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1998 (10) TMI 394

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..... er, the respondent-company is still indebted to it to the tune of Rs. 49,07,785.85. 2. The respondent challenged the claim of the petitioner on legal grounds as well as on merits. Legal objections relate to the maintainability of this petition. It is the defence of the respondent that since the petition is based on running account, therefore, not maintainable. Secondly the affidavit filed in support of winding petition is not in accordance with rule 21 of the Companies (Court) Rules, 1959 and Form No. 3. Finally, supply made by the petitioner was irregular and defective, therefore, there exist serious commercial dispute. This Court under the Companies Act, 1956 ( the Act ) cannot adjudicate the dispute. On merits it has been contended that the supply of materials was irregular with the result the respondent-company suffered losses. The question of supply of defective material and irregular supply was brought to the notice of the petitioner immediately after the supply was made in September 1996. That the company is entitled to a counterclaim. The petitioner is not entitled to any amount. 3. After hearing the counsel for the parties, I have taken up the second legal objectio .....

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..... e affidavit is not enough to conclude that the affidavit has to be signed and verified by a duly authorised person nor it can be said to be in accordance with Form No. 3. Mr. Chawla has deposed in the affidavit that he was well acquainted with the facts and circumstances of the case. Reading of para 2 of the affidavit shows that he has not disclosed which of the paragraphs are based on information derived by him and which were of his personal knowledge. On the contrary reading of para No. 2 of the affidavit shows Mr. Chawla verified the facts of the petition on his personal knowledge: "Para 2. That I, have read the accompanying petition, and that the facts stated therein are correct and true to my knowledge." 4. Reading of the petition as a whole show that all the paragraphs could not be based on his personal knowledge. Some paras deal legal submis-sions, those could not be based on personal knowledge. Similarly, the capital and status of the respondent-company has to be based on know-ledge and information derived. For some of the paras of the petition he must have derived the information from official record, therefore, could not have been verified on the basis of his knowle .....

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..... oday. 5. Turning to the question as to whether the petition can be rejected on the ground that it is based on running account? The counsel for the company placed heavy reliance on the facts stated in the suit filed by the petitioner before the Civil Judge, Howrah, listed as Money Suit No. 16 of 1997. In para 7 of the said suit it has been pleaded as under: "7. Parties have always treated the account as one open, current continuous and running." Much stress has been laid on the contents of paras 7,17 and 18 of the plaint where the present petitioner averred that the account was current, continuous and running one. Reliance was also placed on para No. 18 dealing with cause of action. The petitioner in para No. 18 has alleged that cause of action against the present respondent accrued from 10-4-1994 to 31-8-1996 and further as and when the goods related to the invoices were received by the defendant. Relying on these averments. Mr. Sanjiv Puri contended that the cumulative effect of the reading of these three paragraphs, namely, 7, 17 and 18 show that this petitioner had based its claim on running account. Therefore, this petitioner cannot now turn around and say that its clai .....

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..... -4-1995. Vide letter dated 15-5-1995, outstand-ing amount as on 15-5-1995 was also indicated to the company. In these statements the payments which were received against various invoices were adjusted leaving the balance amount due. These letters along with the payment outstanding have been placed on record along with rejoinder to show that the claim was not based on running account but due to non-payment of the amount against individual invoices, raised on the respon-dent-company. It was also urged that merely because in para 7 of the suit it had been mentioned that parties treated the account as open, current continuous and running will not change the basis of the suit which had been filed on the basis of non-payment of the amount against the purchase orders. Attention of this Court was also drawn to para 5 of the plaint where it had been mentioned that plaintiff was claiming amount of the goods sold and delivered against 21 invoices and 2 supplementary invoices. He further contended that reading of the plaint as a whole show that plaintiff s case was based on the invoices and purchase orders. That the use of the words open, current and running account pertained to the non-paym .....

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..... aterial or defective material was lodged by the respondent earlier. On the contrary as already pointed out above vide letter dated 31-7-1996 further order indicating its requirement for the month of August was placed on 31-7-1996. Therefore, the argument of Mr. Sanjiv Puri that the payment was not made on account of delay in supply of material appears to be afterthought and not bona fide. It is not born out from the record nor has been supported from any letter written prior to the demand raised by the petitioner. Moreover, the letter of November, 1996 issued by the company does not indicate that the respondent lodged complaint for irregular supply and/or defective sup- ply earlier. Moreover, the company neither filed a counterclaim nor instituted a separate suit against this petitioner claiming losses. In its letter dated 23-4-1997 company had taken the plea that due to delay in delivery there was production loss for which debit note would be issued against the petitioner. But according to the petitioner till date no debt note has been issued. The petitioner sent reply to the letter of the company denying any delay on its part. In one of its letters the petitioner suggested th .....

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..... ourt in the case of Chhabra Steel Strips (P.) Ltd. v. Haspa Wheels (P.) Ltd. [1996] 86 Comp. Cas. 703 held that in the absence of any evidence indicating that the quality of goods was ever objected to at any point and in the absence of any evidence suggesting that the company ever made a complaint to the petitioner regarding quality of goods supplied, the company had to be held unable to pay its debts and the provisions of section 433 gets attracted. Similar view was taken in the case of Joti Prasad Bala Prasad v. A.C.T Developers (P.) Ltd. [1990] 68 Comp. Cas. 601 (Delhi) wherein it was observed that even with regard to the question of delay if the company took delivery of the consignments without any demur and the consign- ment was accepted then the company could not raise such a defence that there was delay in supply of material or it was defective. This observation squarely apply to the facts of this case. The company failing to pay the price of goods and disputing the quality, delay and the rate at which material was supplied appears to be not bona fide defence as such a plea was never raised earlier nor any counterclaim having been filed the defence appears to be .....

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