THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA O.S.A.No.8 of 2010 COMMON JUDGMENT: (Per BPR, J) This appeal under Clause 15 of the Letters Patent is at the instance of the company against which winding up was sought by the respondents 1 and 2 herein and which has been ordered as per the orders in C.P.No.56 of 2009, dated 31-5-2010 by the learned Single Judge. Heard Sri A.Ravinder Reddy the learned counsel appearing for the appellant and Sri C.Kodandaram, the learned Senior Counsel appearing for the respondents herein. Briefly, the facts which gave rise to the present proceedings as can be culled out even from the proceedings under the appeal and as narrated are, that the 1st petitioner had supplied pre-fabricated structures to the respondent as per the latter’s drawings. The terms and conditions for payment of the amount by the respondents to the 1st petitioner are 50% advance along with confirmed order, 40% during work in progress and 10% after completion of total work. The 1st petitioner supplied the material from 21-5-2008 to 31-10-2008. During the said period, certain payments were made by the respondents. For the balance payment, the 1st petitioner has been pursuing with the respondents by addressing letters repeatedly. Copies of some of the letters are dated 28-7-2008, 13-9-2008, 30-10-2008, 26- 11-2008 and 27-01-2009, which are placed on record. The 1st petitioner has specifically stated in the letter dated 26-11-2008 that it received only Rs.56,70,670/- and the balance payment is long overdue. The total worth of the material supplied by the 1st petitioner to the respondents is stated in the letter dated 30-10-2008. As per the said letter, the total worth of the material supplied by the 1st petitioner is Rs.94,76,055/- and the amount paid by the respondent to the 1st petitioner is Rs.56,70,670/- leaving a balance of Rs.38,05,385/-. The respondents did not dispute about receiving the material worth of Rs.94,76,055/- and making a part payment of Rs.56,70,670/- leaving a balance of Rs.38,05,385/-. The 2nd petitioner is concerned with erection of AEROCON pre-fabricated structures. The respondents, while accepting the quotation for labour charges submitted by the 2nd petitioner indicated the schedule of payment, which reads as hereunder: 30% advance along with confirmed order 50% during work in progress 20% after completion of work The 2nd petitioner indicated the amount due to it towards labour charges in the letter dated 30-10-2008. The total amount claimed towards labour charges is Rs.35,92,230/- and the amount received is stated at Rs.8,11,318/- leaving a balance of Rs.27,80,912/-. The respondents did not dispute of the amounts claimed by the 2nd petitioner. The respondents withheld the payments on the ground that the materials supplied by the 1st petitioner are of substandard and erection of the pre- fabricated structures by the 2nd petitioner is defective. Much emphasis has been laid by the respondents on the report submitted by the Department of Civil Engineering, National Institute of Technology, Tiruchirapalli. Therefore, from the above and by taking into account the exercise of inspection made by Professor, Department of Civil Engineering, National Institute of Technology, Tiruchirapalli, who submitted a report dated 14-11-2009 pointing out certain aspects, the learned single Judge on an appraisal of the checkered events and facts and circumstances, found that there has been no whisper or any objection on the part of the appellants in regard to the quality of material supplied by them, and it is only on 4-2-2009, these objections were brought to the fore. As the amount withheld by the appellants is going far beyond the said limit of 10%, it cannot be said that there is any justification of the appellants herein for withholding the same. Accordingly, they are avoiding their liability to pay the amounts due to the respondents. Hence, ordered for the winding up. Even though, in this Court again falling back to the events and reiterating the very same pleas and the non- existence of basic jurisdictional facts which would necessitate for winding up as per Section 433 and 434 of the Companies Act requiring the inability to pay the debts, and it cannot be used for any arm stretching, it is seen that there is no dispute on the part of the appellants herein on the categorical observations and findings given by the learned Single Judge. If we go by the said findings, it shows that there has been supply and there was no objection all along earlir till after 4-2-2009. No reason is shown, neither any explanation is forthcoming nor anything is attributed as such. Therefore, prima facie, we are of the view that at this stage prior to admission one need not go into the correctness of the claims or the justification in opposition as set forth. It has to be seen prima facie that there is any liability, inability and avoidance thereof. With those findings staring at the appellants here and as nothing has been shown even at this late hour in this appeal to denounce the very reasoning, we are unable to accept any of the contentions urged on behalf of the appellants herein. Though, on behalf of the appellants reliance is placed on Walnut Packaging P.Ltd. v. Sirpur Paper Mills Ltd[1] where a Division Bench of this Court while considering the scope of the Company Court under Sections 433, 434 and 439 of the Companies Act, 1956 while ordering winding up, has laid–down the well laid principles and there is a reiteration thereof. We are not in dispute with the propositions laid down therein about mere inability not being a sufficient one. However, in the said case an acknowledgment made in the account was sought to be relied upon, which it was held that it would not constitute as such any base to treat as acknowledgment. In the circumstances, we are of the view that the said judgment either on facts nor on the principles as laid down can be a precedent to straight away follow in this case to find fault with the reasoning and finding of the learned Single Judge. Hence, we do not find any merits in the above appeal and the same is accordingly dismissed. No costs. ___________________ (B PRAKASH RAO, J) __________________ (B.N.RAO NALLA, J) DATE: 11-04-2011 grk [1] (2009) 148 Comp Cas 330 (AP)