IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.990 OF 1999 In the matter of Section 434 of the Companies Act, 1956; And In the matter of Winding up of Arun Mantex Ltd. Supplementary Foods (India) Ltd. .. Petitioners Mr.A.C.Mahimkar i/by M/s.Mahimkar & Co for petitioners. Mr.Anoop Khaitan i/by M/s.Khaitan & Co for respondents. CORAM: S.C.DHARMADHIKARI CORAM: S.C.DHARMADHIKARI CORAM: S.C.DHARMADHIKARI J. J. J. DATE : 20th June, 2008 DATE : 20th June, 2008 DATE : 20th June, 2008 P.C. P.C. P.C. 1. Para 4 of this company petition for winding up reads thus: "4. The petitioners state that the company used to supply to the petitioners plastic pouches for packing their product viz.refined iodised salt for which the petitioners used to make payments from time to time. The Managing Director of the company i.e Mr.Vikas Makharia was also a director of the petitioners and was incharge of financial operations and banking operations of the petitioners. The said Mr.Vikas :2: Makharia Managing Director of the company transferred to the company substantial fund in excess of the cost of the plastic pouches supplied to the petitioners by the company from the petitioners banking account. As in charge of the financial operations and banking account of the petitioners, the said Mr.Vikas Makharia, Managing Director of the company, ought to have looked after the business interest of the petitioners. But in breach of the trust reposed in him by the petitioners, the said Mr.Vikas Makharia transferred the said fund by way of fraudulent means to the company, and thus the company has become involved in the commissioning of the said fraud. As per the statement of account drawn by the petitioners there is an amount of Rs.1,91,99,517.35 is payable by the company to the petitioners as on 31st March, 1997. Hereto annexed and marked as Exhibit "A" and "B" are the copy of the accounts of the company as on 31st March, 1996 and 31st March, 1997 respectively. When the personal follow up made by the petitioners with the company did not yield any result, the petitioners sent a letter by registered post A.D./U.P.C. dated 10th January 1998 calling upon the company to pay the :3: amount of Rs.1,91,99,517.35 within the 48 hours of the receipt of the letter with interest at the rate of the 24 per cent annum till the date of payment. Hereto annexed and marked as Exhibit "C" is a copy of the said letter dated 10th January, 1998 from the petitioners to the company. The company by its letter dated 30th January 1998 denied the liability. Hereto annexed and marked as Exhibit "D" is the copy of the said letter dated 30th January 1998 from the company to the petitioners". 2. Mr.Mahimkar appearing for the petitioner points out that the company has falsely denied the liability to make payment. The statutory notice was sent but there is no reply thereto. 3. Perusal of para 4 of the petition itself denotes that the company had denied its liability. Further, there are no documents annexed which would demonstrate that the petitioner supplied the products mentioned in para 4 of the petition. There is nothing on record barring the correspondence. On repeated queries from Court Mr.Mahimkar was unable to point out anything in the petition or annexures thereto which would demonstrate even prima facie that there was a :4: transaction leading to some amounts being due and payable and that is how petition for winding up had been filed. The requirement in law presupposes inability to pay debts. That deeming fiction arises on account of the fact that there is an amount due and payable and the company is unable to pay its debts. The nature of transaction between the parties is not set out in the present petition. The transaction between the Managing Director of the respondent and the petitioner might have financial implications but, ultimately, the claim is at the foot of the account. There is no confirmation of the balance allegedly due. Thus, all this will have to be proved and only if the entries are held to be genuine, then, the amount can be awarded. In such circumstances, merely because there are recovery proceedings initiated against the respondent Company which have resulted in a order being passed against it does not mean that the petitioner’s claim is such as would enable the Court to raise the presumption in law. 4. Mr.Mahimkar does not dispute that winding up proceedings are not meant for recovery nor are they a suit for recovery. In such circumstances, this company petition cannot be entertained. It is accordingly dismissed. :5: (S.C.Dharmadhikari, J)