2017 (7) TMI 879 - HC - Companies Law

Winding-up petition - failure to pay debts Service of Notice - Installation and commissioning charges - The petitioner had sent various reminders/requisitions to clear the outstanding but to no avail and despite promises by the respondent no payment was made and hence a statutory notice dated 28.03.2015 was sent to the respondent company both at its registered office address and its corporate office address. The notice sent at the registered address returned with remark left without address; however on 29.03.2015 the statutory notice sent to the corporate office was duly served - Held that - this e-mail was sent a year after the installation and still it only raises an apprehension that the plastic mesh may break. Such an apprehension was even removed by the petitioner as is evident from its e-mail dated 05.03.2014 (Annexure P) wherein the petitioner talks about visiting the Haridwar plant of the respondent on 14.02.2014 and of changing the issue pellet with steel deck pellet and further request for clearing its dues. Even then nothing was paid. The petitioner went on sending requests to the respondent through e-mails but the respondent did not answer. Where the goods were installed and commissioned to the satisfaction of the respondent on 21.01.2013 and on 21.03.2013 and where the respondent admitted its liability on 9.12.2013 (Annexure N) but raised only an apprehension after a year of installation which was also attended to though beyond the scope of the contract and where the respondent rather appreciated the work of the petitioner then its plea per Section 41 that it could not inspect the goods within a reasonable period of its installation makes no sense. The facts reveal the respondent is raising this frivolous issue after a year of receiving demand letters and is trying to wriggle out of its liability & thus have neglected to pay without any cogent substantial or genuine ground. Petition allowed - decided in favor of petitioner.

Summary

Issues:
- Dispute over outstanding payment for goods supplied by the petitioner to the respondent.
- Respondent's claim of defective goods as a defense.
- Interpretation of Sale of Goods Act provisions regarding acceptance of goods.
- Application of legal precedent in similar cases.
- Petitioner's plea for payment and respondent's delay in settling the outstanding amount.

Analysis:
1. The petitioner, a private limited company, supplied goods to the respondent as per purchase orders in 2012. Despite part payment received, a significant balance remained unpaid. Various correspondences and reminders were sent to the respondent to clear the dues, leading to a statutory notice being issued in 2015 due to non-payment.

2. Respondent's defense centered around claiming the goods supplied were defective and not meeting the required standards, as mentioned in their reply to the petition.

3. The court analyzed the purchase order terms, installation reports, and correspondence between the parties. The respondent's acknowledgment of the outstanding balance in an email, along with positive feedback on the goods supplied, indicated satisfaction with the products delivered.

4. An email from the respondent raising concerns about the goods a year after installation was addressed promptly by the petitioner, showcasing willingness to resolve any issues. Despite efforts to communicate and resolve the matter, the respondent did not make the due payment.

5. The court referred to the Sale of Goods Act, emphasizing the importance of timely inspection and acceptance of goods. Citing legal precedents, it highlighted the significance of prompt action in case of any disputes regarding the quality of goods supplied.

6. Considering the facts presented, the court found the respondent's delay in payment without substantial grounds unacceptable. Quoting a Supreme Court judgment, the court reiterated that undisputed debts must be paid promptly, and the respondent's solvency should not be used as a standalone ground to avoid payment.

7. As a result, the petition was admitted, and the respondent was given an opportunity to settle the outstanding amount with interest. Failure to comply within the specified timeframe would lead to the publication of the citation and potential appointment of a Provisional Liquidator.

8. The judgment highlighted the importance of honoring financial obligations and the legal consequences of unjustified delays in payment, emphasizing the need for prompt resolution of commercial disputes to maintain the integrity of business transactions.