Co.Pet. 2/2010 BEFORE THE HON BLE MR. JUSTICE HRISHIKESH ROY Heard Mr. N Deka, learned Counsel appearing for the petitioner. Mr. SC Keyal, learned counsel is present for the respondent company. 2. This winding up petition has been filed under Section 433(e) of the Comp anies Act, 1956 (hereinafter referred to as the Act ), for the failure of the r espondent Company to pay the debt arising out of the decree dated 6th April, 200 6 rendered by the learned Civil Judge (Sr. Division) No.1, Kamrup, for Rs.43,10, 875/- (Rupees forty three lakhs ten thousands eight hundreds seventy five), in M oney Suite No.125/03. The amount was decreed with interest @18%, from the date of institution of the case and cost of the suit quantified at Rs.21,181/- (Rupee s twenty one thousands one hundred eighty one) was also awarded to the plaintiff /petitioner. 3. While the Title Execution Case No.10/07 for recovery of the decreetal am ount was pending before the Execution Court, the petitioner took inspection of t he company’s statutory returns filed before the Registrar of Companies (ROC), Sh illong and learnt that, the respondent company since the year 2006 had reflected in its balance sheet, its liability to the petitioner. In the first relevant ye ar the amount was quantified as Rs.20,20,316/- as on 31.3.2003. In the subsequen t years, the debt was continuously reflected showing the petitioner as the credi tor and the dues was progressively reduced and shown as Rs.18,20,316/- as on 31. 3.2006 and Rs.14,45,316/- as on 31.3.2008 respectively. 4. Since the initial liability as on 31.3.2003 was reduced in the audited b alance sheet without making any payment to the creditor, a statutory notice unde r Section 434 of the Act was dispatched on 21st December, 2009 by the petitioner , demanding a sum of Rs.91,60,603.30 paise as total dues (principal with interes t) upto 16th December, 2009 and also future interest until payment is realized. Although notice was duly served on 26th December, 2009, as can be gathered from the postal A/D Card (Annexure-XIV), the noticee failed to respond to the statuto ry notice and accordingly under the deeming provision of Section 434, the Compan y is contended to be unable to pay its debt. 5. The respondent in their counter affidavit filed on 29th September, 2010 admitted the decree against them in the Money Suit. However it is averred that b ecause inferior green tea leafs were supplied by the petitioner in pursuant to t he agreement dated 12th February, 2002, the respondent suffered loss in his tea business and accordingly it is claimed that some amount is liable to be deducted , from the dues payable by the respondent to the petitioner. 6. This court after considering the pleadings and the submissions of the pa rties, on 11th October, 2010 held that the respondent’s defence is not bona fide and since no appeal is filed against the decree by the judgment debtor, the win ding up petition was ordered to be advertised in the ’Asomiya Pratidin’ and ’The Assam Tribune’, published from Guwahati. 7. During subsequent proceeding on 7th February, 2011, the learned counsel appearing for the respondent company on instruction, admitted the respondent’s l iability for the principal amount of Rs.43,10,875/- (the decreetal amount in the Money Suit No.125/03) and also the interest payable on the said amount. But it was submitted by the learned counsel that, the respondent company be permitted t o liquidate its dues in monthly instalment. 8. Thereafter an affidavit was filed on 7th March, 2011 by the Managing Dir ector of the respondent, where a commitment was made for one time payment of a s ubstantial amount and also to pay up the balance through monthly payment of Rs.5 0,000/-, starting from April, 2011. Assurance was also given that if the improvi ng trend of the financial position of the respondent company continues, the mont hly instalment amount will be further enhanced. 9. However, when the matter was taken up on 4th April, 2011, Mr. SC Keyal, learned counsel submitted that the respondent company was evasive with their ins tructions to the counsel and accordingly the case was posted for final hearing. Today when the matter was taken up, Mr. Keyal submitted that information was giv en to the Managing Director of the Company that the case is fixed for final hear ing on 3rd May, 2011 and their cooperation was sought for conducting the hearing . But the counsel submits that notwithstanding the written communication sent on 25th April, 2011, the respondent continues to be elusive and have not contacted their counsel and accordingly he is unable to say, whether the debt to the peti tioner would be paid or not. 10. Appearing for the petitioner, it is contended by Mr. N Deka, learned cou nsel that a winding up proceeding is maintainable by a decree holder against the judgment debtor and merely because an execution proceeding has also been filed for recovery of the decreetal amount, a winding up petition can’t be rejected. H e relies upon this Court’s decision in Tube Investment of India Ltd. Vs. M/s. Ev erest Cycles Limited reported in (1984) 1 GLR 529, in support of his contention. The learned counsel also refers to the provision of Section 434 of the Act to su bmit that since the respondent company neglected to pay the sum demanded through the statutory notice, it must be deemed to be unable to pay its debt and should therefore be ordered to be wound up under the Act. 11. The petitioner herein is a Company which sells green tea leafs and the r espondent contracted to purchase tea leafs from them for manufacturing tea in th eir factory. In the contract executed on 12th February, 2002 it was agreed that, the petitioner would supply green tea leafs to the respondent at Rs.9.50 per ki logram and the payment for the green tea leafs was agreed to be made by the resp ondent, within 10 days from raising of bills by the supplier. When the bills rem ain unpaid and the dues became huge, the Money Suit No.125/03 was instituted aga inst the respondent. The defendant failed to file its written statement on time and accordingly the suit proceeded ex-parte. The challenge made to the ex-parte proceeding through a petition under Article 227 of the Constitution was rejected by this Court on 11th May, 2005 in New Manas Tea Estate Pvt. Ltd. Vs. Gargaon T ea Company Pvt. Ltd. reported in 2005 (2) GLT 516. The resultant Writ Appeal No. 596/05 filed by the respondent was held to be not maintainable and was dismissed by the learned Division Bench on 9th December, 2005. But after failing to stall the suit proceeding, the defendant did not participate in the Trial Court and f inally by the judgment and decree dated 6th April, 2006, the Money Suit No.125/0 3 was decreed against the respondent company. 12. As can be seen from the pleadings, the respondent does not dispute its l iability as the judgment debtor in the Money Suit No.125/03. All that is avered by them is that they suffered business loss for inferior tea leafs supplied by t he petitioner and accordingly some amount should be deducted from the decreetal amount. 13. It this case, the quantified dues as on 21.12.2009 (when the statutory n otice was issued demanding payment), was to the tune of Rs. 91,60,603.30 paise. A winding up proceeding is maintainable when a Company is found to be indebted f or a sum exceeding Rs.1,00,000/- and therefore even if some amount is deductable from the total amount claimed, it is apparent that indebtness of the respondent company exceeds Rs.1,00,000/-. Therefore the winding up petition is found to be maintainable since the Company is unable to pay its debt within the meaning of Section 433(e) of the Act. 14. What is seen here is that even after admitting its liability before this Court, the respondent has failed to honour its commitment to liquidate any port ion of its dues and to start the monthly instalment payment w.e.f. April, 2011. That apart, they have also cut off contact with their engaged counsel. Therefore it is clear that they are not in a position to pay their dues and it would not be right to allow such a company to carry on its business in the face of this wi nding up proceeding. 15. In view of above, the winding up of the respondent company for its failu re to pay its debt is ordered. The official liquidator is directed to take immed iate possession of their assets and properties. The consequential follow up step s should now be taken by the petitioner, to intimate the ROC, Shillong and the O fficial Liquidator, of the winding up order passed against the respondent compan y. 16. This petition stands allowed with the above order, without any order of cost.