1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 104 OF 2010 Sai Infotech E.S.S. Pvt. Ltd. ... Petitioner Vs Shree Kedarnath Sugar Agro Products Ltd. ... Respondent Mr. Sugandh B. Deshmukh for the Petitioner. Mr. Swapnil Bangur with Yatin R. Shah for the Respondent. CORAM : S.J. VAZIFDAR, J. DATED : 18TH JUNE, 2010. P.C. : 1. This is a Petition for winding up the Respondent-company on the ground that it is unable to pay its dues. 2. According to the Petitioner, the company is indebted to it in the sum of Rs.38,52,160/-. 2 3. The main claim is in the sum of Rs.25,14,812/- as per the bills forwarded by the Petitioner to the company from time to time. The bills also include the amounts payable for the work done. A sum of Rs.2,65,000/- is claimed as per a debit note. The debit note has been raised on account of the Petitioner having paid certain third parties an amount of Rs.1,15,000/- and Rs.1,50,000/- on behalf of the company. The company has endorsed its approval at the foot of the debit note. A sum of Rs.72,348/- has been claimed towards the supply of certain material. 4. The supply of material and the work was as per the terms and conditions contained in a letter dated 9th January, 2008. There is hardly any dispute about the fact that the material had been supplied by the Petitioner to the company. In fact, the ledger account of the company admits the liability of the company to the extent of Rs. 37,84,028/-. Even assuming that the ledger account annexed to the Petition cannot be relied upon, the extract from the books of the company tendered in court establishes the same. 5. The company, however, contends that the contract was not 3 merely one of sale and supply of goods. The Petitioner also had to erect the machinery and commission the plant. I will assume that to be correct. The goods were accepted initially without any protest. It is only after the statutory notice was served that the company addressed correspondence raising various grievances regarding the quality of the work and the material. Although this would normally be a factor almost entirely against the company, I cannot lose sight of the fact that the Petitioner and the Respondent are closely held companies and that the Promoters are related. The Managing Director of the company is the maternal uncle of the Managing Director of the Petitioner. The company has also made a counter claim in the sum of Rs.45,000/-. The company has produced a certificate of an Engineer certifying that the material is defective. It has specified the problems. 6. The fact, however, remains that as far as the supply of the material is concerned, there is no dispute. Moreover, despite the close relationship between the parties, it is also an important fact that the grievances about the alleged defective material and workmanship were raised only after the receipt of the statutory notice. 4 7. In the circumstances, the following order is passed :- (i) The Company is directed to deposit in this Court a sum of Rs.20,00,000/- on or before 31st August, 2010. (ii) Upon the amount being deposited, the same shall be invested in a nationalized bank initially for a period of one year and hereafter for like periods of one year each. (iii) In the event of the amount being so deposited and in the event of the Petitioner filing a suit within twelve weeks from the date of the Petitioner's advocate being informed of the same in writing, the amount shall stand transferred to the credit of that suit. The Petitioner shall be at liberty to make an application in the suit for withdrawal of the amount. (iv) Instead of depositing the amount, the company shall be at liberty to furnish a bank guarantee of a Nationalized Bank in the said sum of Rs.20,00,000/- together with interest thereon at the rate of ten per cent 5 per annum on or before 31st August, 2010. The rate of further interest is at par and shall be subject to any orders that may be passed in any proceedings. In the event of the bank guarantee being furnished, the same shall be to the credit of the Suit which may be filed. (v) In the event of the bank guarantee being so furnished and in the event of the Petitioner filing a suit within twelve weeks from the date of the Petitioner's advocate being informed of the same in writing, the amount shall stand transferred to the credit of that Suit. (vi) In the event of the Suit not being filed as aforesaid, the Petition shall stand dismissed and the amount with interest thereon shall be refunded to the Respondent–company or the guarantee shall be discharged, as the case may be. (vii) In case of failure on the part of the company to deposit the amount as aforesaid, the Petition shall stand admitted and to be advertised in Free Press Journal, Maharashtra Times and Maharashtra Government Gazette. The Petitioner to deposit an amount of Rs. 6 10,000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default. Mr. Y.R. Shah waives service on behalf of the Respondent.