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1/7 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Dated this the 25th day of November, 2016
Before
THE HON’BLE DR JUSTICE VINEET KOTHARI
Company Petition No.157/2015 Between M/s. Praxis Inc., Having its Registered Office at No.18, Srinivagilu Main Road Ejipura, Bengaluru-560047.
Represented by its partner Mr. Gopakumar Menon.
... Petitioner (By Mr. Sunil P. Prasad, Advocate)
And
M/s. Nandhini Hotels Pvt. Ltd Having its Registered Office at No.114/2, Lalbagh Fort Road Minerva Circle, Bengaluru-560004 Represented by its Director/s.
... Respondent (By Mr. S.P. Kulkarni, Advocate)
****
This Company Petition is filed under Sections 433(e) and (f) R/W Sections 434(1) (A) and 439(1)(A)(B) of the Companies Act, 1956, praying to pass an order of winding up of the Respondent Company - Nandhini Hotels Pvt. Ltd., No.114/2, Lalbagh Fort
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Road, Minerva Circle, Bangalore-560004 under the provisions of the Companies Act, 1956 & etc.,
This Company Petition coming on for Admission this day, the Court made the following:
O R D E R
Mr. Sunil S. Prasad, Advocate for Petitioner. Mr. S.P. Kulkarni, Advocate for Respondent.
The petitioner – M/s. Praxis Inc. (hereinafter referred to as ‘Firm’ for short) which entered into a contract for providing Architectural Design services to the Respondent – M/s. Nandhini Hotels Pvt.Ltd. (hereinafter referred to as the ‘Company’ for short), for construction of a Residential Apartment building for them known as “Prakruthi Solitaire” in Phase – I and Phase-II in the Electronic City of Bengaluru, has filed this Winding-up petition against the Respondent – Company for the alleged non-payment of the ‘Professional Fees’ of Rs.1.80 Crores to them. 2. Despite service of the statutory legal notice under Section 434 of the Companies Act, 1956, vide Annexure J,
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dated 24/11/2014, claiming a sum of Rs.99,08,205/- with 18% interest per annum, upon issuance of notice, the Respondent - Company has put in appearance and has filed the Statement of Objections before this Court on 28/07/2016. 3. The Respondent – Company has denied its liability to pay the aforesaid sum of Rs.99,08,205/- and has submitted before the Court that the said petitioner – Firm did not give the complete services for Phase-II of the said Project, “Prakruthi Solitaire” and payment to the extent of completion of Phase-I Project, a ‘Completion Certificate’ was issued vide Annexure G, document (undated) which gave the date of completion of Phase-I of the Project as ‘October 2013’ of built-up area of 25,500 Sq.mtrs, for which phase-I, their fees was duly paid, but the balance amount was not required to be paid as the petitioner - Firm did not render the ‘Professional Services’ for the Phase-II of the project of the Respondent - Company.
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Paragraph 7 of the said Statement of Objections is quoted below for ready reference “7. It is submitted that with respect to the averments made at para-13 of the petition that, out of the aforesaid items agreed under Work Orders the balance amount of Rs.99,08,205/- remained as outstanding amount as on the date of petition etc., are all erroneous and wrong and also equally false. The said averments cannot be accepted in law in as much as the project itself was not completed and also the services were not fully rendered by the petitioner Company. As the Phase-I project itself was not completed there was no question of seeking for and opting for the Phase-II intendent. Therefore, at any rate the averments made in para- 13 that the balance the amount remained unpaid would be taken towards Phase-II etc., are totally false.”
The learned counsel for the Respondent - Company also urged that in view of the said Statement of Objections filed by them, there is no ‘admitted liability’ on the part of the Respondent - Company to pay the said claimed amount of
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Rs.99,08,205/- and therefore, the present winding-up petition deserves to be dismissed. He also submitted that the Respondent - Company is a ‘going-concern’ and has regularly paid its taxes under the Income Tax Act, 1961, therefore, the Respondent - Company cannot be said to be commercially insolvent and the liability in question being a ‘disputed liability’, the Winding-up Petition is not maintainable and deserves to be dismissed. 6. Having heard the learned counsel for the parties and on perusal of the material placed on record, this Court is satisfied that there appears to be a bona fide dispute about the liability of the Respondent - Company towards the ‘Professional Fees’ claimed by the petitioner – Firm. The Architectural Design fees for the said project of the Respondent Company, known as “Prakruthi Solitaire” Phase-I of which was completed under the said professional services of the petitioner, but there appears to be some dispute about the second phase of the project for which the petitioner’s services were not continuously engaged by the Respondent -
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Company. This would also appear from the communication, Annexure H, E-mail dated 27/03/2014 written by one Mr. Ajit Jain, from petitioner - Firm to Mr. Ashok M., who was only a middleman and not the Director of the Respondent - Company, in which it shows that the petitioner - Firm had only submitted the architectural details, drawings of soft copy for Phase-II also and was awaiting the installment of fees of Rs.05.00 lakh per month, but the payments were not made to them nor the Respondent - Company or the said Agent was giving any response to the petitioner – Firm. 7. Therefore, it appears that the agreement between the parties about the providing of ‘Professional Services’ cannot be said to have a smooth sailing at that point of time also and no final ‘admitted liability’ crystallized in favour of the petitioner – Firm towards the said amount.
The jurisdiction of winding-up of a Company cannot be exercised against a solvent Company, if the liability of the Respondent - Company is disputed bona fide by it. The
Date of Order 25-11-2016 Co.P.No.157/2015
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winding-up petition cannot partake the character of a money recovery suit and unless the liability is clearly admitted by the Respondent - Company and is not paid-off, despite service of statutory notice, this jurisdiction is not available to be exercised for exerting any kind of pressure on the Respondent - Company. 9. This Court is satisfied that in the present case, the present winding-up petition does not merit admission and therefore, with liberty to the petitioner - Firm to avail alternative remedy by way of a Civil Suit, the present winding- up petition is liable to be dismissed. The same is accordingly dismissed. No costs.
Sd/- JUDGE
BMV*