,. 34 $~ .... ' ..... --- ~ - - ·-- * IN THE HIGH COURT OF DELHI AT NEW DELHI + CO.PET. 450/2010 & CO. APPLS. 2128-2129/2010 O/o PRABODH BAL YAN ..... Petitioner Through: Mr. G. Banerjee, Advocate. versus BYCELL TELECOMMUNICATIONS INDIA PVT. LTD. & ANR. . .... Respondents Through: Mr. Manish Gandhi, Advocate. CORAM: HON'BLE MR. JUSTICE MANMOHAN ORDER 20.12.2011 Present winding up petition has been filed under Section 433( e) read with Sections 434(1)(a) and 439 of the Companies Act, 1956 stating that respondent company is unable to pay its debt. It is stated in the petition that on 24th October, 2008, petitioner was appointed as Vice President (Marketing) by the respondent company. On 01 st May, 2010, respondent company wrote a letter to the petitioner dis-engaging his service. By this letter, respondent company encouraged the petitioner to proceed on leave for three months at a subsistence allowance of~ 50,000/- per month and petitioner was also encouraged to seek employment elsewhere as the issuance of a -----,-- --- - ---,- -y- -- T -...- ' T"" --.....- -- ._............ - ~ - ___... - ~ Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified I telecommunication license to the respondent by the Government was\\ delayed. On 02nd June, 2010, petitioner replied to the respondent company by a letter stating that his services were terminable after giving one month prior written notice in accordance with Clause 4(a) of the letter of appointment. By this letter, petitioner had also asked for payment of his dues. Since respondent company did not make any payment, petitioner on 28th October, 2010, issued a statutory winding up notice. As no response to the winding up notice was received from the respondent company within a period of twenty-one days after receipt of notice, the petitioner filed the present petition on which, this Court on 24th November, 2010 issued notice to respondent company. In the reply affidavit, respondent company has taken the stand that petitioner is not entitled to any payment as petitioner has not returned laptop, GPS Equipment, seven digital cameras as well as some intellectual properties of the respondent company. Needless to say, the aforesaid allegations are vehemently disputed by the learned counsel for petitioner. Having heard the parties at length, this Court is of the view that the question that arises for consideration in the present proceedings is ( that 'whether in view of the disputes between the parties, can it be said\ -j that the respondent-company is unable to pay its debt.' The Supreme Court in Mis. IBA Health (I) P. Ltd. vs. Mis. Info- Drive Systems SDN. BHD. (2010) 10 SCC 553 has held as under:- "20. The question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding-up for discharge of that liability? In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt? A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The Company Court, at that stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. It is settled law that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding-up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding-up petition as a means of forcing the company to pay a bona fide disputed debt. xxx xxx xxx 23. The principles laid down zn the abovementioned cases indicate that if the debt is bona fide disputed, there cannot be "neglect to pay" within the meaning of Section 433(1)(a) of the ( Companies Act, 1956. If there is no neglect, the deeming provision does not come into play and the winding up on the ground that the company is unable to pay its debts is not substantiated and non- payment of the amount of such a bona fide disputed debt cannot be termed as "neglect to pay" so as to incur the liability under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956. xxx xxx xxx 31. Where the company has a bona fide dispute, the petitioner cannot be regarded as a creditor of the company for the purposes of winding up. "Bona fide dispute" implies the existence of a substantial ground for the dispute raised. Where the Company Court is satisfied that a debt upon which a petition is founded is a hotly contested debt and also doubtful, the Company Court should not entertain such a petition. The Company Court is expected to go into the causes of refusal by the company to pay before coming to that conclusion. The Company Court is expected to ascertain that the company's refusal is supported by a reasonable cause or a bona fide dispute in which the dispute can only be adjudicated by a trial in a civil court. 33. . ........ .... A party to the dispute should not be allowed to use the threat of winding-up petition as a means of enforcing the company to pay a bona fide disputed debt. A Company Court cannot be reduced as a debt collecting agency or as a means of bringing improper pressure on the company to pay a bona fide disputed debt............. A creditor's winding-up petition implies insolvency and is likely to damage the company's creditworthiness or its financial standing with its creditors or customers and even among the public. " I Keeping in view the aforesaid mandate of law, this Court is of the opinion that in the present case, there is a substantial dispute as to liability. Further, this Court is of the opinion that the respondent-company has not lost its substratum as admittedly a sum of~ 23 crores is liable to be returned by the Department of Telecommunication to the respondent on account of licence fee refund. Consequently, at this juncture, this Court cannot reach the conclusions, firstly, that there is a debt due and payable to the petitioner and secondly, the respondent company is unable to pay its debt. Accordingly, present petition and pending applications are dismissed, but the petitioner is granted liberty to file appropriate proceedings in accordance with law for recovery of his alleged debt. Needless to say, the said court/forum would decide the matter without being influenced by any observations made by this Court. All the rights and contentions of both the parties are left open. DECEMBER 20, 2011 JS \\_J MANMOHAN,J ' \~ T T -.-- l1 111 T- I 'I -- T--~-- T --.-- - T T - T. T -T~-.-.--- I a I I I 1111 1111••11 -