1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 48 OF 2010 Royal Antibiotics & Investments Pvt. Ltd. ... Petitioner Vs Maneesh Pharmaceuticals Limited. ... Respondent Mr. J.P. Sen with Mr. Farhan Dubash i/b M/s. Federal & Rashmikant for the Petitioner. Mr. A.S. Daver with Mr. Shobhna Waghmare i/b Mulani & Co. for the Respondent. CORAM : S.J. VAZIFDAR, J. DATED : 7TH JULY, 2010. P.C. : 1. This is a petition for winding up the Respondent-company on the ground that it is unable to pay its debts. 2. Although the accounts appear to be complicated they are not so once the rival contentions of the parties are compartmentalized. 2 3. The Petitioner’s claim arises on account of the work done by it for the Respondent. In effect, the work comprised of the Petitioner manufacturing toothpaste as per the specifications stipulated by the Respondent-company, filling the same in the cartons/containers supplied by the Respondent and forwarding the same to the Respondent thereafter. The arrangement is stipulated in a contract dated 12th October, 2007. There is no dispute regarding the contract. 4. The Petitioner raised several invoices. The money was to be arranged through a bill discounting facility with the Union Bank of India. The claim is in respect of the invoices for which the bills drawn by the Petitioner were not accepted by the Respondent. Accordingly, the Petitioner was unable to receive payment from the bank under the bill discounting facility. 5. There is no dispute that the bills were raised. There is no dispute as to the amounts for which the bills were raised. Nor is there any dispute regarding the quality of the work done by the Petitioner. 6. The Respondent, however, claims credit for certain amounts 3 and disputes its liability to pay certain amounts claimed by the Petitioner. 7. According to the Respondent, it had made payments to various third parties who were to supply material to the Petitioner for the purpose of the said work. The Respondent contends that it was forced to do so in order to ensure that its product is manufactured and that there was no loss in this regard. The contention was that the third parties were reluctant to supply the material necessary for manufacturing the toothpaste to the Petitioner without being paid for the same in advance. The contention that the Respondent was entitled in law, therefore, to protect its own interest to pay the third parties and claim a credit for the said amounts against the Petitioner cannot be rejected. It is a bona fide dispute. The credit claimed in this regard is about Rs.28,00,000/-. The Petitioner’s contention that there was an over payment of Rs.6,00,000/- cannot be considered in this petition. 8. To establish its bona fides, the company has undertaken to this court to obtain a discharge from such third parties in respect of an amount of Rs.28,00,000/- and that the same shall be done on affidavits 4 filed by such third parties on or before 31st August, 2010. The undertaking is accepted. The company further states that in the event of the undertakings not being so filed in court, the company will deposit the said amount or such amounts for which the undertaking is not furnished, as the case may be, in this court, on or before 30th September, 2010. This is fair and reasonable on the Respondent’s part. 9. The Petitioner has also claimed an amount of about Rs. 10,00,000/- towards the balance material remaining with the Petitioner in respect of the said agreement. The said goods comprise of the packing material which, according to the Petitioner, cannot be used by it for any other purpose as the company is the owner of the trade- marks appearing on the said packing material. 10. The company, on the other hand, contends that the purchase of the said material was a business decision. The packing material is no longer in use as the nature of the packing material is outdated. This again is a bona fide dispute. No orders in this regard can be passed in this petition. 5 11. Even after giving credit for the above amounts there admittedly is an amount of over Rs.37,00,000/- due and payable by the company to the Petitioner. There is no defence to this amount. 12. The only other amount left for consideration is the interest on the amount of Rs.37,00,000/-. Under the invoices, the Petitioner is entitled to interest at 24% per annum. The Petitioner raised debit notes for an aggregate amount of about Rs.19,00,000/-, calculating interest at the lower rate of 14.5% per annum. Mr. Daver, on the other hand, states that the company is also entitled to interest on the amount that it had paid as stated above. According to Mr. Daver, the interest on the amounts paid by the Respondent aggregates to about Rs.12,00,000/-. Even assuming that to be so, interest of about Rs. 7,00,000/- would then be admittedly due and payable by the company to the Petitioner and this is at the lower rate of 14.5% per annum claimed by the Petitioner. 13. In the circumstances, the following order is passed :- 6 (a) In the event of the company paying the Petitioner a sum of Rs.45,00,000/- on or before 31st October, 2010, and furnishing the discharge by the said third parties to the extent of Rs.28,00,000/- and/or depositing the amount of Rs.28,00,000/- in court as stated earlier, the Company Petition shall stand dismissed. (b) In the event of the amount of Rs.28,00,000/- being deposited in court, instead of indemnity being procured from the third parties, the Petitioner shall be at liberty to withdraw the same unconditionally. (c) Even if the above orders are complied with, the Petitioner shall be entitled to adopt proceedings to recover any further amounts. (d) In case of failure on the part of the company to pay the amount as aforesaid, the petition shall stand admitted and to be advertised in the Free Press Journal, Maharashtra Times and Maharashtra 7 Government Gazette. In that event, the Petitioner to deposit an amount of Rs.10,000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default.