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IBA Health (I) Pvt. LTD.: Info-Drive Systems Sdn. BHD

The Supreme Court overturned the CLB's ruling, finding that where a company has a bona fide dispute over the debt, the petitioner cannot be regarded as a creditor for the purposes of winding up

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Haris Jamil
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35 views9 pages

IBA Health (I) Pvt. LTD.: Info-Drive Systems Sdn. BHD

The Supreme Court overturned the CLB's ruling, finding that where a company has a bona fide dispute over the debt, the petitioner cannot be regarded as a creditor for the purposes of winding up

Uploaded by

Haris Jamil
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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IBA Health (I) Pvt. Ltd.

v.
Info-Drive Systems Sdn. Bhd.

[2010]159CompCas369(SC)

By: Haris Jamil


Roll No.: 882021
B.BA. LL.B.
Facts…
18th February, 2002: Entered into Co-operation Agreement

19th December, 2003: Both entered into deed of settlement because of


dispute.
18th March, 2006: Further dispute and compromise

20th March, 2006: Respondent received an amount of RM 1,069,583.29

2nd February, 2007: Respondent issued an invoice for payment of debt

In response: Appellant denied the liability

4th July, 2007: Respondent asked to pay the debt within 15days

19th December, 2007: Appellant again denied the liability

16th August, 2008: Notice u/s 434 served, for the payment of debt

Debt not paid by the appellant within prescribed time, respondent


moved to CLB
Karnataka CLB ruled against
appellant
Arguments: Appellant

Arguments: Respondent
Supreme Court
• Substantial Dispute

• Commercially Solvent

• Malicious Proceedings for


winding up

• Public Policy Considerations


Ratio decidendi

Where the company has a bona fide dispute,


the petitioner cannot be regarded as a
creditor of the company for the purposes of
winding up.
Cases referred :
 Garodia Hardware Store v. Nimodia Plantations and
Industries Pvt. Ltd. AIR 1998 (Gau.) 367.

 Amalgamated Commercial Traders (P.) Ltd. vs A.C.K.


Krishnaswami and Anr. (1965) 35 Comp.Cas 456 SC
Committee on law relating to
Insolvency of companies headed by Mr. Justice V.
Balakrishna Eradi, 1999

• Where the company is unable to pay it debts in the manner


provided for in Section 434 (1) of the Companies Act, the
existing limit of Rs. 500 is far too low and unrealistic and
may be raised to ` 1 lakh.
• The Committee recommended that with a view to avoid
multiplicity, the national tribunal should be conferred with
the jurisdiction and power to deal with matters under the
Companies Act, 1956 presently exercised by the Company
Law Board.
Winding up for non-payment of debt: Law In
United Kingdom

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