THE HON’BLE SRI JUSTICE B PRAKASH RAO AND THE HON’BLE SRI JUSTICE B SESHASAYANA REDDY O S A NO. 5 OF 2009 JUDGMENT : (PER BPR,J) This appeal under Clause 15 of Letters Patent and Section 483 of the Companies Act, 1956 (for short the Act), as against an order of the learned single Judge allowing an application purported to have been filed under sections 433 (E) and (F) and 439 of the Companies Act, 1956 read with Rule 95 of the Company Courts Rules, 1959 allowing the relief for winding up of the appellant company , as per the orders in C P No. 85 of 2002 dated 30.1.2009. In brief, the facts which gave rise to the proceedings are that the respondent/applicant was appointed as dealer on behalf of the appellant and accordingly a memorandum of understanding was entered into between the parties on 1.3.1995. After the regular correspondence between the parties and certain transactions which underwent between the parties whereunder the respondent/applicant has made necessary deposits as contemplated, which was expressed on behalf of the appellant as to its certain difficulties in the business and thus seeking the assistance from all the dealers , suppliers and other agencies. Thereafter, there was a dispute in regard to the rate of interest on the security deposits and ultimately the respondent/applicant set up a claim for Rs.2,58,221.50 ps. It was followed by a notice under section 434 of the Act, on 25.9.2000 making a specific claim for Rs.7,58,221.50 ps which includes the sum of Rs.5,00,000/- of security deposit. There has been a reply by the appellant on 9.10.2000 denying the liability and seeking the said amount from M/s. Ashok Paper Mill (Assam) Limited. Again the respondent/applicant has issued another notice on 17.1.2002 which was again reiterated in the same format by way of reply on 25.1.2002 by the appellant, hence, the application by the respondent/applicant seeking winding up of the appellant company. The appellant filed a detailed counter raising several issues including as to the maintainability of the application as has been framed and filed and as regards to the facts and circumstances narrated wherein there arises a bonafide dispute and therefore the same cannot be warranted by the Companies Court. The learned Single Judge on the principles as laid down by the Hon’ble Supreme Court in M/s. MADHUNASUDAN GOVERDHANDAS & COMPANY Vs. MADHU WOOLEN INDUSTRIES PRIVATE LIMITED[1] short listed the sequel of the events in the following manner. (1) Pursuant to a request, soliciting the dealership, made by the petitioner herein on 17.4.1996, the respondent, through its communication, dated 8.7.1996, appointed the petitioner as its authorized delaer for selling its verities of paper and paper products in Guwahati area. (2) The respondent company appears to have established a separate division known as ‘Paper Division’ at Calcutta. It is the paper division of the respondent company, which has passed on stamped receipts as and when they received demand drafts drawn in a sum of Rs,2,80,000/- and Rs.2,20,000/- thus comprising the security deposit of Rs. 5,00,000/- which was required to be deposited as a security for the business to be carried on by and between them. (3) Through the communication dated 26.4.1996 the paper division of the respondent company, while soliciting the security deposit @ Rs.10,000/- per Metric Ton for a minimum of 50 Metric Tons of offtake per month, has clearly offered to pay interest @ 15 % per annum thereon. (4) The Paper Division of the respondent Company has, in fact, paid interest @ 15 % on the security deposit of Rs.5,00,000/- for the period from 1.4.1998 to 31.3.1999 duly deducting 10 % thereof towards TDS and furnished the necessary certificate in Form No. 16 A, to the petitioner. (5) It is the Paper Division of the respondent, through its Director, has appealed to all the dealers, including the petitioner, to extend their helping hand to bring in normalcy of the production and sales of their paper division at Jogighopa, which was followed up by another communication dated 26.12.1997, soliciting valuable orders from the petitioner. (6) It is the Paper Division of the respondent Company, acting through its Director Mrs. Swati Saraf, through a circular dated 20.5.1998, has proposed to reduce the rate of interest on the security deposit amount to 11 % with effect from 1.4.1998 according to the prevailing market condictions. (7) Such unilateral reduction of the agreed rate of interest has been objected to by the petitioner on 8.6.1998. (8) The running account for the period from 1.4.1998 to 31.3.1999, has been struck by the petitioner with all necessary details containing credits and debits and forwarded the same to the respondent Company showing clearly the outstanding liability of the respondent in a sum of Rs.2,58,221.50 ps. (9) Through communication dated 18.1.2000, the petitioner has protested the silence that was observed by the respondent company. (10) For the first time, in their reply notice sent through their counsel, on 9.10.2000, the respondent had tried to trace the history as to how it had made an attempt to takeover the management of M/s. Ashok Paper Mill (Assam) Limited, pursuant to a memorandum of understanding dated 1.3.1995, followed up by a lease deed dated 11.9.1995. In this notice, it has been asserted by the respondent that M/s. Ashok Paper Mill (Assam) Limited, acting under the directions of the Government of Assam, has illegally terminated the memorandum of understanding and the lease deed vide their letter dated 1.7.1999. It is through this notice, the respondent has propounded the theory that it is M/s. Ashok Paper Mill (Assam) Limited, which has become liable to refund all investments made by the respondent in the said paper mill.” From the above and taking into consideration the Civil Suit in TS No. 61 of 1999 on the file of the Civil Judge (Sr.Division), Bongaigaon, Assam State, which has been filed by the appellant for damages and further reliefs, it was held that there exist liability on the part of the appellant and the said suit has absolutely nothing to do with the present issue or the liability as arising. Therefore, it was held that there is bonafide dispute as to the claim made by the respondent/applicant and further held that the appellant has agreed to pay interest at 15 % per annum on the security deposit received by it and it cannot down grade the same at 11 % per annum with 1.4.1998 to the detriment of the respondent applicant and thus it was held that the appellant company is accepted to clear its debt due to the respondent applicant and granted time upto 15.3.2009 for clearing the debt along with interest at 15 % on the security deposit amount and on failure of which the company be wound up. Having heard the counsel and on perusal of the material, the point which arises for consideration is whether in the facts and circumstances the order of winding up is valid. During the course of the arguments, there is no serious dispute in regard to the aforesaid checkered events and also the narration of the short listed aspects as extracted above and as mentioned by the learned single Judge. Apart from denying the liability in sweeping submission, the main attack against the order as to the pendency of the civil suit in TS No. 61 of 1999 on the file of the Civil Judge (Sr.Division), Bongaigaon, Assam State and also Money Suit No. 38 of 2002 on the file of the Civil Judge (Senior Division) No.1 , Guwahati and therefore placing reliance on the judgment of the learned single Judge, the Division Bench of this Court O S A No. 40 of 1998 in VIJAYALAKSHMI Vs HARI HARA GINNING And PRESSING, NANDIGAON[2] , wherein it was held that the company Court could not have gone into all these questions and fixed any liability especially when the matter is sub judice and the said dispute has to be decided by the said Civil Court. We have considered these submissions and as rightly pointed out by the learned Single Judge the suit in T S No. 61 of 1999 is totally stands on a different pedestal, where the appellant has sought for recovery of Rs.65,000/- from M/s. Ashok Paper Mill (Assam ) Limited and also from the State of Assam. It was held that pleas raised there and issue arising thereunder are far, apart from the present one. Even in Money Suit No. 38 of 2002 also we have perused the pleadings which have been submitted across the Bar during the course of arguments and found that this liability does not get squarely covered thereunder. Further even in the judgment of Vijayalakshmi case (cited supra) , it was a case where it was on a categorical finding that the debt due to the company has not been proved and further there was never any liability incurred and taking into consideration the pendency of a suit between the parties therein, it was held that these aspects could not possibly be taken up for consideration by the Company Court in an application filed under Section 433 (e) and (f) and section 439 of the Act. Therefore, on the facts the said decision has no application to the present case as has been found by the learned Single Judge, on all the aforesaid reasons as given therein with substantial correspondence between the parties and having found that there is no justification for such revision on the part of the interest by the appellant company on its own and at its end, one-sidedly, could not escape the liability. In view of such findings of fact as arrived at by the learned single Judge and no other question of law arising in this appeal, nor the appellant having shown any irregularity unsustainable of the findings of the learned Single Judge, we are afraid that this Court cannot interfere with the same in its exercise of powers under Clause 15 of the Letters Patent or even an appeal under Section 483 of the Companies Act. Further, we also note that as against the material produced before the learned single Judge and the findings arrived thereon, no further material has been brought to our notice to come to a different conclusion nor to say that any substantial material has not been considered. For the foregoing reasons, we are of the view that there are no merits in the above appeal and the same is hereby dismissed with costs. However, the appellant is permitted to clear the said debt of the respondent/applicant as ordered by the learned Single Judge along with interest at 15 % per annum on the security deposit amount on or before the end of December, 2009. _______________ B PRAKASH RAO,J ______________________ B SESHASAYANA REDDY,J DATE: -11-2009 TVK THE HON’BLE SRI JUSTICE B PRAKASH RAO AND THE HON’BLE SRI JUSTICE B SESHASAYANA REDDY O S A NO. 5 OF 2009 Date: -11-2009 THE HON’BLE SRI JUSTICE B PRAKASH RAO AND THE HON’BLE SRI JUSTICE B SESHASAYANA REDDY O S A NO. 5 OF 2009 PD Judgment for perusal of Hon’ble Sri Justice B Seshasayana Reddy [1] AIR 1971 SC 2600 [2] 1999 ALD (3) 624