SSM 1 cp.230.10.sxw IN THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 230 OF 2010 In the matter of Section 433 and 434 of the Companies Act, 1956; And In the matter of Clear Channel Communications India Pvt. Ltd. having its registered office at 52, Film Center, 5 th Floor, 68, Tardeo Road, Tardeo, Mumbai – 400 034. ..... Respondent. Sanjay Knit Pvt. Ltd. .... Petitioner Dr. Birendra Saraf i/b ALMT Legal for the Petitioner. Mr. M. R. Baya for the Respondent. CORAM: S. C. DHARMADHIKARI, J. DATED: 11 th FEBRUARY, 2011. P.C.: This company Petition for winding up has been filed by the Petitioner on the basis that under a contract that they have SSM 2 cp.230.10.sxw rendered certain services to the Respondent. These services are referred to in the invoices and therefore, under these invoices which were between 15 th February, 2008 to 24 th September, 2008, a sum of Rs.48,16,016/- together with interest at 18% is due and payable. The Petitioners have set out that they carry outdoor advertisement on behalf of clients DNA and TATA Indicom etc.. The Respondent has been placing written purchase orders to carry out outdoor advertisement on behalf of their clients DNA and TATA Indicom. The written purchase orders are between 2007 to 2009 under which the Petitioner claimed that they have carried out outdoor advertisement pursuant to that, the invoices have been raised. The Respondent had agreed to pay the charges as per the invoices, but they failed and neglected to make the payment. Although, it is stated in the purchase order that the installment is to be paid within 60-90 days from completion of every month's display. There are several letters addressed by the Petitioner so also reminders claiming a sum SSM 3 cp.230.10.sxw of Rs.65,05,832 as on 30 th March, 2009 in relation to the work of DNA and TATA Indicom. 2. The letter was addressed on 24 th April, 2009, in which it is stated that the company made a part payment of Rs.9,51,468/- out of the total outstanding dues as on 31 st March, 2009 but did not pay balance installment of Rs.55,54,364/-. 3. The response of the company to this demand is that there were disputes between the Petitioner and the Respondent on account of the outstanding amount. As far as the display of DNA is concerned, the Petitioner offered 10% discount on outstanding of the DNA. Further, the Respondent has stated that there were repeated communications about dispute with regards to the work executed for DNA. Therefore, unless the disputes are resolved the Respondent Company will not expedite the payment for the same and the company further declined the offer of the Petitioner of 10% discount with regard to the work executed for DNA. However, the amount SSM 4 cp.230.10.sxw with regard to TATA Indicom has been forwarded. The Petitioners, therefore, submit that the fact that the revised offer was made and that till date no complaint or dispute is raised by DNA or has been ever forwarded to the Petitioner, the outstanding amount should have been paid. The refusal to pay the same prima facie shows that the company is unable to pay its debts and therefore the winding up petition should be admitted. 4. The reply of the Respondent company is that the client DNA is not accepting defects and deficiencies in the works carried out by the Petitioner and did not pay invoices issued by the Respondent that is to the knowledge of the Petitioner. Had this not been the position, the Petitioner would not have by an email dated 19 th October, 2009 offered a discount of 10% on the DNA account. The amount was withheld by the Respondents as there were defects and deficiencies in the Petitioner's work and the Respondent stated that if the defects are rectified, the claim under the invoices can b e SSM 5 cp.230.10.sxw settled. 5. In my view, on reading of the entire material it is clear that as far as the services rendered by the Petitioner are concerned, wherever the Respondent company had no dispute or wherever there were no disputes or complaints by their clients, the payments have been made. The payment has been withheld as far as the DNA account is concerned, on account of certain defects which were brought to the notice of the Petitioner, the Petitioner, therefore, offered discount. In such circumstances, the fact that the offer of discounted payment was made raises a prima facie presumption that the Petitioner found some substance in the complaint made by the Respondent. This is a clear case whether the stand of the Respondent company that there is a bonafide defence to the claim cannot be said to be without any basis. These are matters were the parties made efforts to reconcile their accounts, and recover the outstanding amounts if any. In such claims, a Petition for winding up is not a SSM 6 cp.230.10.sxw remedy. Therefore, the Petition is dismissed. 6. The Petitioner has argued that the offer of 10% was not accepted but in respect of that a counter offer of 15% is made by the Respondent but even the payment at this discounted rate has not come forward. To my mind, when the offers and counter offers are made and there is no reconciliation and definite settlement it cannot be said that the Respondent had refused and neglected to pay the sum demanded which is a pre-requisite on which the Court can proceed under Section 433 (e) of the Companies Act, 1956. 7. The Petition, therefore, deserves to be and is accordingly dismissed. No costs. (S. C. DHARMADHIKARI, J).