Judgment JMC Projects (India) Ltd (hereinafter called “the petitioner”) seeks winding up of Bhagyanagar Infrastructure Limited (hereinafter called “the 1st respondent), under Sections 433 (e) & (f) read with Sections 434(1)(a) & (c) and Section 439(1)(b) of the Companies Act, 1956. Sri S. Ramachandra Rao, Learned Senior Counsel appearing on behalf of the petitioner, would submit that the petitioner is not seeking winding up of the first respondent under Section 433(f), and it would suffice if this Court were to examine his contentions under Section 433(e) of the Act. The petitioner, a company established in the year 1982, undertakes civil and structural works for commercial and residential buildings, industrial, infrastructure and power projects at various locations in India. It claims to be one of the few construction companies to be certified under ISO 9001:2008 quality system, ISO 14000:2004 etc. The 1st respondent was incorporated as a public limited company on 7.7.2006. Its registered office is situated at Secunderabad. Its authorized capital is Rs.7.50 Crores divided into 75 lakhs equity shares of Rs.10/-each. The main objects of the 1st respondent is to carry on, in India and abroad, the business of providing infrastructure and ancillary activities, besides real estate business. The 1st respondent proposed construction of the “Visual Soft IT park building” at Nanakramguda, Hyderabad for Visual Soft Technologies which was later amalgamated with the 2nd respondent with effect from 1.10.2006. Sycone Group was appointed as the Project Management Consultant. In the notice inviting tenders, issued by Sycone Group on 26.2.2007, the 1st respondent was notified as the employer. The petitioner was awarded the contract, for construction of Phase-I of “Visual Soft IT park building”, with a contract value of Rs.48.25 Crores, and Phase-II with a contract value of Rs.48.25 Crores, i.e., for a total contract value of Rs.96.50 Crores. The 1st respondent issued a letter of intent (LOI) dated 30.5.2007 to the petitioner, and paid them mobilization and material advance. The said LOI required the petitioner to submit bills to the Project Manager who, in turn, had to forward them to the 1st respondent. On 25.6.2007 Visual Soft Technologies Limited issued another LOI to the petitioner, for construction of Phase-I, at a contract value of Rs.48.25 Crores. The said LOI required the petitioner to submit bills to the Project Manager who, in turn, had to forward them to the 1st respondent. On 25.6.2007 Visual Soft Technologies Limited issued another LOI to the petitioner, for construction of Phase-I, at a contract value of Rs.48.25 Crores. In the kick-off meeting held on 13.6.2007, it was clarified that, while the client would be Visual Soft Technologies Limited, the contract agreements would be executed, on behalf of all the executing agencies, by the 1st respondent; and all communications should be directed through Sycone Group (Project Management Consultant). The 1st respondent handed over the site to the petitioner on 25.6.2007, and requested them to make necessary arrangements to commence construction. The petitioner claims to have commenced and completed construction, upto the 4th floor, by the end of November, 2008. The 1st respondent handed over the site to the petitioner on 25.6.2007, and requested them to make necessary arrangements to commence construction. The petitioner claims to have commenced and completed construction, upto the 4th floor, by the end of November, 2008. It is their case that the 1st respondent monitored the project conducting weekly progress review meetings; they had submitted running account bills, in accordance with the LOI dated 30.5.2007, to the Project Manager concerned who, after verification, had certified the bills and had submitted them to the 1st respondent for effecting payment; 17 RA Bills and 14 rate difference bills were submitted upto 1.12.2008; as these bills were certified, the 1st respondent had to pay them Rs.26,92,74,218/-, as against which they were paid Rs.16,15,73,588/-till the last payment on 21.10.2008; in the progress review meetings dated 3.9.2007, 10.9.2007, 18.9.2007 and 24.9.2007 they had requested the 1st respondent to release payment; the Project Management Consultant was requested, by letter dated 13.11.2007, to expedite payment of the bills; the 1st respondent, on their own volition, had involved the 4th respondent as their partner; only on the instructions of the 1st respondent, vide letter dated 3.3.2008, did they accept payment from the 4th respondent; the 4th respondent had, on behalf of the 1st respondent, paid them certain amounts; they were not a party to any agreement between the 1st and the 4th respondent; they had submitted R.A. Bills upto 01.12.2008, and R.D. Bills upto 01.09.2008; as on 31.12.2008, the 1st respondent was liable to pay them Rs.10,77,00,630/-which, along with interest at 18% per annum from 01.01.2009 till the date of payment, is the debt due to them; the 4th respondent issued cheque dated 15.7.2008, for Rs.3,42,06,900/-, in their favour as ad-hoc payment, against RA Bill No.10 dated 29.5.2008, after deducting Rs.7,93,100/-towards TDS; the said cheque was returned thrice for insufficient funds; PCR No.6962 of 2009 in C.C. No.6093 of 2009 was filed, under the Negotiable Instruments Act, before the XIV Chief Metropolitan Magistrate, Bangalore on 21.2.2009, which case is still pending; the 1st respondent, by their letter dated 11.02.2009, had informed that payments would be duly organised and met; the 1st respondent had failed and neglected to make payment; statutory notice dated 27.10.2010 was issued, under Section 434(1)(a), calling upon the 1st respondent to pay Rs.10,77,00,630/-with interest at 18% per annum within three weeks; by their reply letter, sent on 18.11.2010, the 1st respondent informed that the entire investment made by them, upto that point of time, had been reimbursed; there was no correspondence after March, 2008; and they were not due any money; the 1st respondent was evading payment of the debt due; and the 1st respondent was not doing any viable business, was unable to pay its debts, and had lost its substratum. In its counter affidavit, the 1st respondent submits that, in or about March, 2008, they had entered into a development agreement with the 4th respondent, in terms of which the development activity was taken over by the 4th respondent; the petitioner had knowledge of such an agreement; their entire investment in the construction, upto that point of time, of Rs.9,93,02,818/-, was reimbursed by the petitioner; the letter dated 03.03.2008 shows that the amounts receivable, if any, by the petitioner was payable by the 4th respondent, and the 1st respondent was absolved from making payment; in view of the development agreement, all further instructions with respect to construction was required to be given by the 4th respondent; all bills were to be submitted by the petitioner to the 4th respondent through the Project Management Consultant; there was no correspondence between the petitioner and the 1st respondent after March, 2008; the petitioner did not construct the building as per specifications, and seriously compromised the quality of construction; the 1st respondent had to appoint outside consultants to identify and rectify the same, which resulted in partial demolition of the building; although the LOI/work order was with respect to three basements and 11 upper floors, GHMC had granted permission only for construction of three basements and three upper floors including the ground floor; the petitioner cannot claim payment for undertaking construction without proper municipal permission; they did not attend, and are unaware of the review meetings dated 28.4.2008, 16.7.2008, and 30.07.2008, or the processing of running account Bill No.11 by the newly appointed consultant; they have no knowledge of the cheque alleged to have been issued by the 4th respondent, and its being dishonoured; the very fact that the petitioner had filed a criminal case only against the 4th respondent fortified their contention that they were not responsible for the alleged dues; the letter dated 3.3.2008 states that the dues prior to the agreement had been adjusted between the petitioner, the 1st and the 4th respondent; the earlier transactions between the petitioner and the 1st respondent stood effaced by virtue of the letter dated 3.3.2008, and the 1st respondent is not liable to pay any further sums; they had issued letter dated 11.2.2009 only to ensure that the project would go on, as they also had an interest in the construction; at any rate there was neither taking over of liabilities, nor an arrangement in the nature of any guarantee; the 1st respondent sent its notice dated 18.11.2010, in reply to the notice issued by the petitioner dated 27.10.2010; it is beyond comprehension how several entities, which are allegedly due amounts to the petitioner, can be wound up in respect of the same quantum of money, and that too in one company petition; the amount claimed from all the respondents was not payable by the 1st respondent; and the company petition is misconceived. In their counter affidavit, the 2nd respondent would state that, on the petitioner’s own showing, there was no privity of contract between them; and, as there was no allegation against the 2nd respondent in the notice dated 27.10.2010, it was not necessary for them to reply thereto. A counter affidavit dated 16.7.2011 is filed on behalf of respondents 3 and 4 wherein it is stated that there is no privity of contract between them and the petitioner; the company petition is not maintainable against them; they had issued a cheque in favour of the petitioner which was returned; the petitioner had filed a case which is pending; prior to the case being filed, the petitioner had issued a notice on 6.1.2009; by their letter dated 17.1.2009, they had informed the petitioner that there was no valid contract between them; the relief sought for by the petitioner was only against the 1st respondent; the other respondents were neither necessary nor proper parties to the petition; and the company petition was liable to be dismissed against them. In their affidavit dated 11.6.2012, respondents 3 and 4 would submit that the petitioner had entered into a contract with the 1st respondent on certain terms and conditions whereby the 1st respondent had made certain payments; they had entered into a separate commercially and legally binding agreement with the 1st respondent; they were involved in the project as the 1st respondent was unable to look after the work; they noticed several major defects in construction, and brought them to the notice of the 1st respondent; they decided, therefore, to withdraw from the project; in terms of the agreement, between them and the first respondent, they had made certain payments; Rs.25.00 Crores was paid to the petitioner under the instructions of the 1st respondent; thereafter, upon reconciliation of the accounts, the 1st respondent realized that certain excess payment was made to the petitioner and, therefore, sought refund; as there was no contract between them, the petitioner was obligated to reimburse Rs.9,93,02,818/-to the 1st respondent, and a similar amount to them; and the company petition was liable to be dismissed against them. A common reply affidavit dated 10.08.2011 is filed by the petitioner wherein it stated that they had constructed the building as per specifications and standards without compromising on quality; the falsity of the 1st respondent’s claim is evident from the fact that they did not raise these contentions in their reply notice dated 18.11.2010; the petitioner is not a party to, and is not even aware of, the contents of the secret development agreement between the 1st and 4th respondents; the 1st respondent, having received the petitioner’s letter dated 03.03.2008, did not reply; the 1st and the 4th respondents had played fraud on the Bank of India; they had borrowed Rs.25 crores, and had misappropriated Rs.19 crores; the 1st respondent had, vide letter dated 3.3.2008, directed the petitioner to retain only Rs.6 crores though, as on 01.03.2008, the outstanding dues were Rs.10,36,22,477/-; the petitioner had informed the 1st respondent, by their letter dated 03.03.2008, that the retention was to the exclusion of the balance payments to be received subject to certification by the 1st respondent; the 2nd respondent is the beneficiary of the contract along with the 1st respondent; the 2nd respondent had issued the letter of intent dated 25.06.2007, and its representative had participated in almost all the subsequent project review meetings; respondents 3 and 4 had suppressed the fact that there was a contract between the 1st respondent and themselves, and the petitioner was not a party thereto; and, as such, the Company Petition must be allowed. Sri S. Ramachandra Rao, Learned Senior Counsel, would submit that none of the respondents had disputed the petitioner’s claim for being paid Rs.10,77,00,630/-; they merely disowned responsibility, and had thrown the burden of payment on others; the 1st respondent had stated that the 4th respondent was alone liable to pay, whereas it is the case of the 4th respondent that the 1st respondent had to pay; from the letter of the 1st respondent dated 11.02.2009, it was evident that facts prior to March, 2008 were not only relevant, but essential for proper adjudication; the petitioner had retained Rs.6 crores towards their outstanding bills as on 03.03.2008, to the exclusion of the balance payments to be received by them, subject to certification; the 1st respondent did not state, in their letter dated 03.03.2008, that the contractual relationship between them and the petitioner was terminated from that date onwards; nor did they state that the amount paid to them was towards reimbursement of the amounts spent by them, and they were not responsible for payment of the outstanding dues thereafter; the petitioner was not a party to the internal arrangement between the 1st and the 4th respondent; it is the 1st respondent which liable to pay the amounts due to the petitioner; the letter of the 1st respondent dated 11.02.2009 was in accordance with the letter of intent dated 30.05.2007; even, according to the 1st respondent, the 4th respondent was its partner; the 4th respondent had, in fact, acted as the agent of the 1st respondent which is substantiated by their submission that they had paid amounts to the petitioner on behalf of the 1st respondent; as the first respondent had issued a letter of intent, for construction of three basements and 11 upper floors, it was their responsibility to get permission from the statutory authorities; the petitioner was only a contractor, and had acted as per the instructions/directions of the 1st respondent in making construction; the 1st respondent had keenly monitored, and controlled, construction through its agents, including the 4th respondent; the first respondent had neglected to pay the debt due to the petitioner despite the statutory demand; the dispute raised by them was spurious, speculative, illusory, misconceived and a moonshine; in view of the presumption under Section 434(1)(a), and as the dispute raised by them is not bonafide, the first respondent must be deemed to be unable to its debts necessitating the petition being admitted and advertised. Sri S. Ravi, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that the conduct of the parties showed that the 4th respondent was substituted as the employer in the place of the 1st respondent; the petitioner submitted their bills, after 03.03.2008, only to the 4th respondent, and not the 1st respondent; after the aforesaid date, no correspondence had been entered into by the petitioner with the 1st respondent; all meetings thereafter were attended by respondents 3 and 4 alone, and not the 1st respondent; the dishonoured cheque of Rs.3.5 crores was issued by the 4th respondent which shows that it is they, and not the 1st respondent, which is liable to make payment for the debt, if any, owed to the petitioner; by filing a case, the petitioner also understood that Rs.3.5 crores was in discharge of the debt due to them from the 1st 4th respondent; by necessary implication, no debt is due to them from the respondent; after presentation of the winding-up petition, the petitioner had filed a civil suit against all the four respondents, claiming amounts from them jointly and severally; it is evident therefrom that the petitioner is not even certain as to who is liable for the debt due to them; the winding up petition is filed only to coerce the 1st respondent to pay the amount which they are not liable to pay; the petitioner has taken inconsistent stands – on the one hand they initiated criminal proceedings for dishonour of the cheque issued by the 4th respondent, and on the other have filed the present winding up petition 4th alleging that the debt due to them is from the 1st respondent, and not the respondent; there is a bonafide dispute regarding the debt due; and, as such, the winding up petition is liable to be dismissed. Sri E. Manohar, Learned Senior Counsel appearing on behalf of the 2nd respondent, would submit that, since the 1st respondent had, by its letter dated 03.03.2008, asked the petitioner not to take into consideration the letter of intent issued earlier by the 2nd respondent, it is evident that a contract exists only between the petitioner and the 1st respondent, and the earlier contract with the 2nd respondent had been rescinded; and, as the petitioner seeks winding up of the 1st respondent alone, they cannot hold the second respondent liable for payment of the amounts allegedly due to them. Sri O. Manohar Reddy, Learned Counsel for respondents 3 and 4, would submit that even in their reply, to the notice issued by the petitioner before initiating criminal proceedings under Section 138 of the Negotiable Instruments Act, the 4th respondent had informed the petitioner that there was no privity of contract between them; the 4th respondent had entered into an agreement with the 1st respondent and, in supervising the work relating to the construction of the Visual Soft IT park, had merely acted at their behest; that did not render them liable for payment of the debt due to the petitioner; and the grievance, if any, which the petitioner may have can only be against the 1st respondent. Before examining the submissions made on either side, it is useful to briefly note the scope of an enquiry on the admission or otherwise of the Company Petition. It is for the Court to decide whether a strong prima facie case on facts is made out for admission of a winding up petition. (ICDS Limited v. Kamar Trading Co. (P) Ltd ((2005) 125 CC 849 (MP))). In appropriate cases the Court may, before a petition is admitted and advertised, hold a summary enquiry to ascertain whether a prima facie case is made out by the petitioning creditor. At the stage of summary enquiry the Court is called upon to satisfy itself that it is a case for admission and advertisement and nothing more. In appropriate cases the Court may, before a petition is admitted and advertised, hold a summary enquiry to ascertain whether a prima facie case is made out by the petitioning creditor. At the stage of summary enquiry the Court is called upon to satisfy itself that it is a case for admission and advertisement and nothing more. Before admitting and advertising a petition for winding-up the Court, in a summary enquiry, after hearing the petitioning-creditor and the Company, should record its prima facie findings on (i) Whether the petitioning-creditor is a creditor to whom the Company owes an ascertained sum of money or substantially ascertained sum of money; (ii) Whether the said debt is within limitation; (iii) Whether the defence of the Company is valid and bonafide or whether it is a mere moonshine; (iv) whether, from the material on record, a presumption arises that the Company is unable to pay its debts as contemplated under S. 434 (1) (a) or (b) as the case may be; or (v) Whether, from the material on record, the Court is prima facie satisfied that the Company is commercially insolvent as contemplated under S. 434 (1) (c ). The Court takes only a prima facie view. (Goetze India Ltd. v. Pure Drinks (New Delhi) Ltd ((1994) 80 Comp Cas 340);Reliance Infocomm Ltd. v. Sheetal Refineries Pvt. Ltd ((2008) 142 Comp.Cas.170); Airwings (P). Ltd. v. Viktoria Air Cargo Gmbh Langer Kornweg ( AIR 1995 Kar 69 );American Express Bank Ltd. v. Core Health Care Ltd ((1999) 96 Comp Cas 841 (Guj))). The Court, at the stage of admission, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The Company Court is expected to go into the causes of the refusal by the company to pay before coming to that conclusion. The Court should ascertain whether the company has a defence which is substantial in nature and, if not adjudicated in a proper forum, would cause serious prejudice to the company. (IBA Health (India) Private Limited v. Info-Drive Systems Sdn. Bhd ((2010) 10 SCC 553)). For a company petition to be admitted, the creditor has to make out a prima facie case. (IBA Health (India) Private Limited v. Info-Drive Systems Sdn. Bhd ((2010) 10 SCC 553)). For a company petition to be admitted, the creditor has to make out a prima facie case. Once a prima facie case is made out by the petitioner for admission of the company petition, the Court will have to examine whether the respondent has, prima facie, put forth a substantial defence. The principles, on which the Court acts in this regard, are first that the defence of the company is in good faith and one of substance; secondly, the defence is likely to succeed in point of law; and, thirdly, the company adduces prima facie proof of the facts on which the defence depends. (Bharat Overseas Bank Limited v. Saritha Synthetic and Industries Ltd., Anakapally, Srikakulam Dist ( (2004) 3 ALT 85 ); Reliance Infocomm Ltd. (Supra);Mediquip Systems (P) Ltd. v. Proxima Medical Systems Gmbh ( (2005) 7 SCC 42 ); Madhusudan Gordhandas and Co. v. Madhu Woollen Industries P. Ltd. ( AIR 1971 SC 2600 )). Where the debt is disputed, the court has to see, first, whether the dispute on the face of it is genuine or merely a cloak for the company's real inability to pay the just debts. (Enernorth Industries Inc. v. VBC Ferro Alloys Ltd ((2006) 133 CC 130 (AP));TDICI Ltd. v. Neptune Inflatables Ltd. ([1999] 1 Comp LJ 240 (Mad)); United Western Bank Ltd. In re ([1978] 48 Comp Cas 378 (Bom))). From the facts noted hereinabove, it can be seen that Letters of intent were issued to the petitioner separately both by the 1st and the 2nd respondents. However, by their letter dated 03.03.2008, the 1st respondent informed the petitioner that the letter of intent dated 25.06.2007, issued hitherto by the 2nd respondent, may not be taken cognizance of. Since the 1st respondent claims that they had put an end to the said contract, by their letter dated 03.03.2008, it is useful to extract the said letter in its entirety. BHAGYANAGAR INFRASTRUCTURE LTD. 5th Floor, Surya Towers, Sardar Patel Road, Secunderabad – 500 003, A.P, India. Phones Office: 27845119, 27845046, 27841198 Telefax: 0091-40-27848851, 27818868 Internet: http://www.surana.com E-mail: surana@hd1.vsnl.net.in BIL/NS/017/08 March 3, 2008 M/s J M C Projects India Ltd. South Regional Office, GoldTower, No.50, 2nd Floor, Residency Road, Bangalore 560 025. Kind Attn: Mr. BHAGYANAGAR INFRASTRUCTURE LTD. 5th Floor, Surya Towers, Sardar Patel Road, Secunderabad – 500 003, A.P, India. Phones Office: 27845119, 27845046, 27841198 Telefax: 0091-40-27848851, 27818868 Internet: http://www.surana.com E-mail: surana@hd1.vsnl.net.in BIL/NS/017/08 March 3, 2008 M/s J M C Projects India Ltd. South Regional Office, GoldTower, No.50, 2nd Floor, Residency Road, Bangalore 560 025. Kind Attn: Mr. V. Lanka, President Dear Sirs, Ref:Letter of Intent BIL/NS/046/07 dated 30.05.2007 Letter of Intent from Visualsoft vide VTL/JMC/07-08 dt:25.06.07. *** In reference to the above and in furtherance to our discussion we are pleased to inform you that we have involved a company by name M/s. Prakruthi Infrastructure & Deve. Co. Ltd., Bangalore to partner us for this venture. Please take note that upon our specific request in lieu of the LOI referred herein to above, and commensurate to your progress of construction and submission of bills the payments shall be released by Prakruthi Infrastructure & Deve. C. Ltd. to JMC directly. Under the above premise, we request you to kindly accept the payment of Rs.25 crores (Rupees twenty five crores) paid by Prakruthi Infrastructure & Deve. Co. Ltd. in favour of J M C Projects India Ltd., vide pay orders No.076551, 076552, 076553 for an amount of Rs.10 crores, 10 crores & 5 crores respectively, totaling to Rs.25 crores. We request you to kindly adjust your outstanding bills with respect to the letter of intent dated 30.05.2007 to an extent of Rs.6 crores. Kindly refund an amount of Rs.9,93,02,818/-in favour of Bhagyanagar Infrastructure Ltd. and the balance of Rs.9,06,97,182/-to M/s. Prakruthi Infrastructure Deve. Co. Ltd. Further, please note that the letter of intent dated 25.06.2007 issued by M/s. Visualsoft Technologies Ltd., which is now known as M/s. Megasoft in favour of J M C Projects India Ltd., may not be taken cognizance of since they have entered into a restated construction contract with ourselves dated 18.10.2007 which empowers us to contract with J M C Project India Ltd. Hence our LOI No.BIL/NS/046/07 may be construed as a construction contract. Kindly do the needful and oblige. Yours sincerely, for BHAGYANAGAR INFRASTRUCTURE LTD. Narender Surana Director. 03.03.2008 From the aforesaid letter it is evident that the 1st respondent had involved the 4th respondent to partner them in the venture; and their letter of intent BIL/NS/046/047 dated 30.05. 2007, issued in favour of the petitioner, was to be construed as the construction agreement. Yours sincerely, for BHAGYANAGAR INFRASTRUCTURE LTD. Narender Surana Director. 03.03.2008 From the aforesaid letter it is evident that the 1st respondent had involved the 4th respondent to partner them in the venture; and their letter of intent BIL/NS/046/047 dated 30.05. 2007, issued in favour of the petitioner, was to be construed as the construction agreement. The said letter dated 03.03.2008 does not reflect the petitioner being informed that their contract had come to an end; or that the construction contract had been substituted by a new contract recognizing the 4th respondent as the “employer” in the place of the 1st respondent; or even that they were no longer liable to pay the dues of the petitioner. The petitioner was merely informed, by the said letter dated 03.03.2008, that payments would henceforth be released to them by the 4th respondent directly. The said letter is merely an intimation to the petitioner that the 4th respondent was being involved as their partner. The only inference which can be drawn is that the 4th respondent was being involved to act at the behest, and not in substitution, of the 1st respondent; the construction contract i.e., the letter of intent dated 30.05.2007 continues to remain in force; and the 1st respondent was not substituted by the 4th respondent as the “employer” under the said contract. The petitioner was requested, under the said letter dated 03.03.2008, to receive the pay orders issued by the 4th respondent in their favour; to adjust their outstanding bills to an extent of Rs.6 crores; refund Rs.9,93,02,818/-to the first respondent; and Rs.9,06,97,182/-to the 4th respondent. The said letter does not state that refund of Rs.9,93,02,818/-was towards reimbursement of the amounts invested in the construction contract by the first respondent. The contention that, by their letter dated 03.03.2008, the 1st respondent had put an end to the contract between them and the petitioner; and Rs.9,93,02,818/-, paid by the petitioner to the 1st respondent, was in reimbursement of their entire dues till that date, is not borne out even on a plain reading of the said letter. Neither has the 1st respondent stated therein that their contractual relationship with the petitioner had come to an end nor that payment of Rs.9,93,02,818/-was in total reimbursement of the dues of the 1st respondent till that date. Neither has the 1st respondent stated therein that their contractual relationship with the petitioner had come to an end nor that payment of Rs.9,93,02,818/-was in total reimbursement of the dues of the 1st respondent till that date. The letter dated 03.03.2008, in effect, reflects the intention of the first respondent to continue the contract, under the letter of intent dated 30.05.2007, even after 03.03.2008. On the very same day, i.e., on 03.03.2008, the petitioner addressed a letter to the 1st respondent, receipt of which has not been denied by the first respondent in their counter affidavit. It is useful to extract the said letter in its entirety. JMC Projects (India) Ltd. ENGINEERS & CONSTRUCTORS 4th Floor, Celina Piaza, Plot No.140, Prenderghasi Road, Secunderabad – 500 003. Phone: 040-32055269/66319330 Fax: 040-6319329 E-Mail: hyd@jmcprojects.com Web:www.jmcprojects.com March 3, 2008 Director M/s. Bhagyanagar Infrastructure Ltd SuryaTower, SP Road, Secunderabad – 500 003. Kind attn: Mr. Narender Surana, Director. Dear Sirs, Sub: Our Letter of Intent with yourselves dated 30.05.2007 vide BIL/NS/046/07. With reference to the above and in continuation of your letter dated 3rd March, 2008 we acknowledge receipt of an amount of Rs.25 crores paid to us vide pay orders No.076551, 076552, 076553 for an amount of Rs.10 crores, 10 crores & 5 crores respectively, totaling to Rs.25 crores from Prakruthi Infrastructure Deve.Co. Ltd., on your behalf. As per your advise we are herewith retaining a payment of Rs.6 crores against our outstanding bills as on date. This retention is to the exclusion of the balance payments to be received subject to certification from BIL. The balance of Rs.19 crores is being refunded vide cheque No.940369 dated 5.3.08 drawn on ICICI Bank, Madhapur branch in favour of Bhagyanagar Infrastructaure Ltd., for an amount of Rs.9,93,02,818/-and an amount of Rs.9,06,97,182/-vide cheque No.94037 dated 5.3.08 drawn on ICICI Bank, Madhapur branch in favour of M/s. Prakruthi Infrastructure Devel. Co. Ltd. as desired by yourselves vide your letter No.BIL/NS/017/08 dated 3rd March, 2008. We look forward to your settling our present outstanding at the earliest. Thanking you, Yours sincerely, for JMC (Projects) India Ltd. President. Co. Ltd. as desired by yourselves vide your letter No.BIL/NS/017/08 dated 3rd March, 2008. We look forward to your settling our present outstanding at the earliest. Thanking you, Yours sincerely, for JMC (Projects) India Ltd. President. Encl: above mentioned cheques (2 Nos.) It is clear from the said letter that the petitioner had informed the 1st respondent that they were retaining Rs.6 crores, against their outstanding bills as on that date, which was to the exclusion of the balance payment to be received by them subject to certification by the 1st respondent, and that their outstanding bills should be settled at the earliest. It is not even the case of the 1st respondent that they had replied to the said letter, let alone their having informed the petitioner that they were not liable to pay any outstanding bills. The submission of Sri S. Ravi, Learned Senior Counsel, that, subsequent to 03.03.2008, the 1st respondent had not entered into any correspondence with the petitioner, does not merit acceptance as, along with the company petition, a letter addressed to the petitioner by the 1st respondent dated 11.02.2009 is enclosed, the contents of which read as under: February 11, 2009 To JMC India Limited, Southern Regional Office, GoldTower, No.50, 2nd Floor, Residency Road, BangaLORE-560025. Sir, We are conscious on the fact that there is delay in payment of the cost of construction and that your running bills are stuck up with M/s. Prakruthi Infrastructure Development Company Limited. It is in the interest of all the parties that the development is completed in accordance with the schedules agreed upon between the parties in the Development Agreement dated 22.03.2008 between ourselves and Prakruthi Infrastructure Development Limited and primary agreement between ourselves and Visual Soft Technologies Limited (Megasoft Limited). It has come to our notice that the building was not constructed as per the norms of the contract. With regards to this we have appointed outside consultants to rectify the same and they have advised us to partly re-strengthen the building and partly to be broken as there was due negligence from your side. Further we are not asking for any compensation for the delay or inconsistencies in the quality of the building. With regards to this we have appointed outside consultants to rectify the same and they have advised us to partly re-strengthen the building and partly to be broken as there was due negligence from your side. Further we are not asking for any compensation for the delay or inconsistencies in the quality of the building. Further as a matter of goodwill, we request you to cooperate with us in completion of the project and not to slow down it and we assure that your payments will be duly organized and met. Further in terms of the various agreements we are entitled for total 10% of the constructed areas in the proposed project. We are willing to set apart the part of our entitlement over which you can have a lien for recovery of your dues. This will safeguard your interest and will also ensure that the project is completed on time. Kindly do the needful. Thanking you, Yours sincerely. Bhagyanagar Infrastructure Limited. It is evident from the said letter dated 11.2.2009 that the 1st respondent had acknowledged that there was a delay in payment of the cost of construction, and the petitioner’s running bills were stuck with the 4th respondent. If, as contended by Sri Ravi, Learned Senior Counsel, the contract between the 1st respondent and the petitioner had come to an end by 03.03.2008, there was no reason for the 1st respondent to assure the petitioner, vide letter dated 11.02.2009, that their payment would be organized and met; and they were willing to safeguard the petitioner’s interests, (i.e., for payment of their outstanding dues), by setting apart a part of their entitlement as lein in their favour. The contention that there were several defects in the construction by the petitioner; and this justified the 1st respondent not paying the amounts, claimed by the petitioner, to be due to them is also not tenable as the 1st respondent by their letter dated 11.02.2009, while observing that the building was not constructed as per norms and specifications of the contract, informed the petitioner that they were not seeking any compensation for the delay or inconsistencies in the quality of the building. Having absolved the petitioner of any liability in this regard, it is not now open to the 1st respondent to contend that, failure to make payment, was only on account of deficient construction of the work by the petitioner. Having absolved the petitioner of any liability in this regard, it is not now open to the 1st respondent to contend that, failure to make payment, was only on account of deficient construction of the work by the petitioner. That the 1st respondent had addressed the letter dated 11.02.2009 to the petitioner is not in dispute, and has been admitted by them in their letter dated 18.11.2010. It is evident, therefore, that under the construction contract (i.e., the LOI dated 30.05.2007) it was the 1st respondent which was liable to make payment to the petitioner, and it is for this reason that they were willing to set apart a part of their entitlement as lein in the petitioner’s favour for recovery of their dues. On the question whether the 4th respondent stood substituted in the place of the first respondent under the LOI dated 30.05.2007, it must be borne in mind that a contract subsists till the rights and obligations thereunder are finally performed. The general rule is that, though an employer may assign the benefits and obligations of a contract to an assignee, he will not be relieved of his obligations towards the contractor, unless the contractor is also a party to the assignment, in which event there is an assignment coupled with novation (a new contract between the assignee and the contractor). (Shrikant v. Vasantrao ( (2006) 2 SCC 682 )). Section 62 of the Indian Contract Act stipulates that, if the parties to a contract agree to substitute a new contract for it, the original contract need not be performed. The marginal note to the Section uses the word “novation” which means discharge of one debt or debtor and the substitution of a new debt or debtor. The essential feature, therefore, is that when a contract is substituted, the rights under the original contract are relinquished or replaced by the new contract. One of the requisites of such novation is the agreement of all the parties to the new contract. Novation involves an annulment of one debt and the creation of another. In every case of this nature the court has to consider not only whether the new debtor has consented to assume liability but also whether the creditor has agreed to accept the liability of the new debtor in substitution of the original debtor. Novation involves an annulment of one debt and the creation of another. In every case of this nature the court has to consider not only whether the new debtor has consented to assume liability but also whether the creditor has agreed to accept the liability of the new debtor in substitution of the original debtor. Under law, therefore, one of the requisites of novation is the agreement of the parties to the new contract. It is essential for the principle of novation to apply that there must be mutual consent of all the parties concerned.(State Bank of India v. Mrs. T.R. Seethavarma ( AIR 1995 Ker 31 ); Appukutta Panicker v. Anantha Chettiar ( AIR 1966 Ker 303 )). One of the essential requirements of ‘Novation’, is that there should be complete substitution of a new contract in place of the old. It is in that situation that the original contract need not be performed. (Lata Construction. v. Dr. Rameshchandra Ramniklal Shah ( AIR 2000 SC 380 )).Novation is not a mere variation of some of the terms of the contract. It should rescind or extinguish the previous contract. Whether an agreement entered into is a substitution of an old contract or not is always a question of fact depending also on the intention of the parties. The intention of the parties, no doubt, may be inferred from the contents of the document, but in order to gather their intention one should look to the substance of the matter and not to the mere form. (State of Bihar v. Ram Ballabh Das (AIR 1960 Patna 400); Vishram Arjun v. Shankariah (AIR 1957 AP 784)). Substitution of a new contract is the core of novation. Its essential feature is that a right under the original contract is relinquished and new rights referable to the new contract are created. The substituted contract, therefore, must be a valid and enforceable contract to be effective as novation. A new and independent agreement concerning the same matter as the previous agreement may be construed to discharge the former, only if the terms of the latter are so inconsistent with those of the former that they cannot stand together. (Vishram Arjun (Supra); Kshetranath v. Harsukdas Balakissendas (AIR 1927 Cal 538 (1)); Gilbert v. Hall ((1831) 1 LJ Ch 15 (H)). It is open to the parties to a contract to supersede a contract by another contract. (Vishram Arjun (Supra); Kshetranath v. Harsukdas Balakissendas (AIR 1927 Cal 538 (1)); Gilbert v. Hall ((1831) 1 LJ Ch 15 (H)). It is open to the parties to a contract to supersede a contract by another contract. But in order to do so, all the parties to the first contract must be parties to the second contract. (P. Ramaswami v. Chandra Kottayya (AIR 1925 Madras 261)). A contract can be altered only by mutual consent of the parties, and not unilaterally. (DWC Ltd. v. State of Tamil Nadu (AIR 2005 MADRAS 264)). The parties have to agree to substitute the original contract with a new contract. (Citi Bank N.A. v. Standard Chartered Bank ( AIR 2003 SC 4630 )). The letter dated 11.02.2009 does refer to a development agreement having been entered into between the 1st and the 4th respondents on 22.03.2008. There is, however, considerable force in the submission of Sri S. Ramachandra Rao, Learned Senior Counsel, that the said development agreement is a secret document, the contents of which have not been made available to the petitioner. While existence of such an agreement is, no doubt, acknowledged by the 4th respondent, neither they nor the 1st respondent have placed a copy of the said development agreement, dated 22.03.2008, for the perusal of this Court, nor has it been made aware of its contents. Since the petitioner was, admittedly, not a party to the said agreement, and, in the absence of any material on record to show that they were aware of, let alone being a party to, such an agreement, it cannot be said that, under the 1st construction contract, the 4th respondent was substituted in the place of the respondent. It is, indeed, curious that the 1st respondent should request the petitioner to accept payment of Rs.25.00 crores, paid by the 4th respondent through three pay orders, and, while retaining Rs.6.00 Crores, refund Rs.9,93,02,818/-to them, and Rs.9,06,97,182/-to the 4th respondent, when they could well have merely paid Rs.6.00 crores to the petitioner. The petitioner’s submission that the 1st and 4th respondents had played fraud on the Bank of India, borrowed Rs.25.00 crores, and misappropriated public money of Rs.19.00 crores, are grave and serious allegations which may well necessitate an enquiry by the authorities concerned, but is a matter extraneous to the present proceedings seeking winding up of the 1st respondent. The petitioner’s submission that the 1st and 4th respondents had played fraud on the Bank of India, borrowed Rs.25.00 crores, and misappropriated public money of Rs.19.00 crores, are grave and serious allegations which may well necessitate an enquiry by the authorities concerned, but is a matter extraneous to the present proceedings seeking winding up of the 1st respondent. Suffice it to hold that neither does the letter dated 03.03.2008, addressed by the 1st respondent to the petitioner, state that payment of Rs.6.00 crores was in full and final settlement of their claims nor that the contract between them and the petitioner had come to an end. The said letter neither expressly, nor by necessary implication, indicates that Rs.9,93,02,818/-paid to the 1st respondent, by the petitioner, was towards reimbursement of their entire investment in the construction. The contention that the petitioner ought to have ascertained, whether permission had been obtained from the GHMC, before undertaking construction, and they cannot claim payment for the construction made without proper municipal permission, needs only to be noted to be rejected. It is not in dispute that permission was sought from the GHMC by the 1st respondent, and it is at their request that the GHMC had accorded permission. Having failed to obtain permission for construction of 11 floors, the 1st respondent cannot now blame the petitioner, or plead that non-payment of the sums due was because the petitioner had constructed the building without necessary permission. The assertion of the 4th respondent that they had made payment of Rs.25.00 crores, under the instructions of the 1st respondent, is borne out by the letter of the 1st respondent dated 03.03.2008. However their contention that, upon reconciliation of the accounts, the 1st respondent realized that certain excess payments had been made to the petitioner and had, therefore, sought refund is not borne out either from the said letter or any other material on record. The next question which arises for consideration is whether the defence of the respondent is bonafide. Whether the debt disputed, by the respondent-company, is bona fide and is to be treated as a substantial defence, are questions which will have to be decided on the facts and circumstances of each case. The next question which arises for consideration is whether the defence of the respondent is bonafide. Whether the debt disputed, by the respondent-company, is bona fide and is to be treated as a substantial defence, are questions which will have to be decided on the facts and circumstances of each case. When the respondent-company comes forward and sets forth its defence, the Court has to examine the nature of the respective cases pleaded by the parties and, if a prima facie case is made out by the petitioner, the respondent should shoulder the onus to disprove it by showing that its defence is in good faith, one of substance, and is likely to succeed in point of law. A plea which is frivolous cannot be termed as raising a bona fide dispute. (Bharat Overseas Bank Limited (Supra)). By non-payment of the undisputed debt, within the period of statutory demand, the company is deemed unable to pay its debts. (Dena Bank v. Khatau Dyes and Fibres Limited ((1995) 83 Comp.Cas.632 (Bom))). When a company fails to comply with a notice under section 434(1)(a) for payment of a debt, the court has no discretion but to make an order. The sub-clause does not merely lay down a presumption of inability to pay, but the word "shall" is of great significance in that the creditor is entitled to an order ex debito justitiae, and a creditor is not required to establish that the company is commercially insolvent. (S. Kantilal And Co. Pvt. Ltd v. Rajaram Bandekar (Sirigao) Mines Pvt. Ltd ((1973 (76) Comp.Cas.800 (Bom));In re Federal Chemical Works Ltd. ([1964] 34 Comp Cas 963)). Exercise of discretion would arise only after the Court comes to a prima facie conclusion that the defence raised by the Company in respect of the debt, which is the subject matter of a petition, is not bonafide and/not acceptable. (S.M. Patel Iron Traders Pvt. Limited v. Sugam Construction Pvt. Ltd ((2011) 162 Comp Cas 298 (Guj))).The Court can go behind the disputes and the agreement to determine whether the disputes sought to be raised are bonafide or not. (Goetze India Ltd.(Supra)). No hard and fast rule can be laid down in inquiring into the question of a bonafide dispute with regard to any debt. Whether there is a bona fide dispute or not will necessarily depend on the facts and circumstances of each particular case. (Goetze India Ltd.(Supra)). No hard and fast rule can be laid down in inquiring into the question of a bonafide dispute with regard to any debt. Whether there is a bona fide dispute or not will necessarily depend on the facts and circumstances of each particular case. (P.G. Bhatia & Co. v. Softsule Private Ltd ((1977) 47 Comp Cas 438)).The controversy must be bonafide in both the subjective and objective sense. This means that it must be honestly believed to exist and must be based on substantial or reasonable grounds. “Substantial” means having substance, and not frivolous or vexatious and which the court should ignore. There must be so much doubt and question about the liability to pay the debt that the Court sees that there is a question to be decided. The onus is on the company to bring forward a prima facie case which satisfies the court that there is something which ought to be tried either before the court itself or in an action or by some other proceedings. (Tata Iron and Steel Co. v. Micro Forge (India) Ltd ((2001) Vol. 104 Comp Cas 533 (Guj))). Bona fide dispute implies substantial grounds for the dispute raised. (Indian Overseas Bank v. M/s. Sanghi Polyesters Limited (Judgment of A.P. High Court in C.P. No.24 of 2008 dated 26.04.2010)).Where there is no doubt that the company owes the creditor a debt entitling him to a winding up order, but the exact amount of the debt is disputed, the court will make a winding up order without requiring the creditor to quantify the debt precisely. (In Re. Tweeds Garages Ltd. ((1962) 32 Comp Cas 795 (Chd.))). If the debt is not disputed on some substantial ground, the Court may decide it on the petition, and make the order. (Mediquip Systems (P) Ltd. (Supra)).The Court is entitled to investigate the question as to whether a dispute has been manufactured in order to delay and defeat realisation of the dues of the petitioning creditor, and is merely a cloak for the inability of the company to pay its just debts. (S.M. Patel Iron Traders P. Ltd. (Supra)).If a debt is undisputedly owing, then it has to be paid. If the company refuses to pay on no genuine and substantial grounds, it should not be able to avoid the statutory demand. (IBA Health (India) Private Limited (Supra)). (S.M. Patel Iron Traders P. Ltd. (Supra)).If a debt is undisputedly owing, then it has to be paid. If the company refuses to pay on no genuine and substantial grounds, it should not be able to avoid the statutory demand. (IBA Health (India) Private Limited (Supra)). In paying amounts periodically to the petitioner, the 4th respondent had merely acted at the 1st respondent’s behest. The proceedings instituted by the petitioner against the 4th respondent, under Section 138 of the Negotiable Instruments Act, was because the dishonoured cheque of Rs.3.5 crores was issued by them. That does not detract from the petitioner’s contention that it is the 1st respondent which was liable, under the construction contract, to pay their debt, and the dishonoured cheque issued by the 4th respondent was at the 1st respondent’s behest. The dispute sought to be raised by the 1st respondent, that the construction contract between them and the petitioner had come to an end, and the 4th respondent was substituted as an “employer” in their place, is merely a moonshine, and is not bonafide. The petitioner had issued the statutory notice, under Section 434(1)(a) of the Companies Act, dated 27.10.2010 calling upon the 1st respondent to make payment of Rs.10,77,00,630/-with interest at 18% per annum within three weeks, and furnished, in detail, particulars of the RA bills and RD bills in this regard. Even in their reply notice, the 1st respondent did not deny the debt due to the petitioner, either because of poor construction or otherwise, and merely contended that they were not liable to pay any amount since their entire entitlement till that date had been reimbursed by the petitioner vide their letter dated 03.03.2008; and there was no correspondence, between them and the petitioner, thereafter. Even though notices were sent to them, the 4th respondent chose not to reply to the said notice. In their counter-affidavit filed before this Court also, the 4th respondent does not dispute the petitioner’s claim of being due a sum of Rs.10,77,00,630/-. All that they contend is that there is no privity of contract between them and the petitioner, as the contract between the petitioner and the 1st respondent continued to subsist. If the debt is bonafide disputed, there cannot be "neglect to pay" within the meaning of Section 434(1)(a) of the Companies Act. All that they contend is that there is no privity of contract between them and the petitioner, as the contract between the petitioner and the 1st respondent continued to subsist. If the debt is bonafide disputed, there cannot be "neglect to pay" within the meaning of Section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the winding up on the ground that the company is unable to pay its debts is not substantiated. Thirdly, a debt about the liability to pay which, at the time of the service of the insolvency notice, there is a bona fide dispute, is not 'due' within the meaning of Section 434(1)(a), and non-payment of the amount of such a bonafide disputed debt cannot be termed as "neglect to pay" the same so as to incur the liability under Section 433(e) read with Section 434(1)(a) of the Companies Act. (Mediquip Systems (P) Ltd (Supra);IBA Health (India) Private Limited6;P.G. Bhatia & Co. (Supra)). The expression “neglected to pay the sum demanded” in Section 434 (1) is not equivalent to the word “omission”. Neglected to pay the debt on demand is omission to pay without reasonable cause (International Inc. v. Nitul Data Systems P. Ltd. ((1997) 88 Com.Cas.234 (Del.))). Where there is refusal to pay without any reasonable excuse it must be held that the company has neglected to pay the amount due within the meaning of Section 434(1)(a) of the Act. As the debt due to the petitioner, of Rs.10,77,00,630/-, is required to be paid by the 1st respondent, and as the construction contract continues to remain in force, failure of the 1st respondent to make payment of the amount claimed to be due by the petitioner, within three weeks after receipt of the statutory notice under Section 434 (1) (a) of the Act, reflects their neglect to pay the debt due to the petitioner. A civil suit for recovery of money cannot be equated to a winding up proceeding under Section 433(e) of the Companies Act. It is not the case of any of the respondents, in this company petition, that the debt (exceeding Rs.10 crores), claimed to be outstanding, is not due and payable to the petitioner. All of them only contend that they are not liable, and it is the other respondents against whom the petitioner should address their grievance. It is not the case of any of the respondents, in this company petition, that the debt (exceeding Rs.10 crores), claimed to be outstanding, is not due and payable to the petitioner. All of them only contend that they are not liable, and it is the other respondents against whom the petitioner should address their grievance. In such circumstances, the mere fact that the petitioner had filed a suit, for recovery of the money due to them, against all the respondents would have little bearing on the petition filed before this Court, seeking winding up of the 1st respondent, as it is evident from the correspondence referred to hereinabove that the construction contract between the petitioner and the 1st respondent continues to remain in force. While a civil suit is filed for recovery of money, a company petition is filed for winding up on the ground that the respondent company is unable to pay its debts. Proceedings for winding up are not proceedings for recovery of any amount. (Tirlok Chand Jain v. Swastika Strips (P) Ltd ((1991) 70 Comp Cas 196 (P&H)); William Jacks & Company (India) Limited v. Saraswati Industrial Syndicate Limited ((1986) 59 Comp Cas 876 (P&H));Salig Ram v. New Suraj Financiers & Chit Fund Company (Judgment of P&H High Court in C.A.No.8 of 1979 in C.P.No.147 of 1978 dt.18.7.1979)).It is not an invariable rule of law that where a suit, for the recovery of a debt on the same cause of action, is pending in a civil court, a petition for winding up does not lie. (Fibex Inc. v. A.B.K. Publications Ltd. ((1999) 97 Company Cases 947 (A.P))).Mere pendency of a suit by itself cannot be put up as a defence for winding up. (Goetze India Ltd. (Supra)). It is evident that the Legislature contemplated the simultaneous existence and continuance of a winding-up petition as well as a suit for the recovery of money on the same cause of action. There is no provision in the Companies Act which mandates that, on the filing a suit for recovery of moneys due, the winding up petition must be dismissed. (Madhya Pradesh Iron & Steel v. G.B. Springs (P) Ltd ((2003) 117 Comp Cas 327)). A suit for recovery of money is essentially a suit between the parties where no third party can seek any indulgence or impleadment. (Madhya Pradesh Iron & Steel v. G.B. Springs (P) Ltd ((2003) 117 Comp Cas 327)). A suit for recovery of money is essentially a suit between the parties where no third party can seek any indulgence or impleadment. In winding up proceedings, the lis is not merely between the petitioning party and the company sought to be wound up. Once the petition is admitted the creditors, contributories, shareholders, etc., seek redress in the proceedings, and even oppose the winding up. Sometimes the relief for winding up is denied when it is against public interest. (Coromandel International Ltd. v. Chemcel Biotech Ltd ((2011) 4 Comp. Law. J 279 (AP))). Section 433 of the Companies Act is not intended to supplant the jurisdiction of a Civil Court to adjudicate a money suit. (Viral Filaments Ltd. v. Indusind Bank Limited (2003 (113) CC 85 (Bombay HC))). Though respondents 1 to 4 are made parties to the petition, the petitioner has sought winding up of the 1st respondent only. It is evident that the 2nd respondent has been arrayed as a party to these proceedings as they had earlier issued an LOI, and it is for their benefit that the construction was undertaken by the petitioner. Respondents 3 and 4 are arrayed not only because a cheque for Rs.3.5 Crores was issued by them (which was dishonoured), but also because the letter dated 11.02.2009 refers to an agreement between the 1st and the 4th respondent. There is, therefore, no merit in the submission that the company petition should be dismissed for misjoinder of parties. Prima facie, the petitioner is a creditor to whom the 1st respondent owes a substantially ascertained sum of money; the said debt is within limitation; and the defence of the 1st respondent is not bona fide and is a moon shine. As the 1st respondent has neglected to pay the debt, despite a statutory notice having been issued by the petitioner, the legal fiction, under Section 434(1)(a) of the Companies Act, comes into operation, and it must, therefore, be deemed that the 1st respondent is, prima facie, unable to pay its debts unless they discharge the onus on them to show that they are commercially solvent, and are able to pay their debts. Let alone placing copies of their Balance Sheets before this Court, the 1st respondent has not even chosen to state, in their counter-affidavit, that they are in a position to pay their debts, and are commercially solvent. The Company Petition must therefore be and is, accordingly, admitted. As required under Rule 24 read with Rule 99 of the Companies Court Rules, 1959, admission of the company petition is required to be advertised in two daily news papers. The petition shall be advertised in Business Standard (English Daily) and Andhra Prabha (Telugu Daily), Hyderabad editions on or before 02.11.2012.