1 cp390-10 vai IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.390 OF 2010 Taikisha Engineering India Limited ....Petitioner V/s. M/s.KLT Automotive & Tubular Products Ltd. ....Respondent Mr.Chetan Kapadia with Mr.Ameya Gokhale i/b M/s.Khaitan & Co. for the Petitioner. Ms.Usha Shrivastava with Mr.Satish Raut i/b M/s.Consulta Juris for the Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 27TH APRIL, 2011. P.C. :- 1. This is a petition for winding up of the company on the ground that the company is unable to pay its debts. 2. The parties had entered into two contracts termed Supply Purchase Order and Erection Purchase Order. The Supply Purchase Order was in the sum of Rs.6,57,00,000/- and the Erection Purchase Order was in the sum of Rs.73,00,000/-. 3. There is no dispute about the fact that the supplies were made by the petitioner to the respondent. The respondent apparently changed the nature of its project after the purchase orders were entered into. The amounts by this time were due and payable in respect of the supplies already made. The petitioner further raised the claim in respect of the 2 cp390-10 supplies which were to be made as the petitioner had already arranged for the same. 4. It is not necessary to refer to the correspondence between the parties in detail. Suffice it to state that the petitioner from time to time requested the respondent to make the said payments. The correspondence indicates that the respondent never disputed the receipt of the goods or that further goods were to be accepted by it if the delivered under the said purchase orders. It is sufficient to refer to only a few documents which contain an admission on the respondent’s part to the extent of at least Rs.1,45,00,000/-. 5. An e-mail message dated 3.2.2009 was sent by the petitioner to the respondent. The minutes of the meeting held between the parties on 2.2.2009 were forwarded as an attachment to this e-mail message. The minutes have been signed by the parties. The respondent admitted an amount of about Rs.2,19,99,100/- as being due and payable in respect of the supplies effected. Subsequently the respondent addressed an e-mail message stating that it was facing difficulties but was in the process of arranging the funds. By an e-mail message dated 15.4.2009, the respondent stated that it was in the process of arranging the funds and would release some amounts as soon as it had a positive response. By an e-mail message dated 9.11.2009 the respondent stated that it was making arrangements for payment. 6. By this time the respondent had decided to change the nature of the work and requested the petitioner to see if it could utilize a part of the supplies elsewhere. 3 cp390-10 7. By an e-mail message dated 2.12.2009, the respondent admitted generally that there were outstanding amounts payable by it. By an e-mail message dated 22.12.2009, the respondent admitted an amount of Rs.1,41,41,607/- to be due and not Rs.2,19,99,100/-/. The respondent corrected this amount by a further e-mail message dated 23.12.2009. The respondent admitted that an amount of Rs.1,45,06,524/- was due and payable. 8. By an e-mail message dated 12.8.2010, the said amount was once again admitted by the respondent. The respondent however, sought to return certain material in the sum of Rs.2,05,73,257/-. On this basis, the respondent claimed that a sum of Rs.60,66,633/- was due and payable by the respondent to the petitioner. However, under the purchase order, the petitioner was not bound to accept the return of the material. The fact that the petitioner may be in a position to utilize the material elsewhere, would not be a defence to the petitioner’s claim. 9. Faced with this, it was contended that the petitioner had delayed the supplies and for this reason, the nature of the project had to be changed by the respondent. The leaned counsel for the respondent admitted that there is no correspondence to establish the same but merely stated that this was in fact true. 10. The learned counsel for the respondent in fact stated that the respondent was ready and willing to refer the disputes and differences to arbitration in accordance with the arbitration clause. He submitted that the petitioner ought to be compelled to do so. The existence of an arbitration agreement cannot defeat a winding up petition. 4 cp390-10 11 Even assuming that the petitioner is bound to give credit for a sum of Rs.60,66,653/-, it would no difference. Admittedly the supplies were of the value of about Rs.2,19,99,100/-. The subsequent admission in the sum of Rs.1,45,06,524/- was arrived at by the respondent itself after deducting the said amount. 12. There is no defence at least to the extent of Rs.1,45,06,524/-. In the circumstances, the following order is passed :- i). In the event of the company depositing in this Court a sum of Rs.1,45,00,000/- on or before 31.7.2011, the petition shall stand dismissed. ii). Upon the amount being deposited, the same shall be invested in a nationalized bank initially for a period of one year and thereafter 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 or adopting proceedings for referring the disputes to arbitration 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 or the arbitration proceedings as the case may be. iv). 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. v). 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. 5 cp390-10 10,000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default. Ms.Usha Shrivastava waives service on behalf of the respondent.