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TMI Blog1980 (5) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... o be made on presentation of documents on 90 days D/P basis through the Bank of Rajasthan, Fort, Bombay. The said M/s. Patel Holdings drew a bill of exchange on August 12, 1977, for 7,25,000 U.S. dollars on the company, payable to the bank at sight. The said M/s. Patel Holdings negotiated the said bill of exchange with the bank, and handed over to the bank the original bill of lading, the invoice and other documents. The said Patel Holdings, as per the order placed by the company and referred to above, shipped 1,000 metric tonnes of Crude Canadian Rape Seed Oil to Bombay by "S.S. Tofuku Maru". The company was intimated by M/s. Patel Holdings of the despatch of 1,000 metric tonnes of Crude Canadian Rape Seed Oil per ship, named above, and also forwarded copies of the documents with regard thereto. The ship "Tofuku Maru" arrived at Bombay on or about 19th August, 1977. The company received a notice through Bakshi Co., agents of the owners of the said ship, that the goods had arrived and were ready for unloading. The bill of lading was endorsed by the holder thereof in favour of the bank, and the bank was holding the same. The company, after executing the deed of guarantee (indemnit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgement, and further that the authority of Mr. M. P. Jaju had been revoked on September 4, 1978, and the said Mr. Jaju, therefore, had no authority to acknowledge the liability on behalf of the company on December 15, 1978. The learned company judge, after hearing the arguments of the parties, observing that prima facie the petition deserves to be admitted for hearing, admitted the petition for hearing. The order of the company judge has been challenged in this appeal on behalf of the company on the ground that prima facia no cause of action can be said to have arisen against the company in respect of the alleged dues arising out of the bill of exchange dated August 12, 1977, because the same was neither presented for acceptance, nor accepted for payment, that the letter dated December 15, 1978, of Mr. M.P. Jaju does not amount to an acknowledgement of liability, because the defence raised by the company was bona fide and was in good faith and was one of substance, and as such was likely to succeed on the point of law, as there was lack of privity between the company and the bank. The learned counsel for the parties concede for the present purposes that no cause of acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the acknowledgement of Mr. M.P. Jaju dated December 15, 1978, which in itself is sufficient to fasten the liability, being a fresh agreement between the parties, and the rejoinder was only submitted to explain the various circumstances and nothing new was stated therein. He submits that the conduct of the company has been such as should also be taken into consideration while deciding as to whether the application should be admitted for hearing or not, and though the company was not the consignee of the goods and was not holding the bill of lading, yet still it was wrongly mentioned in the indemnity bond that they are the consignees of the goods, and further undertook to produce and deliver to the owners of the ship the bills of lading for the goods duly endorsed, as soon as those documents arrived. The company could only take delivery of the bill of lading after paying 7,25,000 U.S. dollars, the price of 1,000 metric tonnes of crude Canadian oil. Before we take up the rival contentions of the learned counsel, it is necessary to examine the scope of an appeal against an order of admission of winding up of the company by the learned company judge. In Western India Theatres Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any cause of action or not. A statement of law has been given in Buckley on the Companies Acts (12th Edn., at page 473) that the winding up order could be made only secundum allegata et probata. This statement of law was considered by A.N. Ray J., as he then was, in Jagannath Gupta Co. v. Moolchand [1969] 3 9 Comp. Cas. 262 (Cal.) and he observed (p. 274) : "In my opinion, the petition for winding up is to be confined to the grounds set out in the petition and the petitioner, except with the leave of the court, should not be allowed to travel outside the petition." The question, therefore, is, as to whether the petition was based on the alleged liability of the company on the bill of exchange, which did not exist, because the bill of exchange was not accepted for payment, or is also based on any other cause of action. It is also to be seen, as to whether the court granted permission to the bank to take any additional ground in its rejoinder, and, therefore, any additional ground can also be looked into. A look at the petition for winding up, as originally framed, will show that it is mentioned in para. 6 of the petition that the company has already taken delivery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnment of 1,000 metric tonnes crude Canadian oil from the ship, "Tofuku Maru". Prima facie, we do not find any substance that the authority of the said attorney, Mr. Jaju, had been revoked on September 4, 1978, because there is no material on the record for the present, and the learned advocate for the company has not been able to show any to us that the revocation was ever communicated to Mr. Jaju or to Patel Holdings. The law can be said to be settled that if the debt is such as is bona fide disputed by the company, then the petition for winding up should not be admitted. In re B.I. General Insurance Company [1970] 40 Comp. Cas. 554, it has been observed in para. 9, as follows (p. 559) : "Circumstances relating to inability of the company to pay its debts are now well-settled. It is unnecessary to refer to the various cases on this point. It will be enough if reference is made to the decision of the Supreme Court in Amalgamated Commercial Traders Pvt. Ltd. v. Krishna-swami [1965] 35 Comp. Cas. 456 (SC) wherein the Supreme Court has approved of the law laid down in Buckley on the Companies Acts, 13 th edition p. 451. It is there observed : 'It is well-settled that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. On the other hand, if the court comes to the conclusion that the dispute sought to be raised is not bona fide , and is only manufactured or created for the purpose of resisting the application, it is the duty of the court to refuse to grant any relief to the company sought to be wound up and to admit the petition. It is contended by the learned advocate for the company that delivery of the consignment was taken under the indemnity bond, which was furnished by the Rajasthan Bank and not under the bill of lading, and the liability, if any, of the company to the owners of the ship, to whom a sum of Rs. 10,50,000 had already been paid, and the liability, if any, is to the bank, which stood guarantee and the company owes no liability to the bank ( sic ) . It is further contended that as the bank has already finally settled the claim for 1,000 metric tonnes crude Canadian oil, with the owners of the ship, "Tofuku Maru," and has received a substantial amount, which is 6,80,000 U.S. dollars, there no more remains any cause of action even for the balance of the amount against the company. According to the learned advocate, therefore, the payment of debt on which the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 U.S. dollars and interest on which also the petition for winding-up is based does not appear to be bona fide , though it is yet to be finally decided, it appears to have been manufactured by the company, for escaping its liability. We will also observe here that the conduct of the company is such, which cannot be lost sight of. It placed the order with Patel Holdings for 1,000 metric tonnes of crude Canadian oil. Copies of the bill of lading and other documents were sent to it. It was not the consignee or the endorsee of the bill of lading. It could have only taken the delivery after it could have come in possession of the bill of lading, which it could have only done after paying 7,25,000 U.S. dollars. It wrongly mentioned in the indemnity bond that the company is the consignee of the goods. But, for the false representation of the company, that it was the consignee of the goods, and will produce and deliver to the owners of the ship the bill of lading for the goods duly endorsed as soon as it will arrive, the delivery could not have been given to the company. It has only paid a sum of Rs. 10, 50,000 to the ship owners, and not the entire value of 7,25,000 U.S. dollars, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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