9911796707
TMI Blog1998 (9) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-company from 16-8-1996 to 26-8-1996. The amount of Rs. 1.45 crores was agreed to be paid by the respondent-company on or before 15-8-1996. But after negotiations, the petitioner-company had agreed for payment upto 15-9-1996. On 8-10-1996, the respondent-company had paid US $ 1,28,451.86 towards the price of the goods and US $ 2,068.93 towards interest and bank charges. The respondent-company had consumed the newsprint supplied to it weighing 750 mts. The consignments 0094B for 750 mts. and 0094C for 500 mts. had arrived at the Mumbai Port but the petitioner-company had sold the same to other persons. On 21-10-1996, the petitioner-company demanded the balance amount of goods sold on credit and finally on 19-11-1996 sent a notice under section 434(1)( a ) for the payment. On 15-12-1996, the respondent-company had replied denying the claim of the petitioner-company. It is also an admitted fact that the petitioner-company had instituted summary Suit No. 980/97 against the respondent-company and its guarantor, Sanghi Polyesters Ltd. in the Civil Court of Ahmedabad for the recovery of the balance amount of the goods supplied on credit, for interest and damages, for breach of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 996, it had sold the 2nd and 3rd lots in the month of August, 1996, itself. Therefore, the respondent-company is entitled to claim damages. The questions in controversy can be gone into in O.S. No. 980 of 1997 pending on the file of the civil court of Ahmedabad and, therefore, the company petition is liable to be dismissed. 5. It is too well-settled that, where there is a bona fide dispute put forward by the company, it would be a valid excuse for non-payment and inability to pay will not be inferred. Where the company produces prima facie proof of facts on which the defence depends and there is likelihood to succeed in point of law, it cannot be said that the company has neglected to pay within the meaning of section 434(1)( a ). Bona fide dispute implies the existence of a substantial ground for the dispute raised. 6. The question is whether the respondent-company has succeeded in establishing that the claim for non-payment of the debt in question is bona fide disputed by it ? 7. It has been urged on behalf of the petitioner-company that, under the agreement 0094A, the respondent-company is liable to pay an amount of US $ 4,00,978.68 including interest, becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1989] 66 Comp. Cas. 634 (Punj. Har.) and K. Appa Rao v. Sarkar Chemicals (P.) Ltd. [1985] 84 Comp. Cas. 670 (AP). 9. As noted above, it is an admitted fact that, under the contract 0094A, newsprint weighing 750 mts. was purchased by the respondent-company on credit at the rate of US $ 530 per mt. The respondent-company has also furnished bank guarantee of Sanghi Polyesters Ltd. The respondent- company had received the goods between 16-8-1996 to 26-8-1996 and had consumed the whole newsprint. It is pertinent to note that, at no point of time, had the respondent-company specifically claimed damages on account of delayed delivery of goods. 10. The respondent-company relies on the letter, dated 31-8-1996. In this letter, it is mentioned that the newsprint supplied was giving a lot of problems. During running and printing quality was getting affected, that though the brightness was good, pluff was more, it was taking a lot of ink and breakages were more. The paper was very soft and after printing, while reading, it was getting folded causing lot of inconvenience to the readers. A request was made to depute a person from the factory to advise them as to how to make use of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrate the allegations made by it regarding the poor quality of the newsprint as alleged in the letters, dated 12-9-1996, 14-9-1996 and in the counter. 12. From what is stated above, I find that the respondent-company has accepted the consignment of 750 mts. of newsprint between 16-8-1996 to 26-8-1996 without protest regarding the delayed delivery, that it has purchased the said goods on credit, that though the respondent-company had complained about the poor quality of the newsprint in its letters, dated 6-9-1996, 12-9-1996, 14-9-1996 and 5-10-1996, it never claimed any amount of compensation for such defective supplies, but on the other hand had throughout requested the petitioner-company for time to make payment of the bills with interest and ultimately, had paid the aforementioned amount of US $ 1,30,520.69 against principal and bank charges and interest in part against the price of 750 mts. of newsprint purchased by it on credit, that the respondent-company never asked the petitioner-company for substitution of the alleged defective newsprint, but, on the other hand, has consumed the whole quantity of the newsprint, that it has not filed in the Court any printed matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evident that the petitioner-company did not agree for a reduction of rate, rate for supplies to be made in pursuance of the contracts 0094B and 0094C. Yet, the petitioner-company had mentioned the price for the next 750 mt. consignment at US $ 516 per mt. in its letters, dated 17-7-1996 and 27-7-1996, and the petitioner-company had again denied through the fax message, dated 30-7-1996 for the reduction in the price for the second lot as mentioned in the letter of the respondent-company, dated 27-7-1996. It is apposite to mention that the respondent- company in its letter, dated 2-8-1996 had very specifically mentioned that it would accept the terms for the next 750 mt. only at US $ 516 per mt. cif, Mumbai, 60 days from the date of bill of lading, free of interest and would not accept any other terms and would accept the documents only if they were prepared on the above lines and not anything else. From this, it can be safely inferred that the respondent-company was not at all prepared to accept the lot of next 750 mt. of newsprint at the originally agreed rate of US $ 530 per mt. and had insisted the petitioner-company to sell the newsprint at the reduced rate of US $ 516 per mt. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition against the respondent-company as also its guarantor, Sanghi Polyesters Ltd. probably because the guarantor is not a party in these proceedings as also to save limitation. It is also pertinent to note that , in the civil suit filed by the petitioner-company, damages for breach of the contract for next two supplies totalling to 1,250 mts. of newsprint have also been claimed, whereas in the present company petition, only liquidation of the respondent-company has been sought for the non-payment of, neglect and refusal to pay the unpaid price of the goods sold on credit. Thus, the case of State Trading Corpn. of India Ltd . ( supra ) is of no help to the respondent-company. It is not an invariable rule of law that, where a suit for the recovery of a debt on the same cause of action is pending in a civil court, petition for winding up does not lie. I am, therefore, unable to accept the contention of the learned counsel of the respondent-company that the proceedings for winding up need not be entertained merely because a civil suit is pending for the recovery of the debt. 16. In the case of K. Appa Rao ( supra ) a learned single Judge of this Court had found that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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