondent company was compelled to break open the locks at the factory premises and replace fresh locks on the same. This was also brought to the notice of the petitioner company. The respondent company has claimed Rs. 1,500 as the loss in machine hours and other losses connected therewith. Again on July 4, 1982, its electric heater fabricated by the respondent company was stolen and a time-piece also had been stolen. In regard to this, the petitioner company accepted liability and when payment was made, the respondent company made payments deducting those claims. Thereafter, on account of the abrupt ending of the agreement of the security arrangements (whoever might have caused the termination of the agreement the respondent company has claimed that it had to provide itself with an alternative security arrangement as an emergency measure which cost the respondent company a sum of Rs. 5,450, almost double the amount agreed to be paid on a monthly basis to the petitioner company. In that behalf, reply notice shows that the counter-claim made by the respondent company would render the petitioner company liable to pay a sum of Rs. 4,500 as evidenced by the statements contained in para. 9 of the reply notice at annexure-G. In these circumstances, it denied any further liability on the part of the respondent company. That reply notice of the respondent company has been issued with the rejoinder dated December 7, 1982, by the counsel for the petitioner which also forms part of annexure-G.

3. In other words, certain allegations and counter-allegations are made as well as claims and counter-claims involving disputed questions of fact. The substance of defence is that the respondent company is under no obligation to pay the amounts claimed by the petitioner company on account of the loss suffered by it due to the negligence of the guards furnished by the petitioner company. The debt is not admitted. In that position, this court exercising its special jurisdiction under the Act will not normally entertain the petition leaving the parties to settle the disputes in an appropriate civil court having jurisdiction. This court under s. 433 of the Act acquires jurisdiction only when a debt is admitted through the quantum of the debt may be in dispute. If a defence is put forward by the respondent company in respect of which the winding-up order is sought, this court has to examine whether that defence is taken bona fide and it is legally tenable. Having already adverted to the facts in this behalf, I need not repeat them. I am convinced, the respondent company has an arguable case in regard to its defence. Whether, ultimately, on facts proved or not proved, it succeeds, is not a matter this court should decide.

4. An extract of the balance-sheet is produced and I am unable to see that the respondent company is in such a bad position that this court can infer that it is incapable of paying its dues in the sum of Rs. 4,450. That also persuades me to incline in favour of not entertaining this petition. That further supports my conclusion that the defence raised by the respondent company is not only tenable but bona fide. In these circumstances, the company court will not interfere and decide the dispute in the summary proceedings under s. 433(e).

5. Mr. Khanna appearing for the petitioner company drew my attention to the case of Madhusudan Gordhandas and Co. v. Madhu Woolen Industries P. Ltd., : [1972]2SCR201 . Nothing in that decision supports the arguments advanced for the petitioner company, that on the documents furnished with the petitioner, this court should decide that a debt exists. On the other hand, the ratio decidendi of that case is that where the debt is disputed, the company court should proceed further unless it comes to the conclusion that the dispute in regard to the debt is not based on either tenable defence or not a bona fide denial of the debt.

6. In this view of the matter, this is a fit case in which the petitioner company should enforce its claim against the respondent company in a appropriate proceeding in a civil court and recover its debts as may be decree in its favour.

7. The company petition is, therefore, rejected.


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