9911796707
TMI Blog2008 (7) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... orders from time to time on the petitioner for supply of flexible laminates and pouches, inter alia, for its FMCG product. 'Zing' and 'Chabaaza'. The petitioner supplied to the Company Flexible laminates and Pouches as per the terms of the purchase orders to the complete satisfaction of the company and raised the invoices amounting to Rs. 1,91,51,367.55. Out of the said amount, an amount of Rs. 57,42,572.41 is outstanding, due and payable by the company. It is further averred that the petitioner sent numerous reminders and made personal visits to the office of the company but to no avail. The Company vide a 'Balance Confirmation Certificate' dated 23-1-2006 (Annexure P-1 to the petition), admitted Rs. 56,97,300 as outstanding due and payable to the petitioner as on 31-12-2005. The petitioner further states that a Statutory notice dated 15-2-2006 issued in compliance of section 433/434 of the Act was served on the company and was duly received at the registered office of the company on 17-2-2006, but the company has neither replied to the said notice nor settled the aforesaid outstanding amount, due and payable to the petitioner. 3. In the reply filed by the respondent, it is averr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,58,413 (Annexure A-4 to the reply), which according to the respondent, had not been replied to by the petitioner. It is also averred that a Civil Suit No. 159/2006 filed by the respondent against the petitioner is also pending in the Court of Addl. District Judge, New Delhi, for recovery of the said amount. 6. With regard to demand raised by the petitioner, it is submitted that the company is not indebted to the petitioner and the petitioner is raising frivolous and false allegations and misleading the Court. It is further contended that the claim of the petitioner is belied by the fact that payment of Rs. 70,47,432 was already made to the petitioner, after 17-12-2004 whereas the claim of the petitioner to the tune of Rs. 57,42,572 is as on 17-12-2004, thus, after the said payment, there ought not be any outstanding even if the claim of the petitioner is accepted. 7. In relation to the 'Balance Confirmation Certificate' dated 23-1-2006 stated to have been issued by the company, it is argued that the said letter was never issued by the company and the same is a forged document. It is claimed that firstly, there is no person by the name of 'Sidharth Nanda', the purported signato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accounts'. In response to the stand of the company that it had shifted its registered office even before the so-called issuance of the balance confirmation certificate, the petitioner submits that mere shifting of the registered office does not necessarily mean that the company cannot use its old letterheads. In any event, the petitioner is not responsible for the respondent using a letterhead showing the earlier address of the company. The petitioner has also placed on record various communications exchanged with the company which, the petitioner states, completely belie the denial of liability by the respondent-company. 9. It is submitted that in these communications there is repeated acknow-ledgement of liability, apart from assurances and promises to pay the same by the respondent-company. The petitioner has also placed on record the copy of the TDS certificate issued by the respondent-company which, the petitioner submits, clearly show that insofar as the payments for which tax has been deducted at source, are concerned, the respondent acknow-ledges that payments were due and payable which is why tax has been deducted at source. Even those amounts had not been paid. Copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the poor quality of the product supplied by the petitioner. On 11-4-2005 the respondent issued a communication to the petitioner with regard to clearance of dues stating that 'As per our records, balance outstanding to you as on 31-3-2005 is Rs. 80.97 lakhs. We would appreciate your confirming this figure in the next 15 days. The respondent also suggested clearing the dues over a period of six months, i.e., between April and September, 2005 and gave a monthwise schedule for making payments. The respondent suggested that it would pay, in the months of April-August, 2005 Rs. 13.5 lakhs each month and would pay in the month of September, 2005 Rs. 13.47 lakhs making a total of 80.97 lakhs. The respondent further stated : "Meanwhile, to help us maintain operation on a continuous basis, we would confirm that all purchases made from you from April onwards shall be as per the terms and conditions herein force. We trust you will be in a position to extend your cooperation as usual and provide the materials in time to allow us to get over the current situation at the earliest." 14. Admittedly, the materials were mainly supplied between the period September, 2004 to December, 2004. The ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elies the respondents stand that the materials supplied by the petitioner were defective or of inferior quality. 16. On 4-8-2005 the respondent issued another communication through Mr. Amar Sinha its Director. He, inter alia, stated : As you would know DCC has gone through a difficult phase in business in the recent past and having incurred huge losses we were almost on the verge of deciding whether to continue this business for the future. There has been no business transaction in DCC during the last 3 months, which we are sure that you are aware of. You will appreciate that if we do not revive the business of DCC, it may become very difficult for us to clear all market dues in the short term, and for this purpose we require your co-operation and support to bring the situation under control. 17. The respondent further offered that to settle its outstandings owed to its creditors it would make payment of amounts which are 25 per cent more than the value of the purchase which could be adjusted against the overdue outstanding payable to the supplier. He further stated that in case there are supplier who do not want to continue business with the respondent, the respondent would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and for the first time this stand come to be taken on 8-9-2006, when a legal notice was sent by the respondent-company to the petitioner, well after the notice for winding up dated 15-2-2006 had been issued and served on the company, and the present petition filed in March 2006. It was only after legal advice had poured in, that the respondent-company took the said stand in its notice dated 8-9-2006 and soon thereafter in its reply to this petition. This demonstrates how hollow the stand of the respondent-company is with regard to the quality of the packaging material admittedly supplied by the petitioner. The respondent claims to have issued a debit note for Rs. 68,00,985 dated 31-1-2006. However, nothing has been placed on record to show how and when this debit note was sent to and received by the petitioner. The petitioner has denied the receipt of the said debit note. The respondent has also placed on record certain documents as Annexure-3A to show that from time to time its products were returned on account of their poor quality. A perusal of these documents shows that out of 12 delivery challans filed on record, 10 merely show the transportation/return of some goods. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed any such document at the time of his cross-examination. Pertinently, even in these proceedings no report of any technical person, independent or otherwise, has been placed on record by the respondent. He also states that there is no order for packaging material placed by the company to which he is not a party, meaning thereby, that he is aware of each and every purchase order placed by the company for procurement of packaging material. He further states that there was no order for packaging material from any vendor from 31-12-2004 till 17-5-2005. This statement belies the claim of the respondent-company that it had stopped procurement of packaging material from the petitioner on account of its inferior quality or defective nature. Had that been the case, the respondent-company would have procured the packaging materials from other suppliers. However, it appears that the respondent was, in fact, not in need of packaging material after December, 2004 and such need arose only in May, 2005. He also stated that in the purchase orders, the quality parameters of the packaging material were not specified and that they were defined in a pro-note, a copy of which is supplied to the vendor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reover, the bald assertion made in all these communications that "packaging of the aforesaid return 'Chabaaza' was neither air proof nor moisture proof....." is neither here nor there. It is not disclosed as to on what basis the authors of the said identical letters concluded that the packaging was neither air proof nor moisture proof. For all the aforesaid reasons and on the basis of the materials brought on record, I reject the submission of the respondent that the quality of the packaging materials supplied by the petitioner can be said to be defective or of inferior quality. I am satisfied that this defence has been raised by the respondent merely as an afterthought and with a view toward of their liability owned to the petitioner as well as to defeat these proceedings. I also draw support from the following decisions relied upon by the petitioner, wherein it is held that such like highly belated disputes about the quality of goods supplied and received by the respondent would not give rise to a bona fide dispute. 1.Tarai Food Ltd. v. Wimpy International (P.) Ltd. 2005 VIII AD (Delhi) 131. 2.Shivalik Rasayan Ltd. v. Pesto Chem. [2005] 124 DLT 431. 3.Durgapur Project (P.) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional affidavit of the petitioner on 9-8-2007. The same is sworn by Sh. K.S. Anand. He states that Sh. Sidharth Nanda was never an employee of the respondent-company. He was an employee of GTC Industries Ltd. and was based at Mumbai. That is a separate and independent entity. Copy of his appointment letter dated 26-8-2005 and Form No. 16AA issued by the GTC Industries Ltd., Mumbai to Sh. Sidharth Nanda, claimed to have been obtained from him have been annexed to this affidavit. 26. Pertinently, there is no denial of the fact that Sh. Sidharth Nanda was acting as the authorised representative of the company and that he had, in fact, signed the Sales Tax forms in that capacity. The fact that Sh. Sidharth Nanda was acting for and on behalf of the company while he was shown to be an employee of GTC Industries Limited, shows the nexus between the respondent-company and M/s. GTC Industries Limited. In case Sh. Sidharth Nanda had absolutely nothing to do with the respondent-company, it is difficult to understand how the respondent-company has been able to persuade Mr. Sidharth Nanda to part with his appointment letter issued by GTC Industries Limited as well as Form No. 16AA, issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s authenticity merely because the respondent, while issuing the same, may have used the some old stationery that may be lying with it. Had the petitioner designed to forge and fabricate the said balance confirmation certificate, it would have done so by fabricating the identical letterhead on which the respondent had been sending its communications off late, and would not have used an 'imaginary letterhead', which the respondent had never even used. In fact, it appears, that while issuing the balance confirmation certificate dated 23-1-2006, the respondent may have deliberately resorted to using some old stationery and issued it in the name of Sh. Sidharth Nanda with some other officer signing for and on his behalf, so that such like defences could be raised when the same is relied upon by the petitioner in judicial proceedings. 28. The issue with regard to the authenticity of the said balance confirmation certificate has also to be viewed in the light of the other surrounding circumstances of the case. The respondent has not denied the factum of issuance of the communication dated 11-4-2005 by it wherein, even according to the respondent a sum of Rs. 80.97 lakhs was outstanding a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market between March 2006 and May 2006. The only exception shown in the tabulation is at Sl. No. 19, according to which the raw materials were received by the respondent on 20-12-2004 and the finished products were returned by the market in September, 2005. The value of the goods returned in respect of the laminates supplied with effect from 3-12-2004, which were returned between March, 2006 and May, 2006, as extracted from the said tabulation, is as follows :- Sl No. IGP No. Date of Receipt of Material Received Qty. (in kgs.) Quantity of Return In Cases Value of Return Month of Return 14 520 3-12-2004 3110.00 441 912870 Apr-06 15 521 3-12-2004 66.30 - - - 16 523 3-12-2004 4182.08 300 621000 Apr-06 20 567 20-12-2004 853.60 100 207000 Apr-06 17 524 3-12-2004 1447.95 442 914940 Apr-06 18 529 6-12-2004 553.35 188 389160 Mar-06 21 571 21-12-2004 1153.60 200 414000 May-06 22 8 20-5-2005 1756.78 - - - Total 13123.66 1671 3458970 30. From the aforesaid extract it would be seen that even though the goods allegedly returned after March, 2006, are alleged to be of a value of Rs. 34,58,970, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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