Case Note & Summary
The respondent, Aerotron Limited, a company incorporated in the United Kingdom, filed a company petition under Section 433(e) and (f) read with Sections 434 and 439(1)(b) of the Companies Act, 1956, seeking winding up of the appellant, Kingfisher Airlines Limited, on the ground that the appellant was unable to pay its debts. The respondent claimed that the appellant had acknowledged its liability to pay certain outstanding amounts under an agreement dated 24.02.2012, wherein the appellant agreed to pay the dues in installments spread over several months between March and October 2012. The appellant contested the petition, denying liability on the ground that the dues were disputed and also raised an objection that the respondent company was not entitled to file the petition. The learned Company Judge, by order dated 06.12.2013, admitted the winding up petition. Aggrieved, the appellant filed the present appeal under Section 483 of the Companies Act, 1956 read with Section 4 of the Karnataka High Court Act, 1961. The High Court of Karnataka, after hearing the parties, dismissed the appeal, holding that the debt was not bona fide disputed as the appellant had acknowledged the liability in the agreement and failed to make payments as per the schedule. The court found no merit in the appeal and upheld the order of the Company Judge.
Headnote
A) Company Law - Winding Up - Bona Fide Dispute - Sections 433(e), 434, 439(1)(b) Companies Act, 1956 - The respondent filed a winding up petition under Section 433(e) and (f) read with Sections 434 and 439(1)(b) of the Companies Act, 1956, claiming that the appellant had acknowledged its liability in an agreement dated 24.02.2012 and failed to pay installments. The appellant denied liability, alleging disputed dues. The court held that the debt was not bona fide disputed as the appellant had acknowledged the liability in the agreement and failed to make payments as per the schedule. The winding up petition was maintainable. (Paras 2-3)
Issue of Consideration
Whether the appellant-company had a bona fide dispute regarding the debt claimed by the respondent, so as to resist the winding up petition.
Final Decision
Appeal dismissed. The order dated 06.12.2013 passed by the learned Company Judge in Co.P No.214/2012 is upheld.
Law Points
- Winding up petition under Section 433(e) and (f) of Companies Act
- 1956
- Bona fide dispute of debt
- Debt acknowledgment
- Installment agreement
- Company unable to pay debts
