Dismissed

Shyam Narayan and Brothers v. P. N. Writer and Company Private Limited

Bombay HC7 Oct 2013CP/359/2011

Case brief

AI extract

What is this about?

The court dismissed a winding up petition filed by a contractor seeking recovery of unpaid dues from a respondent company. The court held that the petition was untenable given the company's solvency, the limitation defence raised by an arbitral tribunal, and allegations of document fabrication.

What did the court decide?

The petition for winding up of the respondent company is rejected.

Shyam Narayan and Brothers Vs P. N. Writer and Company… — Company and Corporate | Bombay HC (2013)

¶1

cp-359.11.doc

¶2

ppn 1

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶4

COMPANY PETITION NO.359 OF 2011

¶5

Shyam Narayan & Bros. .. Petitioner Vs. M/s. P.N. Writer and Company Private Limited .. Respondent

¶6

Mr. M.M. Shetty for the petitioner. Mrs.Uma G. Wagle for the respondent.

¶7

CORAM : N.M. JAMDAR, J. DATE : 7 October 2013

¶8

P.C. :

¶9

. By this petition, the petitioner seeks winding up of the respondent-M/s.P.N. Writer and Company Private Limited.

¶10

The petitioner is a Partnership Firm carrying on business as Civil Engineers and Contractors. The respondent-company is registered under the Companies Act, 1956 and has an authorised share capital of Rs.10 crores. The paid up share capital of the company is Rs.9,88,72,000/- only.

¶11

According to the petitioner, the respondent had invited item rate offers from various contractors for carrying out the work of Excavation at GN-72, TTC Industrial Area, Mahape, Opp. Millennium Business Park, Navi Mumbai. The petitioner submitted its quotation by an order dated 5 October 2005 and accordingly necessary work order was issued to the petitioner on 7 October 2005. The starting date of work was 7 October 2005 and stipulated dates of completion

¶12

cp-359.11.doc

¶13

ppn 2

¶14

were 27 October 2005 and 11 December 2005 respectively. The value of the work was Rs.49,61,100/-. The work could not be completed by 11 December 2005. However, it was completed by 15 March 2006.

¶15

As work was completed on 15 March 2006, a final bill was prepared on 18 March 2006 for an amount of Rs.81,81,277/-. When no payment was finalised and paid to the petitioner upto 6 March 2009, the petitioner approached the respondent. The certificate was issued on 10 November 2006. According to the petitioner, the respondent made a part payment to the petitioner amounting to Rs. 65,28,565/-. Thereafter, further amounts were also paid to the petitioner. According to the petitioner, though the amount of Rs.11,52,256/- was shown in the TDS certificate, the same was not paid to the petitioner. According to the petitioner, thereafter there was various correspondence ensued between the parties and since the respondent-company failed to release balance payment of Rs.36,28,178/-, a notice was sent calling upon the respondent to pay an amount of Rs.36,28,178/- along with interest of Rs.23,39,802/-. Thus, the total amount demanded was of Rs. 59,67,980/-. Since this amount was not paid, a statutory notice came to be issued by the petitioner on 9 May 2011 under Sections 433 and 434 of the Companies Act, 1956. Thereafter, the present petition has been filed based on claim of Rs.63,82,006/-.

¶16

Reply affidavit has been filed by the respondent taking various contentions. In the reply, it is stated that there are serious disputes between the parties as regards the payments be made. It is stated that the work under contract was completed on 15 March 2006 and the notice under Sections 433 and 434 of the Act was issued on

¶17

ppn 3 cp-359.11.doc

¶18

9 May 2011 more than six years after completion of the work. It is stated by the respondent that the petitioner has colluded with the consultant and has fabricated the documents. It is stated in the reply that the amounts are due to the respondent for liquidated damages.

¶19

The petition appeared on board on 5 December 2012 when the petition was adjourned as the learned counsel for the parties had stated that the dispute between the parties is pending before the arbitrator. Again the petition was adjourned to 14 January 2013. The petition, thereafter, appeared on board on 28 June 2013. At that time, it was stated by the parties that the arbitration proceedings have been completed and award was given on 7 January 2013. The award of the arbitral tribunal was placed on record.

¶20

I have heard Mr. Shetty, learned counsel for the petitioner and Mrs. Wagle, learned counsel for the respondent.

¶21

The learned counsel for the respondent has raised a preliminary objection that the petition is time barred as the final certificate was dated 10 November 2006 and the petition has been filed on 15 July 2011. The learned counsel for the respondent submitted that the arbital tribunal has also dismissed the claim on this very ground. The learned counsel for the petitioner, on the other hand, submitted that though the final certificate was issued on 10 November 2006, an unequivocal rejection of the claim of the petitioner was made by the respondent only on 28 June 2011 and, therefore, it is from that date the limitation will have to be calculated. The learned counsel for the

¶22

ppn 4 cp-359.11.doc

¶23

petitioner has placed reliance on the decision of the Apex Court in the case of Major(Retd.) Inder Singh Rekhi Vs. Delhi Development Authority reported in AIR 1988 SUPREME COURT 1007 . The learned counsel submitted that in the said case, the Apex Court held that the final bill will not be taking as the starting period of limitation but when the dispute arose i.e. the claim made and denial thereof will be from starting period of limitation. The learned counsel for the petitioner has also placed reliance on the decisions of the learned Single Judges of this Court in the cases of M/s. Meena Enginerring & Contractors Pvt. Ltd. Vs. Municipal Corporation of Greater Bomaby reported in 1996 (2) Bom. C.R. 167, Superintending Engineer, M.I.D.C. & others Vs. Rajurkar Brothers reported in 2000(2) Bom.C.R. 635 and the other decisions of the Himachal Pradesh High Court in the case of S.M. Sareen Vs. Sate and others reported in 1993(1) Arb.L.R. 30.

¶24

It has to be kept in mind this proceedings are is for a winding up. The question is whether the defence raised by the respondent that the petitioner is trying to enforce the time barred dates can be considered as credible. The decisions which are relied upon by the petitioner have been rendered in the context of period of limitation for making a reference for arbitration. It is in that context, the Apex Court and the learned Single Judges of this Court and the Himachal Pradesh High Court have construed the dates of dispute as a starting period of limitation. There is a difference between the period of limitation for arbitration proceedings and the period of limitation for the claim.

¶25

In the present case, the final certificate was dated 10

¶26

cp-359.11.doc

¶27

ppn 5

¶28

November 2006. The work was completed before that date. It is after six years that the petition is filed for winding up of the company. Even if it is assumed that the petition is within time, the delay on the part of the petitioner to move a company petition cannot be lost sight of. The company Court while considering the question whether the petition needs to be entertained for winding up has taken into consideration several factors. It is not in dispute that the respondent-company is commercial solvent. It is also not in dispute that the arbitral tribunal appointed by consent has rejected the claim made by the petitioner as barred by limitation. The appeal filed by the petitioner against this award is pending. Thus, at this stage, it cannot be said that the submission made by the petitioner that the claim is barred by limitation is without any substance. The arbitral tribunal has also come to the conclusion that though the arbitration may not be barred by limitation, the claim was barred by limitation as the cause of action for recovery of money under final certificate arose on 10 November 2006 when the final certificate was issued by the consultant.

¶29

Apart from this position, the respondent has also taken up a ground that the petitioner has fabricated certain documents with the help of the consultant. It has been pointed out by the learned counsel for the respondent that this contention of the respondent has been upheld by the arbitral tribunal. The arbitral tribunal, on facts, found that the so called admission contained in Exhibit C-19 regarding the extent of work completed, was not proved. The arbitral tribunal came to the conclusion that there is no evidence to show as to who had prepared Exhibit C-19. Thus, the defence raised by the respondent that some of the documents

¶30

cp-359.11.doc

¶31

ppn 6

¶32

on which the claim is based are fabricated, cannot be considered as a moon shine.

¶33

In the circumstances, it cannot be said that the respondent has failed and neglected to pay the amount. No case is made out for winding up of the respondent-company. The petition is accordingly rejected.

¶34

N.M. JAMDAR, J.

Shyam Narayan and Brothers v. P. N. Writer and Company Private Limited

Case brief

What is this about?

What did the court decide?

Shyam Narayan and Brothers v. P. N. Writer and Company Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Hallmark Cards Inc. Vs Vintage Cards and Creations Limited - l22190MH1996PLC103009

Aricent Commercial Services Pvt.Ltd. Vs --

Aaa and Sons Enterprise Pvt.Lt.D Vs --

Housing Development Corporation Ltd. Vs Paranjape Construction Co. and Ors. and Vijay v. Kalsekar Nd 82 Ors.

Ravi Kiran Aggarwal Vs the Shri Krishna Hindu Merchants Club and Ors.

Indo Bonito Multinational Ltd. Vs Sunearth Ceramics Ltd.- U26940MH1978PLC020402