9911796707
TMI Blog1999 (2) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... eral years against its quantity allotted by the Registrar of Newsprints of India under News Print Control Order. The payments for such supplies which were made either by rail or road transport as per the orders of the respondent were made against the invoices accompanied by despatch documents presented through the banks or direct for payment on due dates as agreed between the parties. Between the period 19-10-1992 to 11-6-1993, the total amount which fell due against the supplies made to the respondent-company was to the tune of Rs. 2,43,58,920. The respondent though assuring that they would be making the payments had defaulted in paying the same. Therefore, ultimately the petitioner had to stop the supplies. Request was being made repeatedly to the respondent to make the payments and for the said purpose registered letters, telex and fax messages were sent to the respondent, personal approaches were also made but as the payment was not received a registered notice of demand was served on 16-5-1994 on the said respondent. Vide their reply dated 9-6-1994 sent through their advocate, the respondent-company for the first time and as an after- thought stated therein that the newsprint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-company. Further there was no agreement to give any discount much less 40 or 50 per cent discount as claimed by the respondent-company at any time by the petitioner. The entire story according to them has been cooked up after the receipt of the notice from the petitioner-company asking for payment. It was further stated that the statement of account as filed as Annexure-CA-1 to the counter affidavit had been got up and prepared only for the purpose of misleading the Court and to make it appear that the question involved raises disputed facts regarding accounts. The defence was not bona fide and was raised for the purpose of setting-up a defence to this petition. 5. This Court has initially heard the learned counsel for the parties on the question whether this petition should be admitted and advertised under rule 24 of the Companies (Court) Rules. After hearing the parties at length, this Court vide order dated 6-8-1996, was prima facie of the view that the defence which is being sought to be raised by the respondent appeared to be an afterthought as they had already admitted vide the statement of account submitted to the petitioner on 18-9-1993 that the amount whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-1992 to 11-6-1993. The respondent-company in para 11 of the company petition has mentioned the bill numbers with reference to the date and the amount of the bill. The total amount of the aforesaid bills is Rs. 2,43,58,920. The receipt of the newsprint supplied to the appellant company against the aforesaid bills is not disputed. The only dispute is about the price. It is true that the winding-up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed but the dispute must be of the level and category mentioned in the judgment of Hon'ble Supreme Court in the case of Madhusudan Gordhandas. However, we have no hesitation in saying that appellant company has not been able to adduce evidence of such standard as mentioned in the above judgement of Hon'ble Supreme Court at this stage. This appeal is against the order admitting winding-up petition and, in our opinion, at this stage conclusive and elaborate findings could not be recorded as the findings and observations of the learned Single Judge are only for prima facie satisfaction arrived at for purposes of admission only and nothing more. We are not expressing our opinion on the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and Sri S.M.A. Kazmi, learned counsel for the respondent-company. I have also perused the record of this case including the affidavits, which were sought to be filed subsequently before the hearing of this petition. 9. The learned counsel for the petitioner has placed before me the relevant paragraphs of the petition, counter, rejoinder supplementary affidavits and the annexure thereto. He has contended that though the goods worth Rs. 2,43,58,920 were due against the respondent-company and the said respondent had admitted in its statement of account dated 18-9-1993 that the outstanding as on 31-8-1993 stood at Rs. 2,28,64,054. This amount despite repeated requests, registered letters, telex, telegrams, fax messag- es and personal contacts the respondent-company had failed to pay and had not denied its liability to make the payment. However, for the first time after the receipt of the legal notice dated 16-5-1994 sent by the petitioner that the respondent has taken a false plea that the goods sent to it were waste paper, consequently, the respondent is entitled to 40 per cent discount. It was contended by the learned counsel for the petitioner that the said defence was an aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Woollen India (P.) Ltd. AIR 1971 SC 2600 and it was held that if the debt is bona fide disputed and the defence is a substantial one, the Court will not order winding-up. The principle on which the Court acts is ( i )that the defence of the company is in good faith and one of substance; ( ii )that the defence is likely to succeed in a point of law and; ( iii )the company adduces prima facie proof of the facts on which the defence depends. 12. It is also well established that where a debt is disputed it is the duty of the Court to go into the question whether the dispute raised was genuine and bona fide or the same was just a 'moon-shine' and had been raised only for the sake of raising a dispute to give it a look involving disputed questions. It has been held that the expression 'bona fide' in common English parlance means 'genuine or good faith' and bona fide dispute has been held to mean a dispute based on substantial grounds. To fall within the general principle, the dispute must be bona fide in both the subjective and objective sense. Thus, it must be honestly believed to exist and must be based on substantial or reasonable ground. 'Substantial' means ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. That apart, the petitioner has in its rejoinder affidavit filed copies of the correspondence between the parties for the purpose of showing that the petitioner was repeatedly writing registered letters, sending tele- grams, telex and fax messages to the respondent disclosing the amount which remains in balance and which the respondent has not paid and the respondent has not disputed the receipts of the said letters. For the purpose of testing whether the defence is bona fide, a brief reference to some of those letters may be necessary. The petitioner along with the rejoinder affidavit has enclosed a copy of the letter dated 12-3-1992 as Annexure RA-8 calling upon the respondents to settle its long standing overdue of Rs. 2.15 crores and odd. Again vide letter dated 19-5-1993 (Annexure RA-9), the petitioner called upon the respondent to pay the outstanding of Rs. 2.25 crores and odd on the newsprint supplied till March 1993. In the said letter, it also recorded an assurance of the respondent to pay the overdue balance by June 1993. Vide letter dated 10-8-1993 (Annexure RA-10), the petitioner again demanded payment of the outstanding of Rs. 2.57 crores. It also recorded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised any claim with regards to the 40 per cent discount. On the other hand there are certain letters from the respondent in which it had agreed and promised to pay-off its old outstanding. Some of these letters needs to be noticed at this stage. Vide letter dated 5-1-1993, the respondent writes to the petitioner regarding the outcome of the discussions whereby it agreed to pay Rs. 1 lakh towards the old outstanding and praying for supply to be resumed with immediate effect. A copy of the said letter has been annexed as Annexure-30 to the rejoinder affidavit. In this very letter the respondent also assures to pay Rs. 15,000 per truck towards outstanding and further assures that the documents would be honoured within ten days. Then again vide letter dated 30-8-1993, copy of which has been annexed as Annexure-31 to the rejoinder affidavit, the respondent promised to pay Rs. 15 lakhs extra on each rake of the newsprint supplied by the petitioner and requests for future supplies. Then on 18-9-1993, the respondent sends a statement of account acknowledging that as on 30-8-1993 the amount outstanding to the petitioner was Rs. 2.28 crores. The petitioner has annexed a copy of the said s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, there was no reason why the respondent would be writing that it would pay the old outstanding. In the counter affidavit, the respondent has taken a stand that after giving adjustment to the amount claimed as discount the balance which will be payable by the respondent to the petitioner will be to the extent of about Rs. 3 lakhs and odd. In support of the same, the respondent is relying upon a statement of account filed by it along with the counter affidavit. If the said statement was correct and after giving discount of 40 per cent, only a sum of Rs. 3 lakhs and odd would be payable to the petitioner then the respondent would not have written in the letter dated 6-4-1993 that on supply of 50 wagons of news print, Rs. 50 lakhs will be paid and six old documents would be retired. Rs. 20 lakhs against the old outstanding and full payment of the rake will be made within 50 days and this process of payment will continue till the dues are liquidated. The respondent has not disputed that this letter was sent by it to the petitioner. It has also not disputed the other letters mentioned above in which the respondent was assuring that it would pay-off the old outstanding in instalment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. Along with the supplementary affidavit, the respondent has annexed as Annexure-3, a letter dated 25-3-1992 sent by the said respondent to the petitioner. In the said letter some reference has been made regarding the supply of rejected and damaged newsprint. A reference has also been made of an inspection in the go downs of the respondent. The petitioner has stated that this letter has also been manufactured subsequently for the purpose of the present case. Assuming that any such letter was sent, a reference has been made of inspection in the letter of 25-3-1992 whereas according to the case of the respondent the inspection had taken place on 14-6-1992 by Shri Thakurta. It is not the case of the respondent that two inspections were made, one in the month of March and the other in the month of June. In case the inspection note was genuine, the reference of the same could not have been made in the letter dated 25-3-1992. Taking these facts into consideration and also the fact that neither the inspection note or this letter of 25-3-1992 which the respondent is filing at this stage of the proceeding was disclosed at the first opportunity in support of the petitioner's case regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately classified to the schedule of Central Excise Tariff Act, 1985 under the heading 4801 and sub-headings 4801.90 and 4801.10. As already stated above the rate of reject or non-standard reels of newsprint is much less. It was for those reasons that the respondent was placing orders for non-standard and rejects grades. The petitioner had in the invoices that were raised charged less price for the reject newsprint. Consequently, there was no question of granting any discount for the supplies of reject newsprint. In case there was any agreement to give any discount the respondent would have pointed out the same instead of keeping quiet and making promises to make payment and to clear-off the dues in instalments. It will be noticed that the petitioner gave a legal notice on 16-5-1994 for payment of Rs. 2.43 crores. It is only in the reply dated 9-6-1994 given by the respondent's lawyer that it was alleged that waste paper was supplied to the respondent and an assurance was given for the discount of 40 to 50 per cent which was not reflected in the statement of account given by the petitioner. In the supplementary affidavit filed by the respondent in August 1997, the respondent-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period 1991-92 and 1992-93. Lok Prakashan has lodged a claim for payment of compensation amounting to Rs. 70 lakhs. Despite the fact that the Senior Personnel of the petitioner had certified that the quality of newsprint supplied was quite good, hence no question of compensation arises, yet, due to collusion with the senior executives of Lok Prakashan an agreement had been arrived at to pay the compensation of Rs. 50 lakhs. On the basis of the said letter Shri Kazmi has contended that the petitioner had been giving discount for inferior quality of paper and, consequently, it cannot be said that the claim of discount was a figment of imagination. I am however not impressed with this submission for the reason that if this letter is read as a whole, it will be evident that Sandesh were merely pointing out that on flimsy pretext due to corrupt collusion, compensation was being granted to Lok Prakashan and public money was being misused in this jnanner and, if such compen-sation can be given to Lok Prakashan then the other customers may also be considered. From this letter it cannot be inferred that any waste or inferior quality of material was supplied to the respondent-company. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all its shareholders, creditors or contributories. Therefore, merely because a creditor has filed a suit against the company, the winding-up proceeding cannot be stayed. Similar view has been taken by the Delhi High Court in the case of Karam Chand Thappar v. Acme Paper Ltd. AIR 1994 Delhi 1, the Calcutta High Court in the case of All India General Transport Corpn. Ltd. v. Raj Kumar Mittal [1978] 48 Comp. Cas. 604 and the Punjab High Court in the case of Lakshmi Sugar Mills Co. (P.) Ltd. v. National Industrial Corpn. Ltd. [1968] 38 Comp. Cas. 384. Respectfully agreeing with the said decisions, I do not find any force in the said submission made by the learned counsel for the respondent. 20. It was lastly urged that the respondent-company has in pursuance of the order passed by the Division Bench deposited an amount of Rs. 75 lakhs. This would be evidenced to show that the respondent-company was neither insolvent nor has it lost its substratum. On the contrary, the respondent was publishing a newspaper which had wide circulation and was directly or indirectly employing large number of officers, workmen and staff. Consequently also this petition for winding-up of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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