IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE P.DURGA PRASAD O.S.A.No.6 OF 2010 Date:07-03-2011 Between:- Zerostock Retail Pvt. Ltd, Hyderabad, rep.by its C.E.O. Ashok Mayya and others .. Appellants/Respondents And M/s.Colorooms Interiors and Exteriors, Chennai, rep.by its Prop.J.Praveen Chand Bafna, rep.by SPA N.Anil Jain .. Respondent/petitioner JUDGMENT:- (Per the Hon’ble Sri Justice B.Prakash Rao) This appeal is at the instance of the Company, against whom an application for winding up has been filed under Sections 433(e), 434(1)(a)&439(1)(b) of the Companies Act, 1956 (for short, ‘the Act’) and it has been admitted. Hence, the grievance. 2. The brief facts of the case are that Company Petition No.114 of 2009 was filed for winding up of the first appellant-Company. The case of the respondent/petitioner, in short, was that for the works done by it, the first appellant-Company was still due a sum of Rs.7,69,079ps against the total amount of Rs.15,74,223/-. Even though respondent had issued a legal notice on 17-04-2009, there has been no reply or no response to the discharge of the said liability. The case of the first appellant-Company is that having regard to the other facts and circumstances as mentioned about the filing of some suits and losses sustained, it is not in a position to discharge the liability. Hence, the application. 3. In the counter affidavit filed by the appellants in the company petition, apart from the denial a specific plea has been taken that it had paid an amount of Rs.9,50,743/- towards full and final settlement for the work done by the respondent and thus, no amount is due and further, there being a dispute in regard to such liability, the question of winding up does not arise. 4. The learned single Judge, by considering the respective submissions from both sides and having found that the first appellant- Company has totally failed to substantiate that it has cleared the amount payable as stated by it, admitted the company petition. Hence, the appeal. 5. The learned counsel appearing for the appellants strenuously contended that having regard to the nature of the dispute with regard to the disputed amount, where there is a total denial on the part of the appellants, there is a triable issue, which could not have been taken on the face of it for the purpose of ordering admission of winding up application against the appellants and which is originally dealt into the damage of the business. 6. The learned counsel on behalf of the respondent herein sought to deny the aforesaid contention and stated that in spite of best efforts, no amount has been paid by the first appellant-Company and having regard to the condition of the business, its inability is at large. 7. It is now well settled with regard to the provisions under Section 433 of the Act. As regards the main ingredient in regard to the triable/disputed claims and the defence, it has been observed in M/s.Madhusudan Gordhandas & Co. vs. Madhu Woollen Industries Pvt.ltd.[1] as follows: “Two rules are well settled. First, if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. See London and Paris Banking corporation [(1874) LR 19 Eq 444]. Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been properly was not allowed. See Re.Brighton Club and Horfold Hotel Co.Ltd.[(1865) 35 Beav 204]” 8. Having considered the submissions and also material on record, the only point that arises for consideration in this appeal is whether the respondent has made out any prima facie case for seeking winding up of the first appellant-Company and for its consequent admission? 9. A reading of the pleadings of both sides shows that the appellants company did make a payment to the respondent herein an amount of Rs.9,50,743/-, which according to the appellants is towards full and final settlement, whereas the case of the respondent in the company application is that out of the total amount of 15,74,223/-, an amount of Rs.7,69,079/- is still due and that the legal notice remained unreplied. 10. We have perused the entire counter affidavit filed by the appellants herein in the company application. No doubt, there is a denial of every aspect but there is no specific plea as to the total work done and the amounts due and the amounts paid etc. No details have been furnished. Further, the appellants had taken a specific plea that the payment Rs.9,50,743/- is towards full and final settlement. Even in this regard, as rightly observed by the learned single Judge, no material has been produced by the appellants to show that there is any such full and final settlement or otherwise. 11. Even in this appeal also, we have granted time for the appellants to produce such material in support of the full and final settlement. So far, nothing has been produced. 12. In the above circumstances, we are of the view that the respondent has made out a case, as rightly observed by the learned single Judge. 13. The appeal is, accordingly, dismissed. There shall be no order as to costs. ___________________ B.PRAKASH RAO, J _____________________ P.DURGA PRASAD, J 7th March, 2011 AMD THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE P.DURGA PRASAD O.S.A.No.6 OF 2010 Date:07-03-2011 AMD [1] 1971(3) Supreme Court Cases 632