Q: In October 2003, I had sold and supplied 10 desktop computers to a partnership concern in Calcutta. The total price of the computers was about Rs 5 lakh. The concern failed to pay the price or any part thereof. After that I have made several demands to the concern, but in vain. The concern did not even reply to any of my requests and never paid me the money.
In February 2004, I learnt that the business of the partnership has been taken over by a private limited company and the partnership stood dissolved. The shareholders and directors of the private limited company are the same three persons who were partners of the partnership concern.
Accordingly, I raised my demand on the company for the price of the computers. I was hoping that this time round, the company will pay my dues. However, the company denied my claim on the basis that there was no contractual relationship or transaction between the company and myself. In December 2004, I came to know that the company has been ordered to be wound up by an order passed by the Calcutta High Court on the application of another creditor of the company.
I understand that now I cannot file any legal proceeding against the company for recovery of my dues without the leave of the high court. My queries are as follows: Firstly, If I apply for such leave before the high court, is the same likely to be granted? Secondly, is there any other way to recover my dues? Please advise.
Nikhil Basu, Calcutta
A: Even assuming that the private limited company, which is a distinct legal entity, had taken over the liabilities of the partnership, if you now approach the Calcutta High Court praying for leave to file a suit against the company, it is unlikely that such leave will be granted.
You are at best an unsecured creditor of the company and the court is likely to direct you to file your claim with the official liquidator who must have taken possession of the assets and properties of the company pursuant to the winding up order. However, that would be a long-drawn process and at the end of it you may or may not recover your dues depending on the other liabilities of the company. My advice would be to file a money suit in the appropriate civil court against the persons who were partners of the firm to which you had supplied the computers.
The partners of the firm remain individually liable for the debts of a partnership even after its dissolution. You must file such a suit before the lapse of three years from the date of payment became due to you. Otherwise, your claim will become barred by limitation.
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