The Madras High Court has ordered winding up of Chennai-based NEPC India Ltd, aircraft operators, following a company petition filed by Indian Oil Corporation Ltd, a public sector undertaking, u/s 433(e) r/w Sec 434 of Companies Act for “failing” to clear debts running to Rs 19 crore – Rs 6 crore by NEPC Ltd and Rs 13 crore by its sister concern, Skyline NEPC Ltd.

Allowing petition, Mr Justice V. Ramasubramanian, held that this was a “fit” case where the company was to be wound up. Intention of respondent appeared to be “dishonest”, as seen from the fact that when they needed fuel, respondent negotiated with petitioner and entered into agreements.

In its letters to petitioner, respondent did not dispute their liability or quantum of claim. All that the respondent stated was that petitioner was fully secured. “But today the respondent claims that they have no liability and that they have a counter-claim. When a person has taken such prevaricating stands and when the intention was dishonest, the Court should take note of public interest as well as conduct of the party,” the Judge observed.

According to the petitioner, the respondent agreed to a schedule of payment as per which liability would be cleared on or before January 31, 1998.

A tripartite agreement was entered into among petitioner, respondent and Skyline NEPC under which the respondent and Skyline NEPC agreed to clear outstandings. But the respondent and Skyline NEPC failed to honour their commitment, the petitioner said.

In a 41-page order, the Judge detailed how the respondent and its sister concern failed to live up to their commitment to the petitioner. It was clear that the respondent had “become insolvent” and was unable to pay its debts, requiring winding up of the company.

The petitioner entered into an aviation fuel supply contract on July 23, 1996, with the respondent.

As per the same, the petitioner supplied aviation fuel, and so on, to the respondent and its sister concern. As on April 30, 1997, a sum of Rs 6 crore and Rs 13 crore became due and payable by the respondent and sister concern.

The respondent, inter-alia, alleged that the petitioner was guilty of suppression of material facts relating to acquittal of respondent in proceedings under Section 138 of Negotiable Instruments Act.

The petitioner had not invoked the just and equitable ground available under Section 433(f).

Passing order for winding up of the respondent-company, the Judge appointed Official Liquidator of High Court as liquidator of the respondent.

He was directed to take charge of assets of the respondent.

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