2002 (9) TMI 558 - HC - Companies Law

Summary

Issues:
1. Dispute over outstanding payment for delivered goods.
2. Defence against winding-up petition based on alleged defective goods.
3. Legal analysis of the defence presented by the respondent.

Issue 1: Dispute over outstanding payment for delivered goods

The respondent company placed three purchase orders for Tube Oil Bottles and Plat Butt Assemblies. Despite part payments, a balance of Rs. 4,16,261 remained unpaid. The company forwarded Central Sales Tax Declaration Forms but failed to clear the outstanding amount. Both parties exchanged statements of accounts, with the petitioner claiming Rs. 4,16,261 due. The company admitted a debt of Rs. 3,79,757, supported by 'C' Forms for all transactions. The court emphasized the importance of an admission of debt in such cases.

Issue 2: Defence against winding-up petition based on alleged defective goods

The respondent's defence to the winding-up petition involved claiming that 5,500 Plate Butt Assemblies delivered were defective. The company used these in rifle manufacture, leading to complaints and a subsequent request for rectification or approval. The petitioner provided evidence of clearance of the disputed items and subsequent requests for further supplies, indicating acknowledgment of debt. The court noted that the defence seemed to be raised only in response to the winding-up petition, casting doubt on its credibility.

Issue 3: Legal analysis of the defence presented by the respondent

The court analyzed the defence in light of the Sale of Goods Act, emphasizing concurrent conditions of delivery and payment. Despite the respondent's claims of defects, the court found the defence legally untenable and potentially false. The court ordered the respondent to deposit the outstanding sum of Rs. 4,16,261 within a specified timeframe. Failure to comply would lead to publication of the citation for further action, potentially including the appointment of a provisional liquidator due to the company's admitted financial difficulties.

In conclusion, the judgment addressed the issues of outstanding payment disputes, defence against winding-up based on alleged defects, and the legal analysis of the defence presented. The court found the defence lacking credibility and ordered the respondent to deposit the outstanding amount, highlighting the importance of clear admissions of debt and legal obligations in commercial transactions.